Car insurance policies for new drivers do not exist, as each state has its minimum requirements for auto insurance. Car insurance policies for new drivers are the same as any other driver’s policy. However, the insurance cost of car insurance for new drivers is influenced by their lack of driving experience. It is important to note that the amount of insurance needed does not change based on driving experience.
Does a New Driver Need Insurance?
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Car Insurance for New Drivers Cost
As a new driver, various factors can affect the specific car insurance rate you will pay. Some of these factors include your location, the type of vehicle you own, your driving record, and your credit history. Age and driving experience are two significant factors that insurers consider as they are key indicators of how likely a driver is to get into an accident.
How Much Is Insurance for a New Driver?
The annual estimated cost of full coverage car insurance for new drivers is approximately $6,050, or approximately $504 monthly. Teenage and younger new drivers often face higher rates, which are represented in the table below:
Insurance Rates for New Drivers
| Age | Monthly Car Insurance Average | Annual Car Insurance Average |
|---|---|---|
| 16 | $632 | $7,581 |
| 17 | $468 | $5,612 |
| 18 | $413 | $4,958 |
| 19 | $309 | $3,708 |
| 21 | $232 | $2,786 |
| 25 | $195 | $2,336 |
| 30 | $153 | $1,831 |
- The average rates listed above are for teenage and young drivers, representing some of the most common groups of new and inexperienced drivers.
- Information from 2022 was used to obtain rates for individuals aged 17, 18, 19, 21, and 30.
Car Insurance Prices for First-time Drivers
Below is an average full coverage insurance cost for 25-year-olds with a good credit score and driving record from the most well-known providers.
| Car Insurance Company | Monthly Car insurance Cost for 25-Year-Old | Average Annual Insurance Cost for 25-Year-Old |
|---|---|---|
| Nationwide | $139 | $1,663 |
| Travelers | $141 | $1,694 |
| Erie Insurance | $150 | $1,796 |
| Geico | $151 | $1,807 |
| USAA | $152 | $1,825 |
| State Farm | $163 | $1,952 |
| American Family | $169 | $2,023 |
| Auto-Owners Insurance | $173 | $2,076 |
| Progressive | $187 | $2,243 |
| Allstate | $247 | $2,958 |
The Cheapest Car Insurance for New Drivers
Based on the data provided in the table above, Nationwide and Travelers offer the most affordable rates for new drivers on average. Our analysis indicates that a 25-year-old driver who meets the requirements for coverage through Nationwide can expect to pay an average of $1,633 per year or $139 per month for a full-coverage auto insurance policy.
Why Is the Car Insurance So Expensive for New Drivers?
Car insurance for new drivers can be pretty expensive, with costs ranging up to $3,000 per year, depending on the insurance company. Insurance companies consider new drivers high-risk customers because they lack a driving record. Younger drivers are likelier to be involved in accidents, contributing to higher car insurance rates.
One of the primary reasons why insurance companies increase rates for younger drivers is their greater likelihood of being in an accident due to lack of experience. According to the Centers for Disease Control and Prevention, car crashes are the second-leading cause of teenage deaths in the United States. Additionally, data from the Insurance Institute for Highway Safety reveals that in 2020, approximately two-thirds of teenagers killed in car crashes were male.
Insurance for New Drivers Quotes
If you’re a new driver and want the lowest rates possible, contacting multiple car insurance providers and asking for quotes is best. Insurance companies consider several factors when determining coverage rates. Some of these factors are related to the policy, while others depend on your age, gender, driving record, and other demographic information.
The following are key elements that affect car insurance quotes:
- Age
- Gender
- Marital status
- Your Location (including zip code)
- Vehicle make, vehicle model, and vehicle mileage
- Your credit score
- Driving records
- Coverage limits
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How To Save on Car Insurance for New Drivers
There’s no one surefire way to find the best price for auto insurance, but there are a few things you can do to get a lower car insurance premium. We recommend using the following strategies if you purchase car insurance for new drivers.
If you’re looking for car insurance for new drivers, there are a few simple strategies you can use to get a lower premium, such as:
– Increase your excess: Increasing the amount you are willing to pay out upfront for a claim before the insurance company covers the rest of the costs can help to reduce your insurance premium.
– Shop around: It pays to research different providers so you can find the best deals and compare prices.
– Choose a low-risk car: Opt for a vehicle with a lower insurance group rating, which can also help lower the cost.
– Pay your premium upfront: Insurers may offer discounts for customers who pay their premiums upfront in full rather than in monthly installments.
– Utilize discounts: Many insurers offer discounts for drivers who have taken additional safety precautions, such as fitting a tracker device or taking an approved driving course.
1. Compare Car Insurance Companies for New Drivers
Choosing the right car insurance policy can be overwhelming for a new driver. Insurance companies have varying rates, and it’s essential to compare them to find the best deal.
You can start by obtaining car insurance quotes from different providers to know what you can expect to pay. Comparing quotes can also help you save money by switching providers. Additionally, reading reviews that compare companies like Allstate vs. Progressive or State Farm vs. Geico can help you make an informed decision based on their discount offerings and customer feedback.
2. Improve Your Credit Score
Another way new drivers can save money on car insurance is by improving their credit scores. A bad credit score can increase your insurance rates, so it’s wise to build good credit before you start driving. Although improving your credit may seem daunting, you can take several simple steps to raise your score and get lower insurance rates.
3. Looking for a New Driver Car Insurance Discounts
A few options are available if you’re a young driver or a student looking to save on car insurance. Besides discounts offered by some insurance companies, you may also be able to reduce your premium by bundling policies. For instance, if your insurer provides a multi-policy discount, you could consider combining your homeowners insurance with your auto coverage. To help you save even more, here are some common discounts offered by insurance providers:
4. Adjust Car Insurance coverage
If you’re trying to save money and have a new driver in your household, you might be able to get a better rate on your auto insurance policy by making some adjustments. One option is to increase your deductible, which typically leads to lower premiums. However, remember that this also means you must pay more out of pocket if you file an insurance claim.
Another option is to drop coverage that you don’t need. For example, if you own an older car outright, you may be able to stop paying for collision and comprehensive coverage. You will still need liability insurance in most states, even if you decide to drop the rest of your full coverage policy.
5. Try Usage-Based Insurance
Usage-based car insurance, or telematics insurance, is a type of coverage that tracks driving behavior and mileage to determine insurance rates. By taking into account actual time spent on the road and good driving habits, usage-based insurance policies are usually less expensive than traditional auto insurance, as the National Association of Insurance Commissioners reported.
However, usage-based policies may not be available in every state and may not be the best option for people who drive frequently or have a long commute. Additionally, individuals with poor driving habits may see increased insurance rates.
The Tips for First-time Car Insurance Buyers
Teenagers are often the first group that comes to mind when it comes to new drivers. However, several other types of people are getting their licenses for the first time. Some examples of new drivers include teens, adults who did not previously have a driver’s license, and those who have immigrated to the U.S. Since car insurance costs vary from person to person, there are specific tips for new drivers in each group. The following sections will explore the details of obtaining car insurance for each group.
How To Get Cheapest Car Insurance for Young Drivers
Starting to drive alone for the first time can be an exciting experience for a teenager. However, the cost of car insurance for new drivers is usually high because their age is one of the primary factors insurance companies consider when determining premiums.
One of the best ways for young drivers to obtain cheap car insurance is by staying on their parent’s policies. Insurance companies generally offer various discounts to families to help them save money on insurance coverage, including:
- Driving safely can earn you a discount
- A good student discount is available to those with a B average or higher
- College students and students away at school can also receive discounts
- People who took defensive driving courses also get discounts
Young drivers can’t get their insurance policies unless they own their cars and live in a different permanent address than their parents. It is important to note that drivers under 25 usually pay much higher premiums. If you add a young driver to your existing family insurance policy, your premiums will increase significantly. However, the increase will depend on your insurance company, vehicle, and location.
How To Get Car Insurance for New Driver Over 25
Driving for the first time is not limited to teenagers only. Regardless of age, anyone who has lived in a big city and primarily relied on public transportation or has not had the means to purchase a car may also be considered a new driver. Fortunately, people over 25 may experience lower rates than teenage drivers despite having little or no experience on the road. Suppose you are an older first-time driver living in an area with public transportation or do not plan to drive frequently. In that case, you have alternatives to traditional insurance, such as usage-based insurance (which we previously discussed above).
The Car Insurance for New Immigrants
Immigrants and foreign nationals who come to the US may be classified as new drivers, as auto insurance companies usually only check domestic driving records. This means that even if you have a clean driving record in your home country, you may still be considered an inexperienced driver in the US.
Getting car insurance can be more challenging for immigrants as many insurance companies require a valid driver’s license. However, depending on the state you live in, you may still be able to get a license even if you don’t have the necessary government paperwork.
According to the National Conference of State Legislatures, the District of Columbia and 16 states allow undocumented immigrants to obtain a driver’s license if they can provide items such as a foreign birth certificate, valid foreign passport, or proof of residency in the state.
| California | Colorado | Connecticut | Delaware |
|---|---|---|---|
| Hawaii | Illinois | Maryland | Nevada |
| New Jersey | New Mexico | New York | Oregon |
| Utah | Vermont | Virginia | Washington |
Car Insurance for New Drivers: The Bottom Line
New drivers typically pay more for car insurance than experienced drivers. However, comparing insurance companies and searching for discounts can reduce costs.
Best Car Insurance for New Drivers
Whether you’re a new or experienced driver, it’s always a good idea to research and compare quotes from multiple insurance providers to find the best rate. After extensive research, our insurance experts have concluded that Geico and State Farm are among the top options for car insurance for new drivers. Keep reading to learn more about these two providers and how they can help you protect your vehicle.
Geico: Best for Budget
State Farm: Best Customer Experience
Let’s say your child who is a beginner driver maintains a B average in school or is in college and uses their car sparingly. In that case, State Farm offers a variety of discounts that can help you reduce your insurance premiums. State Farm is an excellent student option, with programs like Steer Clear® available for drivers under 25. Additionally, its network of more than 19,000 local agents can assist if you are uncertain how much coverage to purchase for a new driver.
