Rachael Brennan has been working in the insurance industry since 2006 when she began working as a licensed insurance representative for 21st Century Insurance, during which time she earned her Property and Casualty license in all 50 states. After several years she expanded her insurance expertise, earning her license in Health and AD&D insurance as well. She has worked for small health insuran...

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Chris Harrigan has an economic degree from Limestone College and an MBA from Clemson University. He previously managed auto insurance claims for Enterprise Rent-A-Car. Currently, he is using his business and insurance expertise to provide insurance data analysis and visualizations to enhance the user experience.

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Reviewed by Chris Harrigan
Former Auto Insurance Claims Manager Chris Harrigan

UPDATED: Apr 13, 2022

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Key takeaways...

  • The average price for teen car insurance is around $2,150 per year
  • Driving history is one of the biggest factors in what you will spend on car insurance
  • Insurance providers reward students with lower rates
  • In order to help prevent teenage accidents, most states have adopted the Graduated Driver Licensing, or GDL, program

The average price for teen car insurance is around $2,150 per year. Being that this is a national average, teen drivers can expect to pay anywhere from $1,200 to $4,850 for car insurance on an annual basis.

Compare this to the national average for all drivers, which is around $1,700 per year.

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Car insurance rates for teenagers are much higher than the national average for several reasons. Lack of experience is a big one, but there are other factors that go into it as well.

It is pretty much impossible to avoid paying high premiums when you are a driver between the ages of 15 and 25, but there are some things that you can do to keep them lower.

Factors for Car Insurance Rates

Car insurance rates are all across the board because there are so many factors involved in determining them.

If you were to compare two drivers of the same age and same gender, living in the same neighborhood, with the same type and year of car, more than likely the rates each would pay for car insurance would still be different.

Driving history is one of the biggest factors in what you will spend on car insurance. Your credit history is also a factor.

Add these factors to the type of vehicle you drive, where you live, what safety and anti-theft features on your car, your age, marital status, and gender, and you can see why insurance rates vary so much.

Car insurance providers determine rates based mostly on risk. The lower risk you are as a driver, the less you will pay. If you are considered to be a high-risk driver, expect to pay much more.

In fact, the Rocky Mountain Insurance Information Association states that, when you apply for car insurance, the provider places you into one of three categories.

The preferred category means that you are of low risk, the standard category means that you are of average risk, and non-standard means that you are high risk.

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Why are teenage drivers’ rates so high?

The CDC reports that teenage drivers who are ages 16 to 19 get into accidents and receive motor vehicle violations four times more often than drivers of other ages. Statistically, this automatically places teens in a higher risk group than other drivers.

Along with this, teenagers also don’t have much, if any, of a credit history.

Because this is one factor in determining their rates, premiums will remain higher until teenagers begin to build credit and prove that they are responsible in terms of their finances.

Teenage males have rates that are even higher because males tend to take more risks and are more aggressive drivers than females.

How can you find auto insurance for a teenage driver?

If you are a teenager who is looking for car insurance, the best way to find a car insurance company is to look to your parents.

The easier, and usually cheaper, way is to be added to your parents’ policy. Their policy premium will increase for sure, but often it will end up being less than if you were to get a policy on your own.

If your parents are already considered to be high-risk drivers, or if it is not possible to join their policy, you will have to look for a policy on your own. Most insurance companies will just require a driver’s license in order to apply for insurance.

There are many places to begin looking for car insurance. Since you are just starting out, it may be smarter to search for companies locally.

This way you can sit down with an agent or an insurance broker to get all of your questions answered and help you figure out the type and amount of insurance coverage you should get.

The Internet is another source you can use. You can contact individual insurance companies online or do an online search for a rate quote.

If this is the route you choose, feel free to use a resource such as Insure U Online, which is a great online source for auto insurance information.

Depending on the factors you bring to the table, finding a car insurance policy may be quite easy. Just expect to pay high premiums.

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What kind of insurance does your teen driver need?

Most states have a minimum car insurance requirement that consists of bodily injury liability and property damage liability insurance. Some states also require uninsured/underinsured motorist coverage and personal injury protection. While you’re not required to get collision coverage or comprehensive coverage, you’ll need to invest in these types of coverage if you want your insurance to cover damages to your teen’s vehicle in the event of an at-fault accident or other incident.

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What is the average cost of auto insurance?

Rates for car insurance can vary greatly depending on which state you reside in. Insurance rules and regulations change as well according to each state. Rates also change from year to year, depending on different factors.

New York tends to have the highest car insurance rate average compared to the national average.

For all drivers, the average rate falls around $2,700. Vermont and Iowa usually fall on the low end, around $900. States that fall in the middle include Colorado, Arizona, Maine, Hawaii, and Idaho.

Students and Rates

Your status as a student will affect how much you pay for car insurance. Insurance providers reward students with lower rates. Drivers who have dropped out of high school will usually pay more for their policy.

Drivers who go on to college will also see lower insurance rates compared to their peers in the workforce.

Having more school under your belt, such as graduate school, will garner you lower rates down the road as well.

How can you lower auto insurance costs for a teen driver?

Although you will pay higher rates as a teen driver, there are also ways that you can lower what you pay. Although going to school will help you, getting good grades will help you even more.

Many insurance companies will offer discounts to those students who do well in school. If you have a B average, or 3.0 GPA or better, you will usually be rewarded with up to a 25 percent discount on your premium.

The vehicle you drive will affect how much you pay. If you drive a sports car, also known as a high-performance vehicle, definitely expect to pay more.

Expect it also if you drive a luxury car that is expensive to fix or one that is a favorite for thieves to steal.

The top five vehicles that were stolen in 2011 were the 2000 Dodge Caravan, 1991 Toyota Camry, 2006 Ford Pickup, 1998 Honda Civic, and 1994 Honda Accord, according to the National Insurance Crime Bureau.

To help lower your insurance rates, choose a vehicle that does not land itself on the list of most-stolen cars.

You can also buy a car with certain features to combat theft or add them yourself. You can get warning devices such as alarms, brake pedal or steering wheel locks, tire deflators, VIN etching, or steering column collars.

Immobilizing devices also help prevent theft, such as fuse cut-offs, smart keys, kill switches, and starter disablers.

Choosing a car that is safe on the road will also help keep your payments lower. Safety devices include multiple airbags, traction control, anti-skid, and motion sensors. Some insurance providers will offer discounts for tracking devices like cameras and GPS.

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What is graduated driver licensing?


In order to help prevent teenage accidents, most states have adopted the Graduated Driver Licensing, or GDL, program.

The National Highway Traffic Safety Administration reports that crashes by teens have been reduced from 20 to 50 percent in states that use the GDL system.

There are three stages of the system. The first stage is for the learner’s permit, which states require teens to be 16 years of age in order to get.

During this time, they need to complete basic driver training, pass knowledge and vision tests, remain crash free and drive anywhere from 30 to 50 hours under parental supervision.

Stage Two involves a provisional, or intermediate, license and occurs after fulfilling Stage One requirements. Teen drivers must complete education training for advanced drivers and pass a road test.

An adult licensed driver must be in the car during night time, the driver is only allowed to have one passenger of teenage age during the first twelve months, and the teen needs to remain conviction and crash free for 12 consecutive months.

The third and last stage is full licensure. The recommended restriction is that each state makes it mandatory that the driver must be 18 before the night-time and passenger restrictions from Stage Two are lifted.

As with Stages One and Two, no alcohol is allowed while behind the wheel. Of course, you should never be drinking while driving, or even while a passenger in any vehicle.

Although most states have adopted this system, not all of them follow all of the components laid out by the program.

It is a start, however, to increase teen safety on the road. Some insurance companies may give you a discount if you put in more practice hours than are outlined by your state, or if you take a private safe driver class on top of what is required.

The hope is that systems such as GDL will cut down on accidents and fatal crashes. There is a chance that, if they continue to work, average rates for teen car insurance will begin to decrease as well.

Until then, do your best to be the safest driver you can be and do anything possible that will cut down on your rates.

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