How Much Is Car Insurance for 21-Year-Olds in 2024?


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ByMark Fitzpatrick
Reviewed byMark Friedlander
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ByMark Fitzpatrick
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Reviewed byMark Friedlander
Edited byCasie McCoskey
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Updated: May 20, 2024

Advertising & Editorial Disclosure

A 21-year-old driver typically pays around $365 annually for liability-only car insurance and $1,953 for full coverage under a family policy.

The main factors influencing car insurance costs for 21-year-olds include driving experience, the type of vehicle driven and the driver's location. Insurers generally view younger drivers as higher risk on the road, resulting in higher premiums.

While 21-year-olds can obtain their own insurance, many choose to stay on their families' policies to save substantially on costs.

Key Takeaways

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The average annual cost of car insurance for 21-year-olds on a family policy is $365 for liability-only and $1,953 for full coverage.

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Nationwide and GEICO are among the cheapest car insurance companies for 21-year-olds.

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21-year-olds can stay on their family's policy or seek discounts for cheaper coverage.

Why Trust MoneyGeek? We ensure that MoneyGeek's content meets our highest editorial standards by carefully scrutinizing it. Throughout each stage, our team writes, checks facts, edits and reviews the content produced to generate accurate information.

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These rates reflect the average cost of car insurance for 21-year-old drivers as of 2024.

Average Cost of Car Insurance for 21-Year-Olds by Coverage

The average cost of car insurance for a 21-year-old varies by coverage level:

  • Liability-only policy: $365 per year, $30 per month
  • Full coverage policy: $1,953 per year, $163 per month

Car insurance rates for young drivers under 25 are generally more expensive due to having less driving experience than older, more seasoned drivers.

State Minimum Liability OnlyFamily Policy Annual Premium$365Family Policy Monthly Premium$30
100/300/100 Full Cov. w/$1,000 Ded.Family Policy Annual Premium$1,953Family Policy Monthly Premium$163
300/500/300 Full Cov. w/$1,000 Ded.Family Policy Annual Premium$2,314Family Policy Monthly Premium$193

Average Cost of Car Insurance for 21-Year-Olds by Gender

At 21, gender significantly impacts typical car insurance costs. Average rates by gender at this age are:

  • Female drivers: $1,891 per year, $158 per month
  • Male drivers: $2,014 per year, $168 per month

Car insurance rates for young drivers, especially under 25, fluctuate considerably with age and gender, often resulting in higher premiums for younger male drivers due to actuarial data that shows that young male drivers cause more accidents and exhibit more risky behaviors while operating a vehicle than young female drivers.

Data filtered by:Results filtered by:
Coverage:
Coverage:100/300/100 Full Cov. w/$1,000 Ded.
MaleFamily Policy Annual Premium$2,014Family Policy Monthly Premium$168
FemaleFamily Policy Annual Premium$1,891Family Policy Monthly Premium$158

Average Cost of Car Insurance for 21-Year-Olds by State

Louisiana and Florida are the top two states with the most expensive car insurance rates, charging 21-year-old drivers average rates of $5,015 and $3,793 annually, respectively. On the other hand, Idaho stands out as the state with the cheapest average rates for this age group at $988 per year.

Your age and location strongly impact the cost of your car insurance. States with stricter minimum insurance requirements generally have higher rates. Additionally, insurers may charge more in areas with a higher frequency of weather-related incidents or elevated vehicle theft rates.

Data filtered by:Results filtered by:
Gender:
Gender:Male
AlabamaFamily Policy Annual Premium$1,810Family Policy Monthly Premium$151
AlaskaFamily Policy Annual Premium$1,843Family Policy Monthly Premium$154
ArizonaFamily Policy Annual Premium$1,827Family Policy Monthly Premium$152
ArkansasFamily Policy Annual Premium$1,480Family Policy Monthly Premium$123
CaliforniaFamily Policy Annual Premium$2,414Family Policy Monthly Premium$201
ColoradoFamily Policy Annual Premium$1,891Family Policy Monthly Premium$158
ConnecticutFamily Policy Annual Premium$1,841Family Policy Monthly Premium$153
DelawareFamily Policy Annual Premium$1,821Family Policy Monthly Premium$152

Why Car Insurance Is Expensive for 21-Year-Olds

Age significantly impacts car insurance rates. Young drivers, usually under 25, typically pay more due to their lack of driving experience and statistically higher risk of accidents.

As drivers grow older and gain experience, their risk lowers, leading to reduced insurance costs. Insurance rates often decrease markedly after the age of 25.

Contrary to popular belief, car insurance premiums can decrease after just one year of driving, assuming you haven't upgraded to a more expensive car or had a moving violation. However, it's after turning 25 that you typically exit the high-risk category for insurers, leading to more significant rate reductions.

DOES CAR INSURANCE GO DOWN AT 21?

Car insurance rates typically do not decrease significantly at 21. While there may be a minor reduction compared to teenage years, substantial decreases in premiums generally occur after age 25 when insurers no longer categorize these drivers as high-risk for age alone.

At 21, factors like driving history and vehicle type continue to play a crucial role in determining insurance costs.

Cheapest Car Insurance Companies for 21-Year-Olds

The cheapest car insurance companies for 21-year-old male drivers are:

  • Nationwide: $1,582 per year, $132 per month
  • GEICO: $1,745 per year, $145 per month

Until they reach 25, male drivers often pay more for car insurance than their female counterparts. However, they can still secure cheap car insurance by comparing offers.

Insurance companies have distinct pricing models, leading to varied rates for each policyholder. In some states like Hawaii and California, insurers are not allowed to base rates on age or gender, offering more equalized pricing options.

Data filtered by:Results filtered by:
Coverage:
Coverage:100/300/100 Full Cov. w/$1,000 Ded.
NationwideFamily Policy Annual Premium$1,582Family Policy Monthly Premium$132
GEICOFamily Policy Annual Premium$1,745Family Policy Monthly Premium$145
AllstateFamily Policy Annual Premium$1,915Family Policy Monthly Premium$160
TravelersFamily Policy Annual Premium$1,953Family Policy Monthly Premium$163
State FarmFamily Policy Annual Premium$2,061Family Policy Monthly Premium$172
ProgressiveFamily Policy Annual Premium$2,339Family Policy Monthly Premium$195
FarmersFamily Policy Annual Premium$2,446Family Policy Monthly Premium$204

Average Cost of Car Insurance for 21-Year-Olds in an Individual Policy vs. Family Policy

For 21-year-old drivers, getting car insurance through a family policy offers substantial financial benefits. The cost of an individual full coverage policy averages around $3,839 per year, whereas the same coverage under a family policy is much lower at $1,953 annually. 21-year-old students can stay on a family policy, even if they are away at college, as long as the family residence is their permanent address.

This substantial cost saving is a significant advantage. However, the downside is the potential impact on the family’s premium if the young driver has an accident or traffic violation.

Additionally, a family policy might limit the independence of the 21-year-old, as they are not the primary policyholder, potentially affecting future insurance creditability and personal premium rates.

Data filtered by:Results filtered by:
Coverage:
Coverage:100/300/100 Full Cov. w/$1,000 Ded.
$1,953Individual Premium$3,839Increase in Premium$1,886

What Affects the Cost of Car Insurance for 21-Year-Olds

Credit history, driving history and chosen coverage significantly impact car insurance costs for 21-year-olds.

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    Driving experience and history

    For 21-year-old drivers, limited driving experience can lead to higher premiums. A clean driving record, however, can mitigate this factor, signaling responsible driving behavior to insurers.

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    Type of vehicle

    The car a 21-year-old drives impacts insurance costs. High-performance or luxury vehicles generally result in higher premiums due to higher repair costs and increased theft risk.

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    Location

    Geographic location affects rates, with urban areas typically having higher premiums due to increased traffic and accident likelihood.

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    Gender

    Male drivers aged 21 often face higher premiums than females, reflecting statistical differences in driving risk and accident rates.

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    Coverage level

    Choosing higher coverage limits or additional options like collision and comprehensive insurance increases premiums but provides broader protection.

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    Deductible amounts

    Opting for higher deductibles can reduce the monthly premium cost. This means the driver will pay more out-of-pocket in an accident before insurance kicks in. Collision and comprehensive coverages are subject to separate deductibles, but liability coverage is not subject to a deductible.

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    Credit score

    In most states, a better credit history can lead to lower insurance rates, as insurers view a good credit record as indicative of responsible financial behavior.

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    Educational status

    Students with good academic records may qualify for discounts, as insurers often correlate good grades with responsible driving behavior. Many insurers also offer distant student discounts for students who are away at school without a car.

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    Insurance company

    Each insurer has unique underwriting methods for calculating premiums, meaning rates can vary significantly between companies. Shopping around helps you find the best deal.

How to Find Cheap Car Insurance for 21-Year-Olds

While car insurance for 21-year-olds can be pricey, you can effectively reduce costs by staying on a parent's policy, comparing quotes and opting for a practical, safe car.

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    Stay on a parent's policy

    Remaining on a parent's policy can be cheaper than having an individual policy, especially if the parent has a good driving record. 21-year-old students can remain on the family's policy as long as the family home is still their permanent address.

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    Compare quotes

    Shop around and compare quotes from multiple insurers to find the most competitive rates for 21-year-olds.

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    Choose a practical car

    Opt for a vehicle that's cheaper to insure, such as a used car with good safety ratings, rather than high-performance or luxury models.

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    Increase deductibles

    Consider raising your deductibles for collision and comprehensive coverages (liability coverage does not include a deductible), which can lower your premium, but ensure you can afford the out-of-pocket cost in case of a claim.

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    Maintain a clean driving record

    Avoiding accidents and traffic violations can help you qualify for lower rates due to reduced risk.

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    Use telematics programs

    If available, participate in your insurer's telematics program, which tracks driving behavior and can lead to discounts for safe driving. State Farm's Steer Clear telematics program, for example, is specifically designed for drivers under 25. However, keep in mind that some insurers could raise your rates if telematics tracks poor driving habits.

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    Seek out discounts

    Ask about discounts for good students, distant students, defensive driving courses or low mileage, which are often available for younger drivers.

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    Bundle policies

    If you have other insurance policies, such as renters' insurance, bundling them with the same provider can offer additional savings.

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    Review coverage needs

    Ensure you're not over-insuring by reassessing your coverage needs, but don't skimp on essential coverage for the sake of cost.

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    Build credit wisely

    Improve or maintain a good credit score, as insurers often use credit history to determine premiums.

Finding the Best Car Insurance Coverage for 21-Year-Olds

Secure mandatory liability coverage beyond minimums, opt for comprehensive coverage for newer cars and tailor deductibles to align with your budget and risk tolerance.

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    Mandatory liability coverage

    Ensure you have state minimum car insurance requirements, which most states require by law. It covers damage and injuries you may cause to others. Given the risk profiles of young drivers, consider opting for higher liability limits beyond state minimums.

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    Assess vehicle value and usage

    Comprehensive and collision coverage can be beneficial if you have a newer or higher-value car. These cover your vehicle in events like accidents or theft, especially if you park your car on the street.

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    Balance deductibles and premiums

    If budget constraints are a concern, a higher deductible can reduce your monthly premium. However, this means more out-of-pocket expenses in an accident — conversely, a lower deductible results in a higher premium but less financial burden during a claim.

FAQ About Car Insurance for 21-Year-Olds in 2024

How do you lower car insurance rates at 21?
What is the youngest age to get car insurance?
What’s the cheapest car insurance provider for a 21-year-old?
Which gender pays more for car insurance?
How does age affect the cost of car insurance?

About Mark Fitzpatrick


Mark Fitzpatrick headshot

Mark Fitzpatrick has analyzed the property and casualty insurance market for over five years, conducting original research and creating personalized content for every kind of buyer. Currently, he leads P&C insurance content production at MoneyGeek. Fitzpatrick has been quoted in several insurance-related publications, including CNBC, NBC News and Mashable.

Fitzpatrick earned a master’s degree in economics and international relations from Johns Hopkins University and a bachelor’s degree from Boston College. He is passionate about using his knowledge of economics and insurance to bring transparency around financial topics and help others feel confident in their money moves.


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