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

UPDATED: Aug 30, 2021

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Key Takeaways

  • Rates decrease significantly when a driver reaches 21 years of age
  • New drivers can find lower rates by joining their parents’ policy
  • Bundling discounts can help new drivers find affordable coverage

Car insurance quotes are higher for new drivers because they’re inexperienced and lack an auto insurance record. However, you can decrease rates by bundling discounts or policies. Discovering more about the best car insurance companies for new drivers will help you find affordable coverage.

Before looking into the best car insurance companies for new drivers, enter your ZIP code to find free auto insurance rates in your area.

Which car insurance companies for new drivers offer the most affordable rates?

The best car insurance rates for new drivers will always be higher than for experienced drivers. However, teenagers have the most expensive rates because they are riskier to insure.

The cheapest average rate for a 16-year-old male on his parents’ policy is from USAA and is $92 per month ($1,105/yr). The most expensive average rate for the same 16-year-old driver is $160 per month ($1,920/yr) from Allstate.

The best car insurance quotes for new drivers decrease as drivers age. The lowest average rates for an older new driver are $52/mo from GEICO. Similar to teenage rates, Allstate has the highest average rates for older new drivers at $94/mo.

Car insurance for new drivers over 21 is always going to be cheaper than for teenagers. Drivers between 20 and 21 see an average decrease in rates of about 20%, and rates continue to decrease as the driver ages.

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Why are car insurance rates higher for new drivers?

Various factors impact your auto insurance rates, including your driving record. Regardless of the driver’s age, car insurance for new drivers is always going to be higher because new drivers lack a driving and auto insurance record.

This makes new drivers riskier to insure because the insurance company doesn’t have a history to look back on to determine their risk.

Rates are also higher for young drivers than older drivers because young drivers are more likely to engage in distracting driving behaviors. They are also statistically more likely to get into an accident than an older driver.

Auto insurance companies use this information to determine that young drivers are riskier to insure and therefore charge new drivers higher rates.

How can you lower car insurance rates for new drivers?

There are various ways to lower your rates. Knowing how to find cheap rates will help you find the best car insurance for new drivers under 25.

Stay on Your Parents’ Auto Insurance Policy

Cheap car insurance for new drivers under 21 can be obtained by joining their parents’ policy. The parents’ insurance background, credit score, and driving history can lead to lower rates.

College students might also be able to stay on their parent’s policy if they’re not driving their own car while away at school.

Shop Around for Cheap Car Insurance Quotes for New Drivers

Auto insurance companies use slightly different rating factors when underwriting policies, resulting in varying rates. Your lifestyle or history might result in higher rates from one company but lower rates from another provider. Shopping around will help you find the lowest rates.

Choose a Moderately-Priced Vehicle

The value of a car is usually taken into consideration when determining auto insurance rates, especially for new drivers. Car insurance companies determine that drivers will go faster in high-performance cars, making them riskier. If you’re a new driver, it’s best to go with an older car.

Choose a High Deductible

The deductible is the amount you pay out of pocket when filing a claim. Higher deductibles usually mean lower rates because the auto insurance company has to pay less. Increasing your deductible will put you on the hook for more should an accident occur, but can also lower your rates.

Carry Minimum Liability Coverage

Each state has minimum coverage that every driver has to carry. The table below lists each state’s minimum coverage requirements.

Minimum Liability Car Insurance Requirements by State
StatesMinimum Liability Limit Requirements
District of Columbia25/50/10
New Hampshire25/50/25
New Jersey15/30/5
New Mexico25/50/10
New York25/50/10
North Carolina30/60/25
North Dakota25/50/25
Rhode Island25/50/25
South Carolina25/50/25
South Dakota25/50/25
West Virginia25/50/25
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The minimum coverage will usually only cover liability, so you’re responsible for your repair and medical bills. However, carrying this limited coverage will help you obtain affordable rates until you gain some driving experience.

Ask for Auto Insurance Discounts

Car insurance companies offer various discounts to customers. Drivers can save for installing safety features, safe driving, attending school, and being good students. Bundling these discounts helps new drivers decrease their auto insurance rates.

What discounts are available from the best car insurance companies for new drivers?

The best cheap car insurance companies for new drivers offer various discounts to customers. These discounts can have a significant impact on your monthly rates.

The following are some of the most common discounts offered by car insurance companies:

  • Multi-policy discounts: Insurance companies offer discounts for carrying multiple insurance policies with the same company. The most common combinations are home-and-auto and renters-and-auto plans.
  • Multi-car discount: Auto insurance companies usually offer discounts for insuring multiple cars with a single company. This discount is automatically applied to your policy when a second car is added.
  • Defensive driving discount: Defensive driving courses teach drivers how to drive safely. Customers who take one of these courses must present their insurance company with proof of attendance in the form of a receipt or transcript.

Ask about these discounts and more before you buy car insurance for new drivers to guarantee you’re getting the cheapest rates possible.

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How to Find the Best Car Insurance Companies for New Drivers

Auto insurance for new drivers is higher due to their lack of experience and insurance history. Combining discounts and carrying less coverage can help you save on your rates. Compare rates from the best auto insurance companies for new drivers in your area to find the most affordable coverage.

Now that you know about the best car insurance companies for new drivers, enter your ZIP code to get free auto insurance quotes in your area.