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Cheap Car Insurance Under 25 Years Old

While car insurance can be expensive for some young drivers, it’s possible to find a more affordable policy. Some car insurance companies have cheaper rates than others, so it’s worth comparing rates from a few different insurers before you purchase a policy.

In this guide, we’ll reveal how much car insurance costs for a 25-year-old and explain how you can find cheap car insurance under 25.

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Why you can trust Rate Retriever

Our rates are based on public rate filings obtained by analytics company First Interpreter. While we may partner with some of the carriers you see on our site, we maintain editorial independence and it does not affect the rates you see. Read more about our rating methodology or see our rigorous editorial policy. 

Written by Alyssa DiCrasto

Reviewed by Rob Deming

Last updated: February 26th, 2024

What is the best car insurance for people under 25 years old?

In general, young adults pay some of the highest rates for auto insurance. However, premiums start to come down around age 25, assuming you have a clean driving record and no recent insurance claims. Besides your age, some other factors that impact the cost of your car insurance are your location, gender, and vehicle type.

There isn’t a single car insurance company that is the best carrier for all drivers under 25 years old. The best car insurance company for you depends on your coverage requirements, your budget, and what you value in an insurance provider.

To simplify your insurance shopping journey, you can use Rate Retriever. Take our five-question quiz to see your best matches and find a car insurance policy that fits your personal insurance needs.

We’ve found that some of the most affordable insurance companies for drivers 25 and under include: Geico, Erie Insurance, American Family Insurance, and Nationwide. These companies provide affordable coverage for this demographic in large portions of the US, but you may be able to find a better deal tailored to your profile.

Geico Auto Insurance
Erie Auto Insurance
American Family Auto Insurance
Nationwide Auto Insurance
State Farm Auto Insurance

How much does car insurance cost for a 25-year-old driver?

The average cost of car insurance for 25-year-old drivers is around $2,200 per year, which is about $183 per month. However, you might pay a higher or lower rate depending on your specific situation and driver profile.

When you apply for a car insurance policy, the insurance company looks at a variety of factors, like your ZIP code, driving record, credit score (in some states), claim history, gender, and vehicle. These factors are all used to calculate your unique premium.

In addition, studies have shown that young males typically pay higher rates than young females. The average cost of car insurance under 25 for males might be higher than the average rate for 25-year-old females.

What is the cheapest car insurance for drivers under 25?

The average cost of car insurance for drivers under 25 depends on whether the driver is on their parent’s car insurance policy or their own plan. In general, it’s much more expensive for drivers under 25 to purchase their own car insurance policy. Staying on a parent’s plan usually results in a much lower cost.

For young drivers on their own car insurance plans, the average car insurance premium also varies based on age. On average, teenagers and young adult drivers can expect to pay well over $3,000 a year for their own car insurance policy. Around age 25, the cost of car insurance comes more in line with the national average.

Average car insurance rates for young adults

However, the cost of car insurance for young adults also varies based on the insurance company you choose. Based on our analysis of rate data, we found that Progressive offers the lowest rates for 25-year-olds.

In the table below, you can see the top car insurance carriers for 23-year-old drivers, so you can get an idea of some of the cheapest car insurance companies for young adults:

Company Average Annual Premium
USAA 2,044
Progressive 2,247
Travelers 2,354
Geico 2,359
Nationwide 2,385
Auto-Owners Insurance 2,677
State Farm 3,274
Allstate 3,457
Farmers 3,546
Annual rates for a male driving a 2023 RAV4, estimated using public rate filings sourced from First Interpreter.
Rates
do not represent actual quotes. Accurate as of January 2024.
 

For comparison, you can see the average car insurance rates for 25-year-old drivers in each state below:

Annual rates for a male driving a 2023 RAV4, estimated using public rate filings sourced from First Interpreter.
Rates
do not represent actual quotes. Accurate as of January 2024.
 

Cheap car insurance for young adults

Does car insurance actually go down at 25?

If you haven’t reached your 25th birthday yet, you’ll be happy to know that car insurance premiums usually go down around that age. Most drivers will see their car insurance premiums decrease when they turn 25.

However, that doesn’t mean your rate is guaranteed to drop when you turn 25. Besides age, there are many other factors that affect the cost of your car insurance premium. If you have multiple accidents or traffic violations on your record at age 25, your car insurance rate might not get any cheaper.

When does car insurance go down infographic_Car Insurance by Age - When does car insurance go down

Why is car insurance cheaper at 25?

Car insurance is usually cheaper at age 25 because most drivers have almost a decade of driving experience under their belts.

The main reason why young drivers pay expensive rates for auto insurance is that they are newly licensed and don’t have much driving experience. Data shows that teen drivers between the ages of 16-19 have the highest accident rates and are more likely than older drivers to make critical errors that lead to serious crashes.

By age 25, insurance companies assume that most drivers have mastered safe driving behaviors and are less likely to get into an accident. Therefore, car insurance companies start to lower auto insurance rates around this time.

How can 25-year-olds save money on car insurance?

Most 25-year-olds are looking for the cheapest car insurance premium for their situation. Here are a few ways to potentially save money on your policy:

1. Discounts

Most national and local car insurance companies offer discounts, which can lower your rate. There are savings for good students, claim-free drivers, paying your premium in full, insuring multiple vehicles, having safety features in your vehicle, and many others. Every carrier offers different discounts with varying savings potential.

2. Policy bundling

If you own a home or rent an apartment, you might be a good candidate for a bundling discount. When you purchase an auto and property insurance policy from the same insurance company, you can usually get a significant discount on your combined premium.

3. Avoid tickets & accidents

In general, safe drivers pay the lowest car insurance rates. Maintaining a clean driving record and avoiding tickets and accidents can help you lock in the most affordable car insurance premium.

4. Choose higher deductibles

If you have car insurance policies that require a deductible, like collision insurance, consider choosing a higher deductible to get a lower premium. The higher your deductible is, the lower your premium will be.

5. Compare rates

Comparing personalized rates from several car insurance companies will help you find the cheapest policy for your situation. You should also compare new rates every few years to make sure you’re still getting the best price.

Car insurance FAQs for under 25 years old

Do I need car insurance if I’m a college student living on campus?

Yes, it is important to have car insurance even if you are a college student living on campus. While you may not be driving very often, having insurance can still protect you in case of an accident. Additionally, many schools may require proof of insurance if you plan on parking your car on campus. It’s always better to be safe than sorry and have insurance coverage in case something unexpected happens while you are driving.

How does my age and driving experience affect my car insurance rates as a young adult?

As a young adult, your age and driving experience can have a big impact on your car insurance rates. Insurance companies see younger drivers as more risky because they may not have as much experience on the road. This can lead to higher rates. However, as you gain more experience and prove that you are a safe driver, your rates may decrease over time. It’s important to drive safely and maintain a clean driving record to help keep your insurance rates lower as you get older.

How does car insurance for drivers under 25 differ from other age groups?

Car insurance for drivers under 25 is usually more expensive compared to older age groups. This is because younger drivers are considered to be more risky due to their lack of driving experience and higher likelihood of getting into accidents.

Why are car insurance rates typically higher for drivers under 25?

Car insurance rates are usually higher for drivers under 25 because they are considered more risky to insure. Young drivers have less experience on the road and are more likely to get into accidents. Insurance companies have to pay more money to cover claims for accidents involving young drivers, so they charge them higher rates. As drivers get older and gain more experience, insurance rates typically go down. It’s important for young drivers to drive safely and follow the rules of the road to help keep their insurance rates lower.

What factors affect the cost of car insurance for drivers under 25?

The cost of car insurance for drivers under 25 can be affected by several factors. These include the driver’s exact age, driving record, type of car, and location. A clean driving record and good credit score can help lower the cost of insurance. Shopping around and comparing quotes from different insurance companies can help find the best rates for young drivers.

Are there any discounts available specifically for drivers under 25?

Yes, some insurance companies offer discounts specifically for drivers under 25. These discounts can help younger drivers save money on their car insurance premiums. To take advantage of these discounts, drivers under 25 may need to meet certain criteria such as maintaining a good driving record, taking a defensive driving course, or being a student with good grades. It’s important to check with individual insurance providers to see what discounts are available for younger drivers.

What type of coverage do I need as a driver under 25?

As a driver under 25, it is important to have auto insurance coverage that protects you in case of an accident. You will need liability coverage to pay for damages and injuries you may cause to others. It is also a good idea to have collision coverage to help pay for repairs to your own vehicle if you are at fault in an accident. Additionally, consider adding comprehensive coverage to protect against theft, vandalism, and other non-crash incidents. Make sure to shop around and compare rates to find the best coverage for your needs and budget.

How can I find the most affordable car insurance as a driver under 25 without sacrificing coverage?

To find affordable car insurance as a driver under 25 without sacrificing coverage, you can start by comparing quotes from different insurance companies. Look for discounts for young drivers, such as good student discounts or driver training discounts. Consider choosing a higher deductible to lower your premium. It’s also a good idea to maintain a clean driving record to qualify for lower rates. Additionally, you can explore usage-based insurance policies that offer discounts based on your driving habits. By shopping around and exploring different options, you can find the most affordable car insurance that still provides good coverage.

What is the best car insurance company for a driver under 25?

The best car insurance company for a driver under 25 may vary depending on different factors like driving record, location, and type of vehicle. Some top companies that offer good rates for young drivers include Geico, State Farm, and Progressive, but the best company will be different for every driver. It’s important to compare quotes from different companies to find the best deal that fits your specific needs. Remember to also consider factors like customer service and coverage options when choosing a car insurance provider.

Will my car insurance go down when I turn 25?

Car insurance rates typically decrease dramatically when you turn 25, and then they start to level out. However, if you maintain a clean driving record your rates may continue to go down at a less dramatic rate every year or son. Usually drivers in their 50s enjoy the lowest rates. At 25, you are considered more mature and experienced, so insurance companies may offer you lower rates. However, many factors affect the cost of car insurance, like driving record, type of car, and location. Remember to keep a clean driving record and drive safely to help keep your insurance costs down.

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Methodology

Rate Retriever rates are based on public rate filings obtained by analytics company First Interpreter. This data comes from the rating plans insurance carriers submit to each state’s department of insurance. Rating plans detail how each carrier calculates premiums using factors such as location, age, gender, and driving record, and they ensure that insurance premiums are both fair and competitive.  

For the data on this page, we made the following assumptions: a single male with a clean driving record and Good credit score, driving a 2023 RAV4. We adjusted this profile by age to determine the rates you see on this page. 

These rates are not actual quotes and should be used only for comparative purposes. Your rates can vary significantly based on your unique driver profile. 

About Rate Retriever

At Rate Retriever, our mission is to make the way you shop for insurance transparent and fair through user-friendly tools that respect your privacy and deliver reliable, comprehensive results 

So we took everything we hated about comparing insurance quotes online – the spam, the long questionnaires, the limited choices, the inaccuracy of quote prices – and threw it out the window, favoring a short form that more accurately estimates what you’ll pay at each of the top insurance providers near you. 

Rate Retriever is an independent company that is not owned by an insurance provider, nor do we provide insurance ourselves. This independence allows us to be your free and impartial insurance research tool, helping you make the best decisions for your insurance needs.  

We may earn a commission when you click one of the links or call one of the providers listed on our site; however, we do not allow our partnerships to influence which information we provide.