Cheapest car insurance for teens

Finding cheap car insurance for teen drivers isn’t easy. Insurers charge higher rates for teens than any other age group, and I bet you know why. Teens are risky behind the wheel. They’re inexperienced drivers and, thus, are more apt to get into accidents.

Teens pose a serious risk for auto insurance companies. That means they're never the cheapest to insure. The national average car insurance rate for teens 16 to 19-years-old is $5,668 for full coverage. However, there are ways to lessen the blow by choosing the cheapest car insurance company for teens, such as Geico and State Farm.

It’s good to keep in mind that the cheapest insurance isn’t always the best. Basic car insurance does not offer the same level of protection as full coverage would. It all may come down to whether your teen drives an old car — or a brand new model. We’ll dive into the best and cheapest car insurance for teens separately, so you can decide on how much insurance your teen should get.

How much is car insurance for teens?

Teenagers are the most expensive to insure of all the age demographics. A 16-year-old male is the highest. Auto insurance companies figure that the lack of experience will lead to claims.

"Motor vehicle crashes are the leading cause of death among teens," said Loretta Worters, vice president of media relations of the Insurance Information Institute.

"Immaturity and lack of driving experience are the two main factors leading to the high crash rate among young people ages 15-19. Teens' lack of experience affects their recognition of and response to hazardous situations and results in dangerous practices such as speeding and tailgating."

Average car insurance rates for teens are at their highest for 16-year-olds and dip with each year until the young driver is well into his or her mid-20s.

According to teen driver data compiled by Insurance.com, the average cost for car insurance for those very young drivers, by year:

• 16-year-old - $3,989
• 17-year-old - $3,522
• 18-year-old - $3,148
• 19-year-old - $2,178
• 20-year-old - $1,945

It usually makes more sense for Junior to go on the family car insurance policy. But there are instances when it makes sense for your teen to have a separate policy. These include:

• If someone in the family owns a luxury sports car, which automatically throws all the drivers in the house on that expensive insurance.
• Your teen is financially independent.
• If they’re accident-prone or have multiple tickets. That way your teen’s driving record and claims do not affect your premiums as well.

As we noted, in most cases, it's better to put your new-driving teen on your auto insurance. It's significantly cheaper for teens, but it's still going to hit the premium charge hard, and right off the bat.

Using a 2014 Honda Accord as the "family car" with the primary driver a 40-year-old man looking for full coverage, we compared the rates in 10 zip codes in each state. Then, we added a 16-year-old to the policy.

When that teen was added to a policy, the average household's car insurance bill escalated 152%. It was even higher when adding a boy.

You don’t have to accept high rates. We compared prices for multiple companies in California. We found the average increase when adding a teenage girl to a policy was $2,712 and a boy was $4,172, making the overall average $3,442 increase in your auto insurance cost per year.

The table shows how much your annual rates will increase when you add a 16-year-old teen in California so you can see how shopping can save you hundreds or even thousands.

Best car insurance companies for teens

Just like no two teens are alike, car insurance companies don’t treat them the same way. We did an independent analysis on the top carriers around and narrowed the list of best car insurance for teen drivers down to five based on customer ratings, Insurance.com rate analysis, financial strength and more.

• Best for new drivers: Progressive
• Best for college students: Auto-Owners
• Best for student discounts: Allstate
• Best for good drivers: State Farm
• Best for military members and families: USAA

Progressive: Best for new drivers

The most expensive drivers are the ones with a fresh driver’s license. Progressive may be the best option due to the value the carrier offers, providing cheap car insurance for young drivers. Parents or teens will find low rates, discounts for young adults and the most flexibility. According to Progressive, once you add a teen to your policy, they can drive any of the covered vehicles. They can also take part in roadside assistance and rental car reimbursement.

Pros

• Low teen driver rates
• Teens can qualify for Disappearing Deductible to save money every year without an accident
• The Progressive mobile app notifies you if your teen is driving distracted
• The Snapshot Program awards discounts based on the teen’s driving

Cons

• Customer satisfaction ratings from J.D. Power could be better
• Above-average complaints (index of 1.76) from the NAIC

Coverage options

• Custom parts and equipment value
• Loan/lease payoff
• Rideshare insurance
• Roadside assistance
• Deductible savings bank

Auto-Owners: Best for college students

Auto-Owners Insurance is ideal for college students focused on their studies. Having a “B” grade or better can reduce auto insurance premiums by up to 20%. Considering that the average teen policy is over $5,000, that’s $1,000 off just for doing well in college. College students who attend school out of town at least 100 miles away — and only use the car when they come home to visit — can also save money through the Student Away at School Discount.

Pros

• Generous discounts for college students
• Enrolling in the Teen Driver Monitoring Program and installing a GPS on the teen’s vehicle helps Auto-Owners track the teen’s habits to reward safe drivers with discounts.
• The Personal Automobile Plus Package bundles 10 coverages including cell phone replacement and locksmith services into one policy.

Cons

• Not available nationwide
• Not as many coverage options available as other insurers

Coverage options

• Diminished value
• Additional expense
• Loan/lease payoff
• Roadside assistance

Allstate: Best for student discounts

When getting the most value for the least amount of money is crucial, take a look at what Allstate has to offer. The company is one of the largest and most reputable insurers in the country. In addition, its discounts aren’t limited to college students. Younger students still in high school could also save. The Good Student Discount conditions are more flexible. While most carriers request you prove you have a B average or greater, you could qualify for a Good Student Discount by being in school full time, completing the teenSMART driver’s ed program or leaving your vehicle behind with parents while you attend school.

Pros

• Coverage available nationwide
• One of the most full-featured mobile apps of all carriers
• Enrolling in Drivewise and downloading the app opens up a new world of reports, driving insights to serve as training and challenges that help you earn more discounts.

Cons

• Higher than average insurance rates
• Lower than average performance in the J.D. Power customer satisfaction study

Coverage options

• Classic car insurance
• Custom parts and equipment
• Rideshare insurance
• Roadside assistance

State Farm: Best for good drivers

Responsible young drivers could find that State Farm is the best option for those who are lower-risk. State Farm has the most discounts for safe teen drivers. Steer Clear and Drive Safe & Save are two programs that could help a teen driver lower their car insurance premiums. Best of all, teens can learn as they drive by following the app’s safety suggestions.

Pros

• Largest carrier in the country
• In-person State Farm offices nationwide, featuring dedicated agents
• Plenty of virtual driver training is available
• Among the cheapest car insurance companies for teens

Cons

• Although it’s the largest insurer in the country, State Farm still lacks some modern improvements, such as live chat.
• Limited optional coverages

Coverage options

• Rideshare insurance
• Roadside assistance

USAA: Best for military family members

USAA may have the best cheap car insurance for young drivers and adults alike. It frequently tops J.D. Power’s customer satisfaction studies. In addition, the carrier provides great service for an affordable price. The trouble with USAA is that the carrier only offers coverage to military members. To get insurance for yourself and/or your teen, you’ll need to confirm that you’re honorably discharged, retired, a veteran or currently serving — or related to someone that is.

Pros

• Get up to 30% off when you enroll for USAA’s driver-tracking program called SafePilot
• Prompt (and award-winning) customer service
• Auto coverage extends overseas
• 10% discount for teens that choose to get their own coverage if parents are with USAA

Cons

• Limited optional coverages
• Military affiliation is required

Coverage options

• Roadside assistance
• Personal injury protection (PIP)

Cheapest car insurance for teen drivers by state

It’s hard to generalize when it comes to car insurance. Many factors can affect premiums. Age, vehicle type, level of coverage and location can all play a big role. You’ll find that car insurance varies dramatically by age and state. The number of accidents, uninsured drivers and state insurance requirements all affect what you’ll pay for coverage. Take a look at the difference.

Cheapest car insurance for 16-year-olds by state

The youngest group of drivers will pay more at 16 than they ever will the rest of their life. The average policy for a 16-year-old is nearly a whopping $7,000 per year for full auto insurance — $5,000 higher than a 30-year-old. Teens in certain states will get a break. Compare how rates are different.

Cheapest car insurance for 17-year-olds by state

Although 17-year-olds have a whole year of driving under their belt, premiums aren’t considerably lower yet. Average rates are $5,925 per year. When you break it down, that’s almost $500 per month for just one driver. See which states beat the average:

Cheapest car insurance for 18-year-olds by state

Now considered legal adults in most states, an 18-year-old driver may have two years of driving experience. However, an annual policy still costs over $5,000. In some states, it’s even higher depending on minimum insurance requirements and whether it’s a tort or no-fault state.

Cheapest car insurance for 19-year-olds by state

What a difference one year makes. Average premiums for full car insurance are $3,560 for a 19-year-old driver. Car insurance is half the cost of what it was at 16 — and will continue to drop as long as the teen continues to drive safely.

Auto insurance for teens by gender

As you can see, one state’s average can vary from the other. Another big factor is sex. Teen girls are known to drive more safely and responsibly than boys and will typically pay less. Take California’s rate to see the difference:

Finding ways to reduce the cost of car insurance can provide you and your teen with some financial relief.

Cheapest car insurance for male teenage drivers

Insurance.com found that the following carriers had the lowest rates for teenage boys. Get quotes to compare before you settle.

Cheapest car insurance for female teenage drivers

Teen girls can save on car insurance, especially with the five cheapest car insurance companies.

How to get the cheapest car insurance for teens

You know it's going to be costly, whether your teen gets his or her own policy, or is added to yours. But there are several ways to cushion the blow and find cheap car insurance for teens.

Just about every auto insurance company offers what is called a "good student discount." The discount is for teens going to high school (or college) who maintain a "B" (3.0) average or better. The average savings for that discount is $361.

Homeschooled students can get the discount, too, achieving high scores on standardized tests. Most insurance companies will also offer a discount for students who are living away from home.

Geared specifically to the teen driver, and another way to grab a discount on your insurance, choose a company that offers a "safe driver" program. Teens in this program sign a "contract" in which he or she has to fulfill certain responsibilities, such as not having passengers or driving too late, to rack up discounts and points. Some insurance companies offer driver training courses and telematics devices.

Considered among the "teen-friendly" auto insurance companies, Allstate has a Drivewise app that can be used by policyholders to earn up to 25% cashback for safe driving. The app tracks behaviors related to speeding, fast braking and others related to safety.

Another option is a defensive driver discount. Teens can take this extra driver education or defensive driving course, which goes above and beyond the minimum state-mandated drivers' education and training. In some states, discounts can run from 10% to 15% for taking these state-approved improvement classes.

Ways to get the cheapest car insurance

You'll likely get the cheapest auto insurance policy if you spend the time to look for it. Compare, contrast, ask and be diligent.

Several companies vie for the family market and make rates better and create more incentives, specifically, for teenagers. With its Smart Student Discount, accident forgiveness and several other teen-based features, Allstate has become a favorite for families with young drivers in getting cheaper auto insurance.

USAA, State Farm, Farmers, American Family and Nationwide all have similar teen-based incentives for savings, too. Geico is known for its competitive rates, regardless of the ages of the drivers.

After you decide on a carrier and a policy, experts recommend you give your teen the beater car. It's not appealing or flashy to your kid driver, but being assigned to the least valuable car in the household will garner the most savings on the policy.

A mid-sized sedan tends to be the best choice for teens. Small cars don't offer as much protection in crashes, and sports cars make them want to drive too fast. Also, SUVs and pickup trucks are harder to maneuver and can roll over more easily. Your auto insurance provider factors this into the "risks," and it translates into defining your rate.

If you do end up giving your teen an old car that isn't worth much, experts say you could consider ditching the collision and comprehensive coverage to reduce the premium cost. The reason? You likely would dish out more for the premium than you'd get back from the auto insurance company should you total the car (or if it is stolen).

Another common way to lower your car insurance premium is to raise your deductible, said Worters. Keep in mind, if your teen does get into an at-fault accident, you'll be liable for that deductible.

"Also if you do raise the deductible, you might consider upping your liability limits (which are woefully inadequate anyway)," said Worters, "but with a teen driver, it's a financially prudent move."

Before your teen even gets behind the wheel, it's important to address, repeatedly, this life-changing responsibility. According to AAA, there are three things to consider when your teen is preparing to hit the road:

• Finances: Can you and your teen afford the cost of auto insurance, gas and maintenance? Who will pay for the car? Have you found a safe car that fits your family budget?
• Readiness: Has your teen demonstrated safe, responsible driving behavior and driven alone for at least six months without a crash or ticket? Before handing over the keys, make sure you are using a parent-teen driving agreement and are satisfied that your teen has been driving successfully without you.
• Involvement: Is your teen ready to own, operate and maintain a car? Involving your teen in the purchase process can be a great learning experience regarding the costs and responsibilities of car ownership.

This information and other helpful resources for parents are available on the AAA Keys2Drive site.

Remember to shop around

You can ask for discounts and put your teen on your policy, but in the end, the best way to get the cheapest car insurance for teens means taking the time to comparison shop with at least three car insurance companies. Rates can vary drastically from one company to the next, so by shopping around you can potentially save hundreds of dollars if not more.

And to help future rates, teens need to keep a clean driving and claims record so that they qualify for a good driver discount and are found to be less of a risk -- both of which will make the premiums go down instead of up.

Teens: do not drink and drive, put that cell phone down, and slow down! And to parents: good luck in your hunt for the cheapest car insurance for your teen.

Frequently asked questions about car insurance for teen drivers