The Best and Cheapest Car Insurance for New Drivers (2022)

Whether you're a teen, young adult or someone in their 30s or older who is a new driver, MoneyGeek analyzed the cheapest options and the best companies that balance service and affordability. Generally, GEICO, Allstate or State Farm are the most affordable, but rates will vary greatly depending on your age and other factors.

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Last Updated: 4/27/2022
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Car insurance companies charge higher rates for new drivers because they have found young people and inexperienced drivers are more likely to get into an accident. But not all companies raise rates in the same way. MoneyGeek analyzed thousands of quotes to find out the cheapest options on average for different types of new drivers. For new drivers looking to balance affordability and service quality, we also made recommendations for the best insurance companies for new drivers.

While using these recommendations as a guide, your car insurance quote will be unique to you. For that reason, it’s important for new drivers to shop around and compare quotes from at least three companies to find the cheapest insurance.

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Key Takeaways

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Young drivers, immigrants and others without driving experience will pay more for car insurance than those with more time behind the wheel

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You can employ some simple strategies to save money on car insurance even as a new driver

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Compare quotes from at least three companies, as rates vary widely

Cheapest Car Insurance For New Drivers Under 25 Years Old

Insurance for new drivers in their 20s can be expensive, but MoneyGeek found drivers under 25 can find the most savings with GEICO. Across all ages from 21 to 25, it offered the cheapest rates on average.

If you're in your 20s and you've left your parents' home, car insurance can be expensive as you're still considered a new and experienced driver, but you can no longer be added to your parents' policy. Click on your age to learn more about the cheapest options for you.

Cheapest Companies for New Drivers - Under 25

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Ensure you are getting the best rate for your car insurance. Compare quotes from the top insurance companies.

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Cheapest Car Insurance For New Drivers Under 21-Years-Old

No drivers pay more for car insurance than new drivers under 21 years old, especially teens. The companies with the cheapest car insurance for teens and 20-year-olds are Allstate, GEICO and State Farm, depending on your age. It's best to shop around and find which is the cheapest for you, as rates won't change drastically year to year for drivers in their teens.

MoneyGeek analyzed rates for 16- to 18-year-olds for teens who were added to their parents' policy, rather than those who bought their own policy. Rates for 19- and 20-year-olds are for a new driver buying their own policy.

Cheapest Companies for New Drivers - Under 21

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  • Age
    Company
    Premium
  • Allstate
    $3,146
  • GEICO
    $2,823
  • GEICO
    $2,526
  • State Farm
    $2,462
  • Allstate
    $2,180
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Cheapest Car Insurance for Those New to Driving

For older adults with driving experience, average car insurance rates don't change much depending on your age. But new drivers still pay elevated rates for car insurance if they're inexperienced, regardless of age. MoneyGeek found that State Farm has the cheapest car insurance for first-time drivers, with average rates of $1,747 per year. The same driver with over 20 years of experience would only pay $1,207 per year.

If you're part of a military family, USAA is also an affordable option at $1,720 per year for new drivers.

MoneyGeek found that new drivers are charged an average of $1,327 more per year by insurers compared to those who have driving experience. Insurance companies still see teenagers as they riskiest drivers on the road. Even as a new driver with no driving experience, you’re still likely to be considered less of a risk than a teenager and will tend to pay lower rates than teenagers and drivers in their early 20s with a few years experience.

Cheapest Companies for New Adult Drivers - Annual Rates

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WHAT IF I'M NEW TO AN INSURANCE COMPANY BUT NOT TO DRIVING?

Another group that typically pays more for car insurance is drivers with a gap in insurance coverage. Insurance companies consider such drivers to be a higher risk because they assume that you were driving without insurance during that time. Drivers who have a lapse in insurance and then buy a new insurance policy will pay higher rates even if they're an experienced driver.

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Cheapest Car Insurance For Those New to the Country

Even if you have maintained a squeaky-clean driving record for years in another country, insurance companies in the United States will still consider foreign drivers as new drivers for insurance purposes. It makes sense: other countries may have different laws, different driving cultures, etc. Also, insurance companies only access domestic driving records, so you have a blank history when you start driving here. Your rates will be similar to those of any new driver.

If you are an undocumented immigrant, 11 states (plus the District of Columbia) will allow you to get a driver’s license:

If you live in one of these states, you should have no trouble finding car insurance once you have your license. If you’re not a resident of one of these states (or even if you are), you should apply for a Permanent Resident Card (green card). The United States Citizenship and Immigration Services (USCIS) has information on this process.

If you’re merely a visitor here, the easiest way to obtain temporary car insurance is through your car rental company, which will likely be cheaper as well.

When you go to take the driver’s test, you’ll need to bring identification with you, such as:

  • Passport
  • Foreign driver’s license
  • Birth certificate
  • Permanent resident card
  • Proof of residence (like a utility bill with your address on it)

Best Car Insurance for New Drivers

There is no single best car insurance company, but based on measures of affordability, customer satisfaction, financial stability and coverages, MoneyGeek ranks Allstate as the best provider for new drivers.

It's the cheapest company for 20- and 16-year-olds, and generally affordable for new drivers young and old while scoring high marks for customer satisfaction across the country.

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MoneyGeek Top Pick
Allstate

Allstate is an especially good option if you're a parent covering a new teen driver. You can add accident forgiveness to ensure that any mistakes on the road won't raise your rates. And if you have a new vehicle, add new car replacement coverage to ensure you're compensated in full if your car is totaled in an accident.

There are also ways to save with a new, young driver on the policy. You can get a distant student discount if a driver is attending school more than 100 miles from home, and students can get a discount on their rates for completing a teenSMART driver education program.

How Much Is Car Insurance for New Drivers?

There are different types of new drivers. Groups an insurance company will consider to be new drivers include:

  • Teenagers
  • Older drivers who have just gotten a driver’s license
  • Immigrants
  • People with a gap in insurance coverage

A 16-year-old with a new driver’s license and no driving experience will pay the highest rates — teens pay nearly 100% more than the average driver. However, if you have a gap in insurance coverage, insurance companies will consider you a high-risk driver. That’s why it’s important to keep your car insurance active if you can.

Anyone with limited driving experience will likely pay more for coverage. The average annual cost car insurance for a 16-year-old driver ranges from a low of $3,612 with State Farm to a high of $7,455 with Progressive. As you can see, shopping around can save you $3,843.

How to Find Cheaper Insurance as a New Driver

Here are some strategies you can employ to find cheap car insurance as a new driver.

Stay on the family policy

If you’re under 25, it’s cheaper to stay on your family policy, rather than to get an individual policy for car insurance. You might have to change insurance companies to get the best deal, but the savings can be significant.

Shop around

The Insurance Information Institute recommends getting quotes from at least three companies before you settle on one. Even if you’re adding a teen to your policy, it pays to get quotes from other companies. Insurance companies know most people don’t often think about their car insurance and your company may not be offering you the best rate. Get a quote from your current insurer, plus at least two other companies.

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Ensure you are getting the best rate for your car insurance. Compare quotes from the top insurance companies.

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Take advantage of discounts

Many insurance companies offer discounts, including:

  • Good student discount: These discounts are available at many different insurance companies, although they may vary in how they define a good student. Expect to provide proof of at least a B average.
  • Bundled discounts: If you buy your homeowners insurance and your car insurance from the same company, you can often earn a 10-15% discount.
  • Defensive driver discounts: Check with your insurance company before you choose a course, as some maintain a preapproved list of defensive driver courses. You can usually get an 8-10% discount for taking these classes, but even if you don’t get a discount, these courses can give you the skills you need to help prevent accidents. This makes them a good investment even if you don’t get a discount.
  • Paid-in-full: If you pay your premium all at once, this often gets you a 5-10% discount.
  • Low-mileage: If you don’t drive very much, you may be entitled to a low-mileage discount. The qualifying mileage varies from company to company. Some companies consider driving less than 7,500 a year low-mileage, and others will consider less than 15,000 miles eligible to earn a low-mileage discount.
  • Green/hybrid car discount: Driving a hybrid or electric vehicle can earn you a 10% discount.

Drive a less expensive car

Some cars are more expensive to insure than others. Luxury cars are expensive to own and expensive to repair and will require full coverage car insurance which will cost you more to insure. High-performance sports cars can raise your rates by hundreds of dollars per year, regardless of how old you are or where you live. A more practical car, such as a Toyota Camry, could be insured with liability car insurance will cost you less in insurance premiums.

Improve your credit score

Insurance companies use your credit score to determine rates because, according to Edmunds, people with higher credit scores get into fewer accidents and cost insurance companies less money. However, three states prohibit insurers from using credit scores to set premiums: Massachusetts, California and Hawaii. Consumers in every other state should pay bills on time and not abuse credit cards, which will increase their credit scores and lower their insurance rates.

Choose lower coverage amounts

Every state (except New Hampshire) requires a certain minimum amount of liability insurance. It will look something like this: 25/50/20.

  • 25 ($25,000): The maximum your insurance company will pay for injuries per person in an at-fault accident.
  • 50 ($50,000): Maximum amount the insurer will pay for injuries per vehicle.
  • 20 ($20,000): Maximum limit on property damage.

You’ll need at least your state’s minimum requirements, but you might want more.

Liability coverage doesn’t cover your car or your medical bills. In addition, if you cause an accident and hit a car containing four people, medical bills can quickly exceed the minimum amount of liability insurance required by your state. Those four people could sue you and you would have to pay for their medical bills out-of-pocket if you don’t have enough coverage, which can easily bankrupt many people. So, yes, you can pay for only the minimum amount of liability insurance, but it’s a risk.

Insurance Rates

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Ensure you are getting the best rate for your car insurance. Compare quotes from the top insurance companies.

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Methodology

MoneyGeek crunched numbers and compared rates for thousands of quotes from eight of the largest national auto insurance companies for drivers aged 16- to 25-years-old. We also compared the rates for a 40-year-old driver who has been licensed since their teenage years to a 40-year-old driver who is newly licensed.

To calculate the best car insurance companies, MoneyGeek weighted insurer affordability (30%) customer satisfaction (30%) claims satisfaction (30% and financial stability (10%) to create a composite score.

Read more about how MoneyGeek calculates rates on its car insurance methodology page.

FAQs About Car Insurance for New Drivers

Inexperienced drivers buying their first car insurance policy may have more questions than those who have been driving for years. MoneyGeek answers some of the most common queries.

Read More on Auto Insurance

About the Author


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Gail Kellner is a professional financial writer who specializes in life insurance, auto insurance and personal finance. She earned her Bachelor's degree in Psychology from Western Connecticut State University and her Master's of Science from Indiana State University. She loves combining her knowledge of psychology with her financial expertise so people can make better financial decisions.


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