Best Cheap Car Insurance for Young Adults: Drivers’ risk factors for higher auto insurance rates change as they transition from adolescent to early adulthood. Discounts for good grades may no longer exist, but if drivers have kept up strong credit histories and clean driving records when they enter their 20s and beyond, they should find themselves paying lower rates.
Best Cheap Car Insurance for Young Adults Ranking
Look at our ranking of the Best Cheap Car Insurance for Young Adults to get a cost-effective plan that meets your needs.
How to Get Cheaper Teen Car Insurance
Now that you understand why teenagers are more expensive to insure, it’s helpful to know how to lower the rates for teenage drivers. The first tip to lower the cost is taking an approved driving course. Those who take certain driving courses, such as Graduated Driver Licensing or defensive driving courses, can qualify for discounted rates. The GDL courses help teenagers become safer drivers, while defensive driving courses can teach teens how to drive defensively. The completion of a defensive driving course could save up to 10 percent on car insurance rates.
Another discount is usually available to teenagers with good grades. Most insurance companies offer a good student discount, which often requires a GPA of 3.0 or higher. Before purchasing an auto insurance policy, it’s always best to shop around to get the best deal. Start by getting quotes from multiple companies. Every insurance company uses its own method to determine the cost of coverage, so some companies charge teenage drivers more than others. Shopping around and reviewing your options is an important step in the process of lowering your rate.
According to Nerdwallet, lower rates are also available when you bundle auto insurance with other coverage, such as homeowners or renter’s insurance. Since teens don’t usually need additional coverage, they can save by sharing a policy with their parents, who may have homeowners, life, and other types of insurance coverage.
Who Has the Best Rates for Young Adults?
Best rates for the military community: USAA, which offers car insurance policies exclusively to members of the U.S. military, pre-commissioned officers, veterans, and their spouses and children, has the cheapest rates for young adults, according to our study. A female young adult driver will pay an average of $1,219 annually for a policy from USAA, a savings of roughly $539 compared to the average among insurers we studied. Male young adult drivers will pay an average of $1,280 annually for a policy from USAA, which is $580 below the overall national average.
Best rates for non-military members: For drivers without a direct or family connection to the military, Geico offers the lowest rates in our study. The company’s average annual rate for a female young adult driver is $1,346, which is about $412 less than the average rate of the 10 companies in our analysis of insurers. Male drivers will pay an average of $1,357, a savings of $503 compared to the national average rate.
Because car insurance rates are based on many individual factors, your rates will differ from those shown here, which are for comparison purposes only.
Cheapest Car Insurance Companies for Young Adults
|Company||Single 25-year-old female||Single 25-year-old male|
Cheapest Car Insurance Companies for Young Adults
While the price of car insurance is an important factor, young drivers should look for more from an insurance company than just an affordable price. Different insurance companies provide customers with different levels of service and satisfaction. Some insurance companies offer young drivers extras, such as accident forgiveness or roadside assistance. Here’s a look at the five least expensive auto insurance companies for young adults.
In our ranking of the country’s best car insurance companies, USAA holds the top spot. In addition to affordable car insurance rates for young adults, USAA has an excellent reputation among its member-customers for its claims handling and customer service.
For young adult drivers, USAA offers the best rates in our analysis. A male young adult driver can expect to pay $1,280 per year for their car insurance policy through USAA. Our data shows a female at this age has an average rate of $1,219 per year. Both represent a savings of more than $500 compared to the average prices for this age group in our study of the nation’s largest insurance companies.
USAA offers car insurance policies exclusively to members of the U.S. military, pre-commissioned officers, veterans, and their spouses and children, so many consumers will not qualify for membership.
In our ranking of the best auto insurance companies, Geico is tied for third. According to our study, Geico’s rates are some of the lowest among the companies in our rating.
Geico is one of the cheapest insurers for our young adult driver profiles. Though everyone’s rates may vary based on numerous factors, our study shows a young adult male driver can expect to pay $1,357 per year and a young female would pay $1,346. The study rate for the male is more than $500 below the national average for our young adult driver profile, while the female’s representative rate is more than $400 below the national average.
State Farm earns the second spot in our rating of the best auto insurance companies.
Young adults looking for an insurance policy will likely find that State Farm does not have the lowest rates available, though they are cheaper than average. The young adult female driver in our study can expect annual coverage rates of $1,381, while a male’s policy will cost $1,537. Those study rates are $377 and $323 cheaper, respectively, than the average rates for this age group among the 10 companies in our study.
Our ranking of the best auto insurance companies shows Travelers tied for the sixth spot.
The company’s representative rates for the young adult driver profiles in our survey aren’t the lowest in our analysis, but they’re still comparatively affordable. The young adult female driver in our study has a representative rate of $1,456 per year, while our sample male customer gets a premium of $1,512. The representative rates are $302 and $348 lower per year, respectively, than the average among the 10 companies we studied.
American Family ranks 10th in our rating of the Best Car Insurance Companies. Despite its ranking, the insurer does offer competitive rates to some drivers, including young adult drivers.
A young adult female driver can expect to pay an average rate of $1,617 annually for a policy from American Family, or $141 less than the overall national average. A male driver the same age will pay an average annual rate of $1,663, a savings of $197 when compared to the national average.
Car Insurance Discounts for Young Adults
When you leave your teen years and enter young adulthood, several potential auto insurance discounts will fall by the wayside. That student discount for new drivers and money saved by getting good grades won’t be available to you anymore. Neither will any discounts you qualify for as a covered driver on your parent’s multi-car policy. While some companies extend good student discounts to college students, once you graduate, that discount you get for being a good student will end.
There are, however, many auto insurance discounts that young drivers may qualify to receive. One of the biggest you can potentially be eligible for is a multi-policy discount. Most insurers will provide a substantial discount when you have your car insured with the same company you use for your renters or homeowners coverage. Merging your policies with a spouse or domestic partner may qualify you for a multi-vehicle or multi-line discount. However, you should consider whether their driving record, credit score, or vehicle’s characteristics will have a detrimental effect on your rates.
An affinity discount is where a car insurance company offers driver discounts to members, employees, or customers of an organization. Some examples that young drivers may qualify for include those discounts offered to people associated with auto clubs (such as AAA), credit unions, employers, or the military. Some insurance companies offer special discounts to customers with certain types of jobs, such as first responders, teachers, and nurses.
College graduates should check with their school’s alumni department to see if they have relationships with any insurance companies. Many alumni associations offer affinity discounts as a perk of being a member.
Use a tracking device
A growing number of insurers offer discounts to customers who agree to have tracking and driver behavior-monitoring devices installed in their vehicles. Not only do the trackers allow for usage-based premiums that are beneficial to young drivers who don’t spend too much time behind the wheel, but they can also track instances of hard braking, rapid acceleration, and the number of times advanced safety technologies kick in. Young adults who have low mileage each year and prove to be good drivers benefit the most from these tracking and pay-as-you-drive programs.
How Young Drivers Can Save on Car Insurance
Qualifying for discounts isn’t the only way young drivers can reduce the amount they pay for car insurance. Buying the right car, choosing the proper coverages, and setting appropriate deductibles are critical things to do upfront. Keeping a claim-free history with no at-fault accidents, watching your credit score, and being a good driver by avoiding moving violations (such as speeding) will help to keep your cheap car insurance cheap.
Choose the right car
Different vehicles lead to various auto insurance rates. High-performance vehicles, luxury cars that are expensive to repair, and vehicles with high theft rates will cost more to insure than other models. Contacting an insurance agent, or getting an online quote before you buy, can prevent you from locking yourself into purchasing a car that will cost you too much to insure.
Review your coverage
Different young drivers need different levels of insurance coverage. Our guide to how much car insurance you need takes you through the various available coverages and how to assess the level of coverage you need. It is important to note that different states require different levels and types of auto insurance coverage. Most lenders and leasing companies do as well, so they can be sure the collateral (your car) that is backing the loan is well protected. Remember, the state and lender requirements are the minimum coverages you should have. In some cases, you’ll want more than just the minimum coverage — even if it comes at a price.
Pick the right deductible
Having a super-low deductible you have to pay in case of an accident might sound like a great idea, but you need to balance the cost of the policy with the price you have to pay to get a low deductible. In many cases, you’ll want to choose the highest deductible you can reasonably afford to pay, and that your lender and state allow.
Your deductible should not be higher than the amount you have free in savings to cover an emergency. Saving some money to have a $1,000 deductible does you no good if you only have $500 in the bank.
Keep a claim-free record
One of the biggest drivers of high auto insurance rates for new drivers is a high at-fault accident rate. If you’ve made it through your years as a new driver, and then a teen driver with a clean driving record, your rates should go down dramatically as you become a young adult. By keeping your driving history clean, you can maintain the lower prices you have earned. Some insurance companies offer accident forgiveness for your first at-fault incident, but not all do. It’s essential to read the fine print of any policy you’re considering to see exactly what the accident forgiveness clause means to that insurer.
Pay your bills on time
As you leave school and start your own household, it’s easy to miss a bill payment or two. If you want to have affordable car insurance, however, you can’t miss any payments – especially those on credit cards or loans. In most states, auto insurance companies can use your credit score when setting your premiums. The lower your score, the more they can ask you to pay at premium time.
It might seem obvious, but it’s important to avoid traffic tickets if you want to keep your car insurance costs low. Remember that violations you receive in rental cars, friend’s vehicles, out of state, or even on your bicycle can count against your driving record. Teen drivers who received citations during their early driving years will see their poor track record hold their rates high for their first few years as young adults.