The Best Cheap Car Insurance and Average Costs for 16-Year-Olds

Insuring a 16-year-old driver can be costly. Since teen drivers don’t have the benefit of experience for insurance companies to consider when setting rates, they are considered riskier to insure. There are strategies you can use to help save money and get the best car insurance for a 16-year-old driver.

The average price of car insurance for a teen driver will vary based on several factors, including location, car type and, depending on the company, the students’ grades. But there is one area where parents can score significant savings: Choosing to add a 16-year-old to a family plan, which is generally cheaper, as opposed to having the teen get an individual policy. Insuring a 16-year-old on an individual policy comes with an average increased cost of $1,947 per year.

There is a difference when it comes to gender for insuring new teen drivers. Typically, it costs more to insure a 16-year-old male driver than a female driver of the same age. That’s because male drivers have a higher accident rate and more insurance claims and are therefore more of a risk to insurance companies.

According to our findings, the gender difference results in an average cost of about 13% higher per year for a male driver. However, that difference decreases slightly as those comparable drivers neared 18.

For those who opt to add their teen driver to an existing family policy, the car insurance company you use can make a significant difference in the cost of car insurance. MoneyGeek found that among the cheapest car insurance companies for 16-year-old drivers, there’s still a 20% difference in average cost per year between the first-ranked and fifth-ranked companies.

While the cheapest average cost we found for adding a 16-year-old to a family policy is $3,146, it costs an average of $5,318 for an individual policy for the same-age driver. Just by adding a 16-year-old to a family policy, you can save an average of $2,172 annually.

The type of vehicle a teen driver uses is another significant factor in how much it will cost to add the teen to your policy. Expensive and high-performance cars, for example, will drive up rates. On the other hand, a less expensive, safer car can be an efficient cost cutter. If you’re looking to buy your 16-year-old driver a car, it’s a good idea to consider how the vehicle type may impact costs.

Although it can seem daunting when you’re shopping for car insurance for young drivers, there are proven strategies you can use to lower the costs and get the best automotive insurance for a 16-year-old. Opting to add one of these young drivers to a family policy is one solid option to consider, which can save an average of almost $500 per year, even if you go with the cheapest option for either type of policy.

No matter the driver, when you’re purchasing car insurance, comparing auto insurance rates can help you save. By reviewing your options, you’ll understand the different coverage types and costs to more easily pick the best cheap car insurance for a 16-year-old driver. The more quotes you can get, the better.

As with drivers of any age, ensuring your young driver keeps a clean driving record is a great way to keep car insurance costs down. Conversely, accidents and tickets will dramatically increase car insurance costs for your 16-year-old. It’s especially important to monitor your teen driver while they are in that 16–17 age range when crashes tend to be statistically more likely.

Many companies offer discounts to drivers for things like safety and loyalty. And the same goes for younger drivers. Look for options like good student discounts, which can help you reduce car insurance costs for young drivers who maintain a specified GPA or dean’s list status.

For example, Allstate, the cheapest company for teens added to a family policy, offers a few options for teens to qualify for a “smart student” discount. This discount requires teens to either be full-time students with good grades, attend school at least 100 miles from where the car is kept or complete the “teenSMART” driver education program. This would apply to drivers under 25 who are unmarried. Allstate also has a driving feedback program called “Drivewise,” which can help lower costs.

Defensive driving courses can also help these drivers save, both from discounts and because it helps reduce accident rates, which, over time, saves families money.

The amount of coverage you need will vary, but for those who are willing, decreasing those can decrease the cost of insurance companies. You’ll still have to adhere to your state’s minimum requirements, of course, but lowering the coverages can be a legitimate option for those looking to save.

For example, you may consider liability-only car insurance if you own inexpensive cars. It’s also important to be aware that by opting for this type of coverage, you won’t be covered for your own vehicular damage or personal injury costs. In the event of a crash, that could turn into an expensive problem if you don’t have cash on hand to replace or repair a wrecked car.

Vehicle type is an essential factor when it comes to car insurance costs. For example, something like a Camry — a four-door sedan that earned the top-safety pick from the Insurance Institute for Highway Safety — will be a cheaper option to insure than a muscle car that focuses on performance, like a Mustang.

Sports cars and expensive luxury cars, in general, will be more expensive, too.

Teen drivers tend to cost more to insure because they are, on the whole, more likely to get into accidents and have a reason to use their insurance.

The younger the driver, the more likely it is that they’ll be involved in a crash. According to data for police-reported crashes in 2014 to 2015, drivers aged 16–17 were involved in almost double the number of fatal crashes than 18- and 19-year-olds for every 100 million miles driven.

Teens are at a higher risk for accidents. And while there are fewer deaths per capita for teens than older drivers, there are more deaths per mile driven for those younger drivers.

Teens are a riskier bet when it comes to accidents, which can drive up the costs of car insurance. And while there are fewer deaths per capita for the teen-driver demographic, there are more deaths per miles driven. Limiting the number of miles your teens drive could both help cut costs and keep them safe.

Where you live will also impact your car insurance rates, not only because the local statistics can impact cost, but also because you may have more limited options. The average costs of car insurance for 16-year-old drivers in the U.S. ranged from $651 to $15,104 per year. On average, the cheapest states were Maine, Hawaii and Indiana, while the most expensive states were Michigan, Louisiana and New York.

Company rates will vary per state, too. For example, the cheapest car insurance companies for a 16-year-old driver ranged from $704 to $7,658 per year on average, depending on location and policy purchased.