The Best and Cheapest Car Insurance for New Drivers (2023)

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.

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.

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:

• California
• Colorado
• Connecticut
• Hawaii
• Illinois
• Maryland
• New Mexico
• Nevada
• Utah
• Vermont
• Washington

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)

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

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.

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.

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 bundle your home and auto 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 rather than making no deposit monthly payments, you may be able to get 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.

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.

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.

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.

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.