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Car insurance for young adults

Every young driver needs auto insurance, but it can be hard to know what the best car insurance is for young adults. The average young adult pays more than $2,000 each year for car insurance. 

However, you can find insurance coverage you need at a price you can afford – you just need to know where to look.

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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

Average cost of car insurance for young adults

Teenagers and young adults are typically considered a higher risk than older drivers with otherwise similar driver profiles. 16-year-old drivers pay the most for auto insurance, and rates steadily drop as you get older. Age is one of the most significant factors that insurance companies use to calculate their rates for young adults; however, other factors like where you live and the car you drive also impact rates. 

These are the average annual rates for young adults with a clean driving record:

  • 20-year-olds pay more than $3,000 each year for premium car insurance
  • 23-year-olds pay around $2,700 each year for premium car insurance
  • 25-year-olds pay around $2,200 each year for premium car insurance
Average car insurance rates for young adults

The price you pay for car insurance will be different depending on where you live, what kind of car you drive, and a few other personal factors like your driving record and credit score. The only way to know what you can expect to pay is to compare rates from multiple car insurance companies. 

Get estimated rates for you

Best car insurance for young adults

Shopping for the right car insurance can be challenging for any driver, but it can be especially daunting for young adults. With so many different companies and options available, it can be difficult to know where to start. One of the best ways to find cheap car insurance for young adults is by comparing rates from top insurance providers.

These are the rates at popular insurance companies that offer insurance in a large portion of the United States. Rates are based on a profile of a single  23-year-old male with Good credit.

Average annual rates for young adults at top insurance companies

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. 

Best car insurance for new drivers under 21

Teenage and 20-year-old drivers pay the most for auto insurance coverage out of any other age group due to their lack of driving experience. Fortunately, there are still plenty of affordable car insurance options available. Young drivers can find lower rates by asking their insurance company if they have teen driver discounts available.

Best car insurance for new drivers over 21

Once drivers reach the age of 21, car insurance costs decrease slightly. By age 25, drivers will see the most significant price reduction associated with their age. Finding affordable car insurance for young adults over 21 is easier than younger drivers, but it’s still worth asking about all available discounts from top insurance providers.  

Best car insurance for college students

Finding affordable car insurance for college students is a top priority for young adults. If you’re a college-aged student living at home, you have the option to get on a parent’s existing insurance policy. If you don’t live at home, ask about discounts on car insurance for college students to help reduce the price. 

For a deeper look into car insurance for young drivers, visit one of the guides below to see data, insights, and recommendations specific to the age you’re most interested in:

Life events that will impact car insurance rates for young adults

For young adults, life is full of changes. You may have just graduated from high school and started college or gotten your first job. Or you might be getting married, having a baby, or buying a house.  

As you navigate these new milestones, your car insurance rates may change, as many insurers consider life events when setting rates for young adults. When you experience a life event, it’s a great time to reevaluate your insurance policy and compare car insurance companies to see if you can get a better rate. 

Turning 25

Insurance premiums steadily decrease until age 25, at which you’ll see the most significant reduction in the price of auto insurance. At 25, you’re considered less of a risk in the eyes of insurance providers and therefore have more options for cheap car insurance. 

Getting married

Some of the top insurance companies will consider your marital status when calculating your premium rates. The companies that do usually set lower rates for married couples than single individuals. This means married couples can receive some of the best car insurance rates for young adults. 

Living with roommates

If you live with roommates, some insurance companies may require you to list your roommates on your policy if you share your car often. This can increase the cost of car insurance for young adults. 

Buying a new car

Buying a new car can increase or decrease your insurance rates depending on the vehicle’s year, make, and model.  

Brand new cars are typically more expensive to insure than used cars. Additionally, drivers often choose to get more or better coverage for their new or expensive-to-repair vehicles.  

However, buying a car with safety features like an anti-theft device or a rearview camera can decrease your insurance rate. This is especially important for young drivers with accidents on their driving record. 

Buying a house

When you buy a home, you have more assets to protect. Many homeowners choose to purchase a home insurance policy to protect their new investment. Some of the top insurance companies bundle home and auto insurance, which tends to save policyholders money on both policies. 

Completing higher education

Some insurance companies look at your education level when determining your rates. Completing a higher level of education shows you are responsible and considered less of a risk, leading to more affordable car insurance for young adults. 

Cheap car insurance for young adults

How to get affordable car insurance for young adults

Whether you’re a brand new 16-year-old driver or in your 20s looking for cheap car insurance for young adults, you have options. Here are a few steps you can take to get the best car insurance rates.  

1. Shop around and compare car insurance rates

To find affordable car insurance for young adults, shop around and compare rates from top auto insurance companies. There can be a big difference in rates from one company to the next, so it’s important to compare your options from three to five companies.  

Start today by finding the top insurance providers for your driver profile with Rate Retriever 

2. Ask about driver discounts

Some auto insurance companies offer discounts to help lower the cost of car insurance for young adults, such as: 

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20-29 year old drivers in college or a vocational program may qualify for discounts if they have at least a B average in their classes.

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20-29 year olds attending college at least 100 miles away from their home may be able to receive a discount on car insurance. 

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For families with teenagers and young adults, good student discounts can help lower the cost of your premiums if your student has good grades, has completed a Driver’s Education course, or goes to college out of state. 

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Some car insurance companies offer Safe Driver Discounts, also known as Good Driver Discounts. These discounts are based on a driver’s record and are typically granted when a driver doesn’t have significant at-fault accidents, claims, or points. Some car insurance companies also offer discounts to those who agree to use devices that report on their driving to prove their safe driving skills.

3. Make sure you have the coverage you need

Each state has auto insurance requirements for the type and amount of insurance every driver must carry to operate a vehicle legally. If you drive an older car on your own policy, you may consider choosing a state-minimum policy. This is only recommended if the value of the car is comparable to the deductible, or if you can afford any accident-related repairs out-of-pocket. 

It’s most important that you feel safe and confident on the road, and your policy meets your unique needs. 

4. Raise your deductible

When shopping for the best car insurance for young adults, you’ll come across two main terms: premium and deductible. Your premium is the amount you pay for your car insurance policy on a monthly, annual or bi-annual basis. Your deductible is the amount you’ll need to pay out-of-pocket for accident damages before your insurance covers the rest.  

As a general rule, the higher your deductible is, the lower your premium will be. This means when you choose a policy with a higher deductible, you’ll pay less for your insurance annually. However, you should only raise your deductible if you can afford to pay the higher deductible out-of-pocket in case of an accident. 

Car insurance FAQs for young adults

Do you need your own car insurance policy in your 20s?

It depends. If your permanent address is not your parents’ address, then yes, you need your own insurance policy in your 20s. If you don’t drive regularly, or if you live with your parents and drive their vehicle, then no, you don’t need your own insurance policy in your 20s.

How to get car insurance for a new driver over 21 years old?

To get car insurance for a new driver over 21 years old, you can start by comparing quotes from different insurance companies. You will need to provide personal information, like your age, driving history, and the type of car you drive. It’s important to shop around for the best coverage and rates that fit your needs and budget. Finally, choose a policy that meets your state’s requirements and offers adequate protection for you and your vehicle. You may find that your insurance premiums are higher, as insurance companies tend to charge more for people without a history of being insured. In this case, your rates should go down each year as you maintain a clean driving record and insurance history.

How does car insurance for young adults differ from other age groups?

Car insurance for young adults is often more expensive because they are considered higher risk drivers due to less driving experience. Young adults may be charged higher premiums, especially if they have been in accidents or received traffic citations. Insurance companies may offer discounts for good grades, completing driver’s education courses, or staying accident-free. It’s important for young adults to compare rates and shop around for the best insurance coverage that fits their needs and budget.

What factors affect the cost of car insurance for young adults?

There are several factors that affect the cost of car insurance for young adults, such as exact age, driving record, type of car, location, and credit score. Young adults typically pay more for car insurance because they are considered higher risk due to their lack of experience on the road. Additionally, driving violations or accidents can increase insurance rates. The type of car you drive, where you live, and your credit score can also impact the cost of insurance. It’s important for young adults to drive safely, maintain a clean driving record, and choose a car that is affordable to insure to help keep insurance costs down.

Are there any discounts available specifically for young adult drivers?

Some insurance companies offer discounts for young adult drivers, but it varies by each company. Some common discounts you may qualify for include good student discounts if you have a certain GPA, completing a driver’s education course, and safe driving or telematics discounts. Additionally, some companies offer lower rates for young adults who drive cars with safety features and without a history of accidents.

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.

Can I stay on my parents’ car insurance policy as a young adult?

It depends. If you don’t drive regularly, or if you live with your parents and drive their vehicle, then no, you don’t need your own insurance policy. However, if your permanent address is different than your parents’ address, then you may need your own policy. It’s important to check with your parents’ insurance provider to see if you qualify and what the specific rules are for staying on their policy.

What is the best car insurance for young adults?

The best car insurance for young adults varies depending on your state, vehicle, coverage needs, and driving record. Additionally, the company with the best car insurance for young adults with accidents on their record may differ from the most affordable choice for drivers with a clean record.

How to get cheap insurance for a young adult?

There are a few things young adults can do to get cheaper car insurance. One is to stay on their parent’s policy if they are eligible. Another is to shop around and compare rates from different companies. Lastly, practicing safe driving and taking advantage of available discounts is also a good idea.

What are the best car insurance deals for young adults?

It’s important to remember that the cheapest policy isn’t always the best deal when it comes to finding affordable car insurance for young adults. It’s important to read the fine print and make sure the coverage covers all your needs. In some cases, insurance companies will offer more coverage at a better or comparable rate to their most basic policy.

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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.