How Much Is Car Insurance for a 25-Year-Old 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 byLukas Velunta
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Updated: May 20, 2024

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For 25-year-olds, the average annual cost of car insurance is about $1,555 for full coverage and $360 for a liability-only policy. These rates are significantly lower than what younger drivers pay but slightly higher than the $1,054 for full coverage and $489 for liability-only policies typical for 39–59-year-olds.

Turning 25 marks a transition away from being categorized as a young driver, leading to potentially lower premiums. Gender also becomes a less significant factor in determining insurance rates at this age.

Rating factors influencing car insurance rates for 25-year-olds include driving history, vehicle type and geographical location. Insurers also consider the frequency of vehicle use and the driver's credit history.

Key Takeaways

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The average annual cost of car insurance for 25-year-olds is around $1,555 for full coverage and $360 for liability-only. This marks a significant decrease in rates compared with younger drivers.

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GEICO and State Farm offer the most competitive rates for 25-year-olds. GEICO offers liability-only policy at $296/year and full coverage at $1,336/year while State Farm offers $327/year and $1,400/year, respectively.

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At 25, insurance rates become more favorable as insurers no longer view drivers as high-risk young drivers. Factors like a clean driving record and a good credit score play a crucial role in determining premiums at this age.

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These rates reflect the average cost of car insurance for 25-year-old teens as of 2024.

Average Cost of Car Insurance for 25-Year-Olds

At 25, the average annual cost of car insurance is:

  • For liability-only: $360 per year, $30 per month
  • For full coverage: $1,555 per year, $130 per month

Those 25-year-olds still in college or living away from home might prioritize affordability and opt for liability-only car insurance, especially if driving an older or less valuable car.

But for those who own a newer vehicle or travel frequently, investing in full coverage car insurance, which includes comprehensive and collision coverage, provides broader protection against a range of potential incidents.

State Minimum Liability OnlyAnnual Premium$360Monthly Premium$30
State Minimum Liability w/ Full Cov. w/$500 Ded.Annual Premium$1,409Monthly Premium$117
100/300/100 Full Cov. w/$1,000 Ded.Annual Premium$1,555Monthly Premium$130
300/500/300 Full Cov. w/$1,500 Ded.Annual Premium$1,705Monthly Premium$142

Average Cost of Car Insurance for 25-Year-Olds by Gender

At 25, the average cost of car insurance varies only slightly by gender:

  • For women: $1,430 per year, $120 per month
  • For men: $1,410 per year, $118 per month

Gender mostly affects high-risk drivers between the ages of 16 and 19. At 25, drivers will be rated mostly by coverage level, credit record and driving history. Michigan, California, Hawaii, Pennsylvania, North Carolina and Massachusetts prohibit using gender as a rating factor.

FemaleAnnual Premium$1,410Monthly Premium$118
MaleAnnual Premium$1,443Monthly Premium$120

Average Cost of Car Insurance for 25-Year-Olds by State

Louisiana and Florida are the most expensive states for 25-year-old drivers, with annual rates averaging around $3,113 and $2,592, respectively. In contrast, Idaho offers the cheapest rates, averaging just $844 per year.

Car insurance rates vary by state. Factors like local traffic density, accident rates and state insurance laws can cause significant variations in premiums. A state that requires higher levels of coverage is more expensive than a state that requires drivers to carry very minimal coverage.

Data filtered by:Results filtered by:
Gender:
Gender:Male
AlabamaIndividual Annual Premium$1,356Individual Monthly Premium$113
AlaskaIndividual Annual Premium$1,162Individual Monthly Premium$97
ArizonaIndividual Annual Premium$1,389Individual Monthly Premium$116
ArkansasIndividual Annual Premium$1,163Individual Monthly Premium$97
CaliforniaIndividual Annual Premium$1,864Individual Monthly Premium$155
ColoradoIndividual Annual Premium$1,526Individual Monthly Premium$127
ConnecticutIndividual Annual Premium$1,480Individual Monthly Premium$123
DelawareIndividual Annual Premium$1,429Individual Monthly Premium$119

How Much Does Car Insurance Go Down at 25?

Car insurance for a 25-year-old driver is typically cheaper than for younger drivers. Compared with that for a 16-year-old, it's about 56% cheaper.

By 25, drivers have more experience and are seen as less likely to be involved in accidents, leading to lower premiums. The early 20s are marked by higher rates due to inexperience and higher accident propensity, while rates in the late 20s stabilize as driving profiles mature and record improves.

How Much Car Insurance Goes Down at 25

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25-Year-Old Cost

$1,555
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16-Year-Old Cost

$3,567
56% cheaper.:$2,012 more

This is 129% more expensive.

Cheapest Car Insurance Companies for 25-Year-Olds

The cheapest car insurance companies for 25-year-olds are:

  • GEICO: $1,336 per year, $111 per month
  • State Farm: $1,400 per year, $117 per month

If you own your own car or live away from home, insurers will typically require you to buy your own insurance. If a 25-year-old is attending college away from home but their family home is their permanent residence, or if they live in the family home 52 weeks a year, they can remain on the family policy.

To keep costs low, shop around for quotes and review your policy regularly. As a 25-year-old with more experience on the road and a healthy credit score, the provider you started with might not be the cheapest for your current driver profile.
You're also allowed to switch car insurance companies in the middle of a policy if you find a better deal elsewhere.

Data filtered by:Results filtered by:
Coverage:
Coverage:100/300/100 Full Cov. w/$1,000 Ded.
GEICOIndividual Annual Premium$1,336Individual Monthly Premium$111
State FarmIndividual Annual Premium$1,400Individual Monthly Premium$117
AllstateIndividual Annual Premium$1,527Individual Monthly Premium$127
TravelersIndividual Annual Premium$1,533Individual Monthly Premium$128
NationwideIndividual Annual Premium$1,560Individual Monthly Premium$130
ProgressiveIndividual Annual Premium$1,612Individual Monthly Premium$134
FarmersIndividual Annual Premium$1,951Individual Monthly Premium$163

Cheapest Cars to Insure for 25-Year-Olds

The cheapest car models to insure for 25-year-olds under state minimum liability are:

  • MINI Cooper: $564 per year
  • Chevrolet Corvette: $567 per year
  • Subaru Forester: $612 per year

Car choice matters for insurance costs, because insurers consider factors like vehicle value, safety features and theft rates. High-value cars, lacking safety features or commonly stolen models, typically incur higher insurance premiums due to increased risk and potential claim costs.

While the list focuses on new models, you can also explore options for the cheapest used cars to insure for potential savings.

Data filtered by:Results filtered by:
Coverage:
Coverage:State Minimum
MINI CooperAnnual Premium$564
Chevrolet CorvetteAnnual Premium$567
Subaru ForesterAnnual Premium$612
MINI ElectricAnnual Premium$618
Subaru OutbackAnnual Premium$622
Mazda CX-5Annual Premium$630
Mercedes C-ClassAnnual Premium$639
Honda PilotAnnual Premium$645

How to Get Cheap 25-Year-Old Car Insurance

For drivers seeking the best cheap car insurance for 25-year-olds, shop around to compare rates and opt for higher deductibles.

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    Shop around

    Shop around for the best rates. At 25, drivers often see a drop in premiums. Compare quotes from multiple insurers to find the most competitive rate for your needs.

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    Opt for higher deductibles

    Opt for higher deductibles to lower your premiums. Choosing to pay more out-of-pocket in the event of a claim can significantly reduce your monthly insurance costs. Optional collision and comprehensive coverages are subject to separate deductibles, but liability coverages are not subject to deductibles.

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    Maintain a clean driving record

    Maintain a clean driving record. At 25, a good driving history can greatly influence your insurance rates, leading to more affordable premiums.

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    Bundle policies

    Bundle policies if you have multiple insurance needs, like home, renters or life insurance with your car insurance policy. Bundling can lead to substantial discounts, making overall insurance costs cheaper.

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    Review and update coverage

    Review and update coverage annually. Your insurance needs at 25 may differ from earlier years, so ensure your policy reflects your current situation and doesn't include unnecessary add-ons.

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    Take advantage of low mileage discounts

    Take advantage of low mileage discounts if you don't drive frequently. Insurers often offer reduced rates for drivers who clock fewer miles, as this lowers the risk of accidents.

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    Consider the vehicle type

    Consider the vehicle type you're insuring. Cars that are cheaper to repair or not frequently targeted for theft could lead to lower insurance premiums.

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    Improve your credit score

    A good credit history can positively impact your car insurance rates. Insurers don't use actual credit scores for rating, but they create a proprietary insurance-based credit score based on your credit history. Four states that prohibit insurers from using credit as a rating factor: California, Hawaii, Massachusetts and Michigan

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    Check for professional affiliations

    Check for professional affiliations. Some insurers offer discounts to members of certain organizations or professions, which can be a cost-saving avenue for 25-year-olds.

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MONEYGEEK EXPERT TIP

A good credit score ranges from 670 to 739, as defined by FICO. To secure lower car insurance rates, aim for a score within or above this range. Higher credit scores suggest financial reliability, often leading to more favorable insurance premiums.

FAQ About Car Insurance for 25-Year-Olds

Whether you're establishing your independence or a young professional evaluating options, we explore a variety of subjects to help you navigate the intricacies of car insurance for 25-year-olds.

How much does a 25-year-old spend on insurance?
Does car insurance really go down at 25?
How much is car insurance in New York for a 25-year-old?
How much is car insurance for a 25-year-old in Texas?

About Mark Fitzpatrick


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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.