Young Drivers: Affordable Car Insurance Guide

Everyone needs auto insurance, but young adults pay the highest rates until the age of 25. Learn how to find affordable auto insurance for young drivers.
Teenage boy behind wheel of his car

Most teens want to learn how to drive as soon as they’re able. For many, it’s the ultimate symbol of freedom. Unfortunately, car insurance for young drivers can be expensive.

Your age reflects a certain level of inexperience and risk. In short, most insurance providers see newer motorists as being far more prone to mistakes and potentially filing claims than those who have several years of driving under their belt. The older you are, the more time you’ve had behind the wheel. So, over time, your rates should improve so long as you keep your driving record clean.

In this article, we’ll explain what age range counts as being a young driver, as well as how it impacts auto insurance rates. You’ll also learn the best way to get coverage and lower your premium costs if you’re new to driving.

Coverage for Younger Drivers Costs More

Drivers under 25 years old pay more for auto insurance than most other age groups. The primary reason for this is that insurers see younger people as risky and inexperienced. They’re more likely to drive distracted or intoxicated, not wear their seat belt, and speed, among other risk factors.

New drivers also don’t often have any credit history or driving record, good or bad. So, insurers must use statistics on similarly aged drivers to decide how much to charge them. As seen by the higher rates for adolescents, the data isn’t always positive.

According to a 2020 report from the National Highway Traffic Safety Administration (NHTSA), about 189,250 drivers aged 15 to 20 suffered injuries in car crashes. Teenagers are at the highest risk of being in an accident. The Insurance Institute for Highway Safety (IIHS) reported that 16 to 19-year-olds have a crash rate almost 4 times higher than drivers over the age of 20.

Of youthful drivers, teenage boys face the highest rates. This is because teen boys are the most at risk of being involved in an accident. The NHTSA says that, in 2020, men had a crash involvement rate that was more than double that of women drivers.

How Much Teens and Young Drivers Pay

While young adults tend to have high rates, it’s hard to pin down a concrete number. Car insurance prices can vary depending on a range of important factors. What you pay will almost surely be different than another person, even if they’re the same age.

These are some of the most important rate factors:

  • Where you live
  • The type of car you drive
  • Driving record
  • Annual mileage
  • Gender

Each of the above, as well as some other variables, will affect your final premium. However, be aware that age is one of the most important deciders in how much you pay for auto coverage. In general, younger people pay more until they reach the age of 25, at which point their rates will begin to steadily drop.

How Younger Drivers Can Pay Lower Rates

While there’s not much you can do about your or your child’s age, you can still take some solid steps to lower your monthly rates. Some of them, including gathering certain discounts, can be rather easy. Others can be harder and require either patience or a few extra steps.

Be On Your Parents’ Policy

A great way for younger drivers to shield themselves from high rates is to be on their parents’ policy. This way, they get to use their parents’ larger driving record, which can mean lower rates for them. Children can remain on their parent or guardian’s insurance for as long as they live in the same household. Keep in mind, however, that adding a teen driver to your policy can often lead to some higher rates.

Discounts

Another good method to lower your rates is by qualifying for discounts. Each one you get will take a varying percentage off your premium. If qualify for several, your rates can go down by quite a bit.

Compare Insurers

One of the best ways to find lower car insurance prices is by comparing several companies. Some insurers may have better rates or discount opportunities than others. It can pay off to do some research on leading providers and their rates so you can find the best fit for you.

Luckily, we’ve already done some of the work for you in our article on the best companies for new drivers. We ranked the top auto insurers in terms of the value they provide to their youngest policyholders, including discounts and overall company ratings.

Increase Your Deductible

If you have your own policy, you can save money on auto insurance by raising your deductible amount. By doing this, you assume more financial risk and are less likely to cost your insurer money if you must make a claim.

Unfortunately, most teenagers are strapped for cash and can’t pay a high deductible. So, when buying your auto policy, be sure to only set yours at an amount you can afford in an emergency.

Own a Safe Vehicle

Many car insurers reward policyholders who own safe vehicles. Below is a small sample of modern vehicle safety discounts:

Most vehicles already have some of these safety features, especially if they’re a recent model year.

Your insurer should already know your car’s make and model, which means you could already have the discount. If you’re unsure, it’s never a bad idea to contact your agent.

Practice Good Habits

While the stereotype of young drivers is that they tend to be more reckless behind the wheel than their older counterparts, you or your child don’t have to fit that image. Practicing good habits both behind the wheel and in other parts of life can help drivers avoid costly tickets and accidents. Here are some ways you or your teen can do that:

  • Get good grades in school. The Insurance Information Institute (III) notes that teen drivers can save on auto coverage by maintaining a “B” average in school, often into college.
  • Limit night driving. Driving in the dark can be dangerous for everyone, but especially for inexperienced drivers. People are more prone to be under the influence or drowsy, and it can be hard to see, requiring extra attention behind the wheel. For this reason, limiting night driving can help keep adolescents out of trouble.
  • Try to avoid distractions. It can be tempting to check notifications on your phone or drive around with friends blasting music. But this can distract you while you drive and could lead to an accident. While not always possible, minimizing distractions can help stop danger in its tracks.
  • Don’t drink and drive. Driving under the influence is dangerous for both you and others. If caught, you can expect serious legal and financial consequences, including inflated auto insurance rates.
  • Pay your premium on time. This one seems obvious, but insurers like it when policyholders submit their payments on time. They like it even better when you pay early. Some will even reward customers with lower rates through a discount for paying in full.

Put Together Years of Safe Driving

The best defense against higher rates is safe driving. If you can put together a few years or more of safe driving, you may receive lower rates. Sometimes, this comes in the form of a safe driving discount. In other cases, your provider may simply lower your rates anyway because you’ve proven you’re not a risk to file lots of claims.

This strategy, of course, isn’t very promising for young motorists, especially since they’re typically on their parents’ policy. But it can be helpful for people on the upper end of the spectrum.

Frequently Asked Questions

How much does a young driver affect auto insurance rates?

Having a young driver on your policy can affect your rates. This is because they bring a certain level of risk to the table that insurers can’t look away from. For this reason, age is a key rate factor among insurers. The exact amount it can affect your rates will vary on several factors, such as discounts you may already have, where you live, the car you or your teen drive, and more.

Do teen boys pay more than girls for car insurance?

Young, teenage boys pay more for auto insurance than girls because they’re more at risk of getting into accidents. As was mentioned earlier in the article, data shows that boys aged 16 to 19 are more likely to be involved in an accident than girls. Insurers know this and set rates accordingly.

How can I decrease my car insurance prices as a younger driver?

Anyone at any age, including the young, can decrease their rates in several effective ways, including:

  • Getting discounts
  • Comparing rates and companies
  • Increasing their deductible
  • Owning a new or safe car
  • Practicing good habits
  • Having a clean driving record for a few years or more

What are the best car insurance companies for young drivers?

The best companies for young drivers are those that have the most discounts or savings opportunities, as well as good company rankings. According to our article on the subject, these are the top five insurers for new drivers:

  1. American Family
  2. Progressive
  3. Farmers
  4. State Farm
  5. Travelers
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