MoneyGeek found that drivers will pay an average of $3,371 per year to add a 16-year-old to a family auto insurance policy. Read on to learn about the cheapest companies for young drivers that can help you save.
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.
How Much Does Car Insurance Cost for a 16-Year-Old?
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.
Annual Car Insurance Premium for a 16-Year-Old
Average Annual Premium$3,371
Average Annual Premium$5,318
This is 58% more expensive.
Cheapest Car Insurance for 16-Year-Old Males and Females
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.
Annual Car Insurance Rates for Males and Females
Average Annual Premium$3,160
Average Annual Premium$3,583
This is 13% more expensive.
Cheapest Car Insurance Companies for 16-Year-Old Drivers
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.
Cheapest Companies for 16-Year-Olds Added to Family Policy
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- CompanyAnnual Premium
- 3.State Farm$3,406
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.
Cheapest Companies for a 16-Year-Old's Individual Policy
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- CompanyAnnual Premium
- 1.State Farm$3,612
Car Choice Matters When Insuring a Young Driver
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.
Teen Car Insurance Rates by Vehicle Type
Average Annual Premium$3,371
Average Annual Premium$4,894
This is 45% more expensive.
Strategies to Save Money on Car Insurance for a 16-Year-Old
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.
Compare Quotes for the Best Policy for Your Family
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.
Monitor Your Teen Driver to Ensure a Clean Driving Record
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.
Find Companies That Offer Teen Discounts
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.
Lower the Coverage Amount
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.
Choose a Sedan Over a Sports 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.
Why Is Car Insurance So Expensive for a 16-Year-Old?
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.
Traffic Statistics for 16-Year-Old Drivers
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.
Accidents per 100 Millions 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.
States With the Highest Car Insurance Cost for a 16-Year-Old
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.
Top 10 Most Expensive States For 16-Year-Old Drivers
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- StateAnnual Premium
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.
Cheapest Car Insurance for Teens by State
Cheapest Car Insurance Company by State
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MoneyGeek collected data for young drivers in this age range to determine and contextualize the average cost of car insurance for 16-year-olds. MoneyGeek's methodology includes driving statistics from the AAA Foundation for Traffic Safety and the Insurance Institute for Highway Safety and the U.S. Department of Transportation Federal Highway Administration.
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About the Author
- AAA Foundation for Traffic Safety. "Rates of Motor Vehicle Crashes, Injuries and Deaths in Relation to Driver Age, United States, 2014-2015." Accessed August 13, 2020.
- Allstate. "Auto Insurance Discounts For Teen Drivers." Accessed August 13, 2020.
- Insurance Institute for Highway Safety. "Fatality Facts 2018: Teenagers." Accessed August 13, 2020.
- Nationwide. "What is auto liability insurance coverage?." Accessed August 13, 2020.
- U.S. Department of Transportation Federal Highway Administration. "Average Annual Miles per Driver by Age Group." Accessed August 13, 2020.