Best Cheap Car Insurance for 21-Year-Old Drivers (2024)

How much is car insurance for a 21-year-old?

On average, 21-year-olds pay just under $100 per month for liability-only coverage, Insurify data shows. But their monthly rates can reach as high as $422. Full coverage is even pricier, with average premiums ranging from $162 to $495.

Find Affordable Car Insurance for 21-Year-Olds

Liability-only rates start around $20/mo.

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Factors that affect car insurance rates for 21-year-olds

“Youthful drivers cost more on their insurance policy due to driving record history as a demographic. Even with a clean driving record, younger drivers historically have more accidents due to lack of driving experience,” says Dom Frey, a licensed insurance agent in Ohio with Hitchings Insurance Agency.

Insurers also consider the following factors when determining your car insurance rates:^[2]

• Driving record: Insurance companies see your driving record as an indicator of how likely you’ll have a future incident. A history of accidents and traffic violations can result in higher insurance rates. DUIs in particular will cause very high premiums.

• Credit history: Drivers who keep their credit scores up are more likely to be responsible behind the wheel. Insurers use credit history to generate credit-based insurance scores that they then use to set rates about 95% of the time.

• Gender and marital status: Younger drivers — particularly male drivers — have more accidents, leading to higher premiums.

• Vehicle type and how you use it: The make and model of your vehicle, as well as how often and how far you drive, affect your rates.

• Location: Where you live and park your car plays a role. Drivers in urban areas may see higher rates because accidents and auto thefts are more frequent than in rural areas.

• Insurance history: If you don’t have auto insurance when you apply for coverage, most insurers will charge you more. You might also face higher premiums if you carry only state-minimum coverage.

• Liability limits: Your choice of coverage affects your cost. Higher policy limits come with better financial protection, but you’ll pay higher rates.

• Policy deductible: Going with a higher deductible can get you lower premiums since you agree to pay more out of your pocket when you file a claim. Just be sure you can cover the out-of-pocket costs if you need to file a claim.

Cheapest car insurance companies for 21-year-old drivers

The insurance company you choose can influence the car insurance rates you’ll pay, so it’s important to compare car insurance rates. Here's a look at average monthly rates for liability-only and full-coverage policies for 21-year-olds from some top insurers.

While not necessarily the cheapest option for all drivers, the following insurance companies offer good rates, discounts, and policy options for young drivers.

Plymouth Rock Assurance

Auto-Owners

Erie

USAA

Average car insurance rates by age and gender

Car insurance costs vary considerably by age and gender, with males paying more than females on average.

“The reason male drivers might pay more is because statistically they are involved in more accidents, especially under the age of 25,” says Ashley Jantovsky, licensed insurance agent for Perfect Price Insurance Agency in Livonia, Michigan.

Men tend to engage in riskier driving behaviors than women, including driving under the influence, driving without a seatbelt, and speeding, according to the Insurance Institute for Highway Safety (IIHS). From 1975 to 2020, men had a 136% higher chance of being involved in a fatal crash on average, according to IIHS data on motor vehicle crashes.^[3]

The table below illustrates that male drivers pay higher monthly liability-only and full-coverage automobile insurance rates.

Average car insurance rates by state for 21-year-olds

“Each state is governed by its own set of insurance laws. As a result, insurance coverage is different, and experiences with claims are different, so the overall rates end up being different, too,” says Jantovsky.

You’ll also find cost differences between urban, suburban, and rural areas. Urban and suburban areas tend to have higher rates due to increased traffic, more vehicles on the road, and higher crime rates.

The table below shows a significant variation in monthly state car insurance premiums for 21-year-olds. For instance, 21-year-old drivers in North Carolina pay the lowest car insurance premiums, while New York’s average rates are up to 900% higher.

Cheapest states for car insurance for 21-year-olds

Your state’s minimum liability insurance requirements and whether you live in a no-fault or at-fault state can significantly affect your car insurance costs. States with higher liability minimums tend to have higher insurance premiums.^[4] Additionally, insurers in no-fault states take on more risk because they cover medical expenses and lost wages regardless of fault.

Some states allow insurers to use credit as a rating factor, which means your credit score can affect your insurance premiums.^[5] Below are the cheapest states for car insurance for 21-year-olds. Young drivers in North Carolina pay nearly 58% less for a monthly liability-only policy than drivers in Iowa.

Most expensive states for car insurance for 21-year-olds

Teen drivers and drivers younger than 25 are statistically more likely to be in accidents, especially males.^[6] Insurers charge higher premiums to offset the higher risk. However, different states can also have different rates because of weather-related hazards.

States with a higher likelihood of hailstorms, hurricanes, or tornadoes need to account for the potential damage to vehicles, resulting in higher insurance rates. 

Insurance is most expensive in the following five states for 21-year-olds:

Best auto insurance discounts for 21-year-olds

Auto insurance discounts allow policyholders to reduce their premiums. They’re like rewards for meeting specific criteria, such as being a safe driver or having a low-risk vehicle. Some discounts are specifically for young drivers, such as:

• Good student discount: This discount is for students who maintain a certain grade point average or higher.

• Away-at-school discount: If you attend college or live away from home for an extended period, you may be eligible for this discount.

• Bundling discount: If you own or rent your own place, or if you’re on your parent’s policy and they own a home, ask about bundling your policies to save on your car insurance.

• Safe driver discount: This discount is best if you have a clean driving record with no accidents or violations.

• Multi-car discount: If you and your family have more than one car, you can save money on your insurance by getting a multi-car discount.

• Pay-in-full discount: Some insurers offer savings if you pay your premium in full rather than making monthly payments.

• Defensive driving course discount: Completing a certified defensive driving course can qualify you for a discount with some insurers.

• Telematics: These programs offer young drivers an opportunity to save on car insurance premiums by monitoring their driving behavior through an app or device.

How to get cheap car insurance for a 21-year-old

Generally, you’ll pay more for car insurance when you’re 21 than your older peers, but several options are available to reduce your overall costs.

Comparison shop

To ensure you’re getting the best deal on car insurance, shopping around to compare quotes from multiple insurers is essential. Different insurers will offer different rates based on various factors, such as the type of car you drive, your driving history, and where you live. By comparing quotes, you can find the best price for the coverage you’re looking for.

Choose the right car model

The type of car you drive can have a big effect on your insurance rates. Generally, newer or more expensive vehicles will be more expensive to insure. If you’re looking to save money on car insurance, consider choosing a car that’s less expensive or has a good safety rating. Vehicles with a high safety rating and lower cost of repairs can help you lower your rates. "A good rule of thumb is 'boring is cheaper,' " says Daniel Roccato, a clinical professor of finance at the University of San Diego School of Business.

Opt for a high deductible

A higher deductible can help you save money on your car insurance premiums. A deductible is the amount you pay out of pocket before your insurance kicks in to cover the rest of the costs.

By selecting a higher deductible, you’ll be responsible for paying more out of pocket if you get into an accident, but you’ll also pay lower premiums each month.

Maintain a clean driving record

A clean driving record is one of the best ways to keep your car insurance rates low. Avoiding accidents, traffic violations, and DUIs can help keep your insurance costs down.

If you get into an accident or receive a violation, your insurance rates will likely go up, so driving safely and responsibly is important.

Keep a good credit score

Your credit history can also affect your car insurance rates. Depending on your state, insurers may use your credit as a factor when setting your premiums. To maintain good credit, it helps to pay your bills on time and keep your credit utilization low.

Go (or stay) on a parent’s policy

“If a 21-year-old lives at home, they can stay on their parent’s policy, and I’d recommend that,” says Frey. “They likely receive a multi-car discount and auto-home discount — two large discounts they likely miss if they are on their own policy. Now, if they do not live at home and are not a full-time student, then most carriers will require them to be on their own policy.”

However, there’s a catch. “Parents should be forewarned that having their name on their child’s vehicle title opens them up to liability, and, in the event that a young driver has a claim, it can have an adverse effect on their overall household insurance premiums going forward,” Jantovsky says.

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