Searching for the best car insurance for new drivers under 25? You’ve come to the right place.
I should know because I had four teenage drivers myself, all at the same time.
At that time I was an independent insurance agent with access to all the best car insurance companies.
As an agent, I could compare car insurance rates for underage drivers any time I wanted.
Before getting into the details of how rates work and how you can lower them, let’s look first at why rates are so high for young drivers.
Why Are Car Insurance Rates So Expensive For Drivers Under 25?
I’m glad you asked. The obvious reason is the lack of driving experience, which leads to:
- Poor decisions while driving.
- Unusually high rates of cell phone use while driving.
- Teenage passengers not realizing the consequences of distracting the inexperienced driver.
- Listening to loud music either through the radio or through some type of earbuds.
- Not understanding the effects of “buzzed” driving.
These factors cause wrecks. It’s a proven fact. To compensate, auto insurance companies charge higher rates for both male and female drivers under 25 years old.
Best Car Insurance for New Drivers Under 25
Here are the top 9 providers of the best car insurance for new drivers under 25:
State Farm claims to be your good neighbor. They have brick-and-mortar offices and local agents just about everywhere.
Their rates are not always the cheapest, but they are conveniently located in most cities.
In case you haven’t noticed, the Geico spokesman is a little green lizard, and you can’t lie, we all love him.
They mostly sell their insurance online but have opened some retail offices around the country in the last several years.
GEICO seems to have cheap auto insurance for underage drivers in California.
Progressive primarily started for car insurance, they have added other coverages for Motorcycle insurance and RV insurance as well as some other coverages. They have a reputation for paying claims fast.
Their rates seem to be pretty cheap in Wyoming and Montana for teenage drivers.
If you’re a college football fan you’ve seen Allstate’s “good hands” behind the goal posts.
Allstate doesn’t appear to offer the lowest rates for Drivers under 25 in most states, but they are a solid reputable insurance company that you can trust.
While USAA has good customer service, its policyholders are limited to people with some type of military relation.
Their rates seem to be generally competitive if you meet their qualifications for membership.
Liberty Mutual primarily sells coverage through local independent agents. Liberty Mutual is a large insurance company that also sells a lot of commercial insurance policies both in America and around the world.
Their rates are hit and miss depending on where you live.
Farmers has great commercials trying to get across their excellent claims service.
They started out writing insurance for farmers, but now offers a wide variety of insurance policies.
Nationwide is another large insurance company that does a lot of advertising.
They seem to be fairly good with drivers who have had claims on their record.
Travelers wrote the very first car insurance policy before 1900. Travelers is also known for its quick claim service. Travelers is a very innovative company and usually have cheap auto rates for good drivers, even those 19 and under.
The auto insurance industry spends billions of dollars on marketing and advertising, so you’re probably very familiar with some of the following national insurance companies listed in order of their written premiums.
While these are very well known companies, it is also a good idea to look into your regional options for auto insurance as well.
Regional Auto Insurance Companies Can Help You Save
While those are some of the most familiar companies, a lot of regional companies could have more competitive rates for your situation.
Regional companies don’t have to build in charges for their national branding, and they can pass these savings on to you.
Some of These Regional Companies Include:
- Erie Insurance
- Cincinnati Insurance
- Some of the local Farm Bureau companies
- Central Insurance
- Country Insurance
What Affects The Cost of Car Insurance For Young Drivers?
There are numerous car insurance companies that offer great policies. But, there is no one company that is best for everyone.
That being said, learning how the car insurance company will look at you as a new policy owner will ultimately help you find the best insurance company and rates for your young driver.
Variables Affecting Car Insurance Premiums:
- State Regulations: Insurance is regulated at the state level – not the federal level – so every state has different rating rules and minimum levels of coverage which affect premiums.
- Local Zones: Insurance within each state is usually rated geographically, so your rate also depends on the ZIP code in which your auto is garaged.
- Different Perspectives: Different insurance companies have different “actuaries” (who determine the rates for their company). Different actuaries have a tendency to look at “risks” (like teenage drivers) in a different way.
- Random Market Fluctuations: At any point in time, in the same state and ZIP code, an insurance company could lower its rates for certain rate classes, such as 15-19 year old male drivers, for example. A month later, a different insurance company might raise its rates for those same 15-19 year old male drivers.
- State Availability: Not all car insurance companies sell insurance in all 50 states.
With all these variables, the only way to find the cheapest insurance company for your situation is to shop around for comparison quotes and get prices from different companies for the same coverage.
How to Get Insurance Rates For New Drivers Under 25
Buying car insurance online, or even at a retail independent insurance agent’s office, is not exactly fun or easy.
Because rates are based on all the drivers and all the vehicles in the family, you really need to have your information readily available in order to get quotes.
To get the most accurate picture of rates, make sure you’re comparing the same coverage with each different company.
If you end up being offered different liability limits between two different companies, you’ll have a much harder time comparing rates because you are trying to compare apples and oranges.
Information You Will Need to Get Accurate Quotes
Here is the information you will need to get accurate rates either online or in an insurance agency:
- Full names of all drivers.
- Make, model and year of all vehicles (and the style or body trim package) unless you also have the VIN which is handy.
- Liability limits and physical damage deductibles and other coverages of your current policy if you have one.
- Social Security numbers — but don’t share until you’re ready to get a final and complete quote.
- Drivers license numbers of all drivers so they can check your driving record to give you the most accurate quote.
How To Reduce Car Insurance Rates For New Drivers Under 25
There are several ways to reduce car insurance rates for drivers ages 15 to 25.
Some tactics we’ll discuss can lower your rate on the front end, beginning while you’re shopping for rates. Other strategies will create savings once you have bought coverage.
Let me say that because car insurance is expensive, and you have to pay it year after year, every big and little thing you can do will help save you money over the long run.
Here are the best ways to save. Some of these can be done even before the young driver even gets his or her driver’s license:
If possible, make sure that your under age driver takes some type of Driver Training.
Schools offer courses for free but even if you have to pay for a course, it’ll pay off: The reduction in insurance rates will save money in the long run. And, your young driver will hopefully become a safer driver.
Make Good Grades
Most of the best auto insurance companies for drivers under 25 will offer some type of Good Student Discount.
Some of these discounts drop off when the drivers turn 20 or 21 years old. You will have to check with your insurance company for details.
Get the Right Car
Make a well-thought-out decision about the car the teen or young adult will be driving.
By this I mean you have to decide if your young driver will have an older, inexpensive car that is not worth much money, or a newer car with more safety features such as lane departure warnings, back up cameras, more air bags, anti-theft devices, etc.
Older cars cost less to insure because replacing these cars would cost less money. But the safety features on newer cars can create discounts.
Find Apps for Teenage Drivers
There are many different types of apps to help young drivers drive more safely, as well as apps for parents to monitor the driving habits of underage drivers.
Parents who are paying for the car, the car insurance, and the phone of a young driver have the right to install whatever app you want to on their phones.
When 16 or 17-year-old drivers know their speed and locations are being monitored, they tend to drive more safely.
According to the South Carolina Department of Insurance website, shopping around to compare auto rates is one of the best ways to save money in the long run.
This is more true for young drivers ages 15 to 24 than for any other ages.
I could relate to this when my children started driving when they turned 15. (I live in South Carolina.)
At the time I had a policy with Travelers Insurance which had great rates. However, since driver age, gender, and other factors have different effects on different insurers, Travelers’ rates were not the lowest for new drivers just getting licensed.
Not long after my wife and I were married, in the first five years of our marriage, we had a 3-1/2 year old, a 2-¼ year old, and a 1 year old. Then, we brought home a newborn from the hospital.
In those years we were not thinking about car insurance rates for new drivers — and it was costly later on.
Anyway, when I got auto insurance quotes from several different companies, I found that we saved over $1,000 every six months simply by changing to a company with lower rates.
You have to shop around to find out where you can save.
More Ways to Save on Auto Insurance for Young Drivers
When you’ve chosen an insurer, you can customize your coverage to optimize savings. Here’s how:
Choose a Higher Deductible
If you buy a policy that includes Comprehensive and Collision coverage — and typically you do on cars worth more that a couple of thousand dollars — then take a higher deductible such as $500 or $1,000 if you can handle it.
A higher deductible will save you money on your car insurance premiums. You will still have to carry some type of liability insurance, and other possible no-fault coverage or uninsured motorist and underinsured motorist coverage (every state is different).
Higher deductibles save money on premiums, but you’d have to pay more out-of-pocket if you file a claim.
Avoid the Additional Car
For young drivers turning 15 or 16 years old, try to avoid buying an additional car unless it’s absolutely necessary. You will save money if the youngest driver in the family is listed as a part-time driver versus being a full-time driver on a vehicle.
Also, check your policy after you add the young driver. If the young driver will never drive Dad’s new work vehicle, don’t let the insurance company rate the driver on the most expensive vehicle.
One call to the company can save you money by avoiding this mostly unknown tactic by the insurance companies to increase the insurance rates.
Use Your Do Not Disturb Feature
Make sure your young driver – actually make sure every driver in the household – has the Do Not Disturb feature activated on his or her iPhone or Android phone.
It is very easy to do, and this one feature can not only save money on car insurance but could also save a life by avoiding an accident caused by a distracted driver.
Get a ‘New Driver’ Sticker
It may cause some anguish and slight embarrassment for your teen driver, but a bumper sticker that says “New Driver Please Be Patient” can be helpful. Your young driver may protest, but when it’s your car, it’s your decision.
I will say personally that it worked for me, and here is a picture of one of my kid’s first cars with the bumper sticker “New Driver Please Be Patient.”
Will this immediately save money and lower your car insurance rate? No. But it might keep the person behind your inexperienced driver from sitting on the horn while your new, indecisive driver sits at a green light trying to decide which way is left!
And if this keeps your driver from having an accident (even a not-at-fault accident), it will ultimately keep your rates lower.
Install a Telematics Device
A Telematics device can monitor the driving habits of drivers and encourage drivers to drive safely.
Different insurance companies have different approaches:
- Progressive’s Snapshot device plugs into most newer car’s OBD-II port to gather and send data about driving habits to the insurance company.
- Allstate’s Drivewise Mobile App doesn’t require a device that plugs into the car; it uses a smartphone to gather and send analytics.
- General Motors uses its OnStar technology to communicate with several different insurance companies.
There’s good and bad about these devices: Insurance companies could also increase your premiums based on your driving habits.
Have the Young Driver Pay the Premium
Here’s an outside-the-box but simple idea that often helps keep premiums lower: Have your young adult driver pay the insurance premium.
When the young driver pays for the insurance, he or she will have a built-in financial incentive to avoid the bad habits that lead to accidents.
Along these same lines: You could call your insurance company and ask them to re-rate your policy to include a speeding ticket or a charge for running a stop sign. This can show your new driver how big an impact such an infraction can have on your insurance bill.
Saving Money in the Long Run
The safer you drive — using every tool available — the lower your insurance rates will be in the long run.
Safe driving helps maintain your Safe Driver discount or your Loss Free Discount, and it helps keep you in the insurance company’s lowest rating tier.