Cheapest Car Insurance for Drivers Under 21 (2024)

Finding cheap car insurance as a young driver is tough. The average cost of liability-only car insurance for teenage drivers on their own policy is $188 per month, though you could save if your parents can add you to their policy.

Young drivers have the least experience and the highest crash rates, so insurers set higher rates to account for that risk. Do some research and talk to friends and family to figure out your ideal coverage. Then, compare car insurance quotes to find the best deal. Keep an eye out for discounts that can save you even more for completing driver’s ed, getting good grades, or practicing safe driving habits.

Cheapest car insurance for young drivers

Insurance for young drivers is pretty expensive. Insurers set rates based on risk, and drivers 16–24 years old have the highest crash rates of any age group, according to the Insurance Institute for Highway Safety (IIHS). Drivers in their 50s and 60s pay the lowest rates, which start increasing slightly for drivers in their 70s, when data shows crash rates also increase.^[1]

These are the cheapest liability-only and full-coverage auto insurance quotes for young drivers by insurance company.

Average cost of car insurance for drivers under 21

Drivers in their teens and 20s pay some of the highest insurance rates of any age group. For teen drivers, this is because statistics show they have crash rates nearly four times those of drivers 20 and older, according to the IIHS. The good news is your rates will drop over time if you maintain a clean driving record, and they get a lot cheaper once you hit 25 years old.

Men are statistically riskier drivers than women, especially drivers 16–29 years old, according to the IIHS. Since insurers base rates on risk, young women pay less for insurance than young men, according to the Insurance Information Institute (Triple-I).

Best car insurance companies for drivers under 21

Affordability is important, but discounts, optional coverages, and usage-based programs could all help you save, depending on your needs. Comparing quotes and doing your research will help you find the best fit for your lifestyle. 

These three car insurance companies have competitive rates for young drivers, lots of discount options, and coverages that could help you out of a tough spot.

Auto-Owners: Best for low rates

State Farm: Best for discounts

Nationwide: Best for low-mileage drivers

Staying on your parents’ policy vs. getting your own policy

If you’re driving your parents’ vehicle and are younger than 18, staying on your parents’ car insurance policy is a no-brainer. As a minor, you won’t be able to buy your own policy without the written consent of a parent or guardian. 

If you have your own car, the decision might not be so cut-and-dried. Each option has advantages and disadvantages, and the best choice depends on your situation.

When to stay on your parents’ policy

Sticking with your parents’ policy is the obvious choice if you drive their car and are younger than 18. It usually means lower rates than if you had individual coverage, thanks to multi-car and multi-driver discounts. You also benefit from your parents’ good driving records and established coverage history. Keeping your car insurance with the same company and not letting it lapse can lead to discounted rates later on.

The downside is that your driving history affects the premiums for the entire policy. For example, your parents’ insurance rates will increase if you’re in an accident or get a speeding ticket. Plus, even though there’s no age limit for being on a parent’s policy, some companies may require you to have a policy in your name under certain circumstances, such as if you move out of your parents’ home.^[2]

Here’s how rates compare for teens on their own policies versus staying on their parents’ insurance.

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When to get your own car insurance policy

Generally, you can stay on your parents’ car insurance as long as you continue to live at home, even if you go away to college. At some point, you’ll need to purchase your own policy. It gives you full control over how much coverage you have and limits the financial impact of any claims you make to your policy alone.

But you’ll pay some of the highest rates, especially if you’re younger than 21. Data shows that younger, less experienced drivers are more prone to accidents, which can drive up costs.

A few situations can make getting your own policy necessary or highly beneficial, such as:

• Moving out: Insurers typically limit a shared insurance policy to drivers in the same household. When you move out, unless you’re going off to college, you’ll need a policy in your name.^[3]

• Buying a car: When you buy a car, especially if you take out a loan for it, you may need an individual policy. It depends on the insurer. Some car insurance companies will let you remain on your parents’ policy if you live at home and park your car there.

• Negative driving record: Insurance companies can remove you from the family policy if you have several accidents or driving infractions.

• Different coverage needs: Getting your own policy might be necessary if you have different coverage needs. For example, you might own a valuable or modified vehicle or have a long commute that requires specific coverage your parents’ policy doesn’t offer.

How car insurance coverage works for first-time drivers

You’ll need to buy at least your state’s minimum liability coverage to get behind the wheel since all states except New Hampshire require car insurance. Triple-I recommends all drivers — but especially young adults and less experienced drivers — buy the highest affordable liability limit for broader financial protection. 

Minimum requirements vary by state but usually include at least:

• Bodily injury liability coverage: Bodily injury liability covers injuries you cause to someone else while driving.

• Property damage liability coverage: Property damage liability pays for damage you cause to someone else’s property while driving, such as a car or a fence.

Some states require additional coverages, including:

• 

  Personal injury protection coverage

  If you’re injured in an accident, personal injury protection covers your and your passengers’ medical and funeral expenses, rehabilitative therapies, and even lost wages.

• 

  Medical payments coverage

  Medical payments coverage only pays for medical and funeral expenses but can also cover you and your family if a car injures you as a pedestrian, as well as injuries to you and your passengers in a vehicle.

• 

  Uninsured/underinsured motorist coverage

  Uninsured/underinsured motorist coverage reimburses you if a driver without any or enough liability insurance injures you or damages your vehicle.

While liability insurance covers injuries and damage you cause to others, you’ll need other coverages to insure damage to your car. Liability coverage plus comprehensive and collision coverage typically round out what’s called a full-coverage car insurance policy. 

Here’s how those work:

• Collision coverage: Collision insurance pays for damage to your car from a crash with another car or object, such as a tree or telephone pole, or from rolling over.

• Comprehensive coverage: Comprehensive insurance reimburses you for non-collision losses and damages from things like theft, fire, falling objects, floods, earthquakes, and contact with animals like deer.^[4]

You may also want to consider optional coverages. For example, roadside assistance is usually an add-on that will send support if you need your car battery jumped or your vehicle towed. Not all insurers offer the same optional coverages, so comparing policies will help you find the best fit.

Factors affecting car insurance rates for teens

Insurers use several factors to calculate premiums, and each has a slightly different way of doing it, which is why comparing quotes is a good idea. These are some factors that affect your car insurance rates:

• 

  Your age

  Drivers with less experience are riskier to insure than more experienced drivers. Drivers in their teens and early 20s pay the highest rates, but rates start to drop when you reach 25 years old.

• 

  Your driving record

  You may not have much of a record yet, and that’s okay. Just know your driving habits affect your rates significantly. For example, drivers with speeding tickets pay higher rates.

• 

  Crash data

  Even if you’re a careful driver, statistics show teen drivers have disproportionately high numbers of crashes and crash deaths, according to the IIHS. The numbers may be against you, but maintain a clean driving record and your rates will likely decrease as you age.

• 

  Your gender

  Men are more likely to engage in risky driving behavior, like not using a seat belt and driving while impaired, according to IIHS data. Since insurers set rates based on risk, male drivers typically pay more for coverage than female drivers.

• 

  Where you live

  Drivers in urban areas pay more expensive premiums than rural drivers due to higher rates of theft, vandalism, and accidents.

• 

  Vehicle type

  A car’s cost of repairs, safety record, and engine size can all affect your premium. A brand-new luxury car is more expensive to insure than a slightly older car with high safety ratings.

• 

  Your coverage amounts

  How much liability and other coverage you buy and your chosen deductible affect what you pay for insurance.

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6 ways to save on car insurance if you’re under 21

While you may now pay more for car insurance than older drivers, you can still find ways to save. These strategies can help make your premium more affordable:

1. Take advantage of available discounts. Most insurers offer discounts to young drivers who maintain good grades since those students are statistically less likely to exhibit risky driving habits.^[5] The exact grade requirements vary, so check with your insurer.

2. Complete a driver’s education course. Since your driving record affects your premiums significantly, it’s smart to invest time into becoming a safe, capable driver (your state may even require it). Some insurers offer discounts for completing an approved driver’s education program or defensive driving class.

3. Compare car insurance quotes. Experts agree that it pays to shop around. Triple-I recommends drivers get at least three quotes to compare prices, discounts, and coverage options to find the best policy.

4. Drive a safe, cheap car. If your car has high safety ratings and is less expensive to repair, you’ll pay less to insure it than a brand-new, luxury, or classic car.^[6] If you’re not sure where to start, the IIHS publishes vehicle safety ratings every year.

5. Buy less insurance coverage. If you’re paying more to insure your car than your car is worth, it might be a sign to reduce your coverage. Buying liability-only instead of full coverage can help you save. Just be sure you can afford to pay out of pocket for repairs if you’re in an at-fault accident.

6. Explore other discounts. Insurers offer discounts for things like paying your premium in full, choosing paperless billing, and bundling multiple policies — which help you save if you’re on your parents’ policy. If you attend college more than 100 miles away from home, you may also qualify for a student away at school discount.

Car insurance for drivers under 21 FAQs