Cheapest Car Insurance for First-Time Drivers in 2023
Compare Rates and Save on Car Insurance
By, Content Director
On average, Nationwide provides the most cost-effective car insurance for first-time drivers aged 25 to 60. Meanwhile, State Farm tends to have the most budget-friendly options for young, first-time drivers. Although GEICO and Allstate also have competitive pricing, opting for Nationwide could lead to significant annual savings, no matter your age.
Being young and newly licensed places you in high-risk categories for insurance companies, leading to higher premiums. Factors like age, gender and driving experience can significantly influence these rates.
To find the most affordable option, consider joining an existing policy, especially if you're a first-time driver. Opting for a higher deductible or driving a less expensive car can also help lower your rates. Utilizing available discounts such as those for good students or completing a defensive driving course can further reduce your insurance costs.
Cheapest Car Insurance for First-Time Drivers
Nationwide offers the cheapest overall car insurance for first-time drivers over 25 years old.
Drivers under 25 usually face higher insurance premiums, while first-time drivers who are 25 or older will likely pay more than their experienced counterparts but less than younger drivers.
With a clean driving record, first-time drivers can expect their insurance rates to drop over time. Shop around each year to find the best rates.
Cheapest Car Insurance for First-Time Drivers Under 25
State Farm and GEICO offer the most affordable car insurance policies for first-time 16-year-old drivers on an average individual policy:
- State Farm: $2,300 per year, $192 per month
- GEICO: $2,492 per year, $208 per month
Being young and newly licensed impacts two categories that insurance companies consider when assessing risk: age and experience. As a result, you're likely to face higher premiums.
In addition to the number of years you've been driving, your age also plays a significant role in how much you pay for car insurance. Those new to driving, especially teenagers or young adults, typically find themselves at the higher end of the premium scale.
Cheapest Car Insurance for First-Time Drivers Under 25 by State
State Farm and Auto-Owners offer the cheapest average car insurance rates for drivers under 25 in most states.
State Farm has the lowest annual premiums in 23 states, including Alaska, Arkansas, Delaware, Hawaii, Idaho, Indiana, Iowa, South Dakota, Kansas and North Dakota. Meanwhile, Auto-Owners offers the lowest annual premiums in states like Arizona, Colorado, Georgia, Illinois, Minnesota, Nebraska and more.
Cheapest Car Insurance for First-Time Drivers Over 25
Nationwide and Allstate offer the cheapest average car insurance policies for first-time drivers over the age of 25.
- Nationwide: $2,440 per year, $203 per month
- Allstate: $2,941 per year, $245 per month
Gender can also play a role in determining car insurance rates for young drivers, with some insurers charging different rates for young males and females. However, it's worth noting that after age 25, the gap in insurance rates between genders generally narrows, leading to more consistent pricing regardless of gender.
Cheapest Car Insurance for First-Time Drivers Over 25 by State
Nationwide and Allstate offer the cheapest average car insurance for first-time drivers aged 25 and over in most states.
Nationwide offers the most affordable coverage in states like Kansas, Utah and Virginia. On the other hand, Allstate comes out as the cheapest option in states like Alabama, the District of Columbia and Oklahoma.
Cheapest Car Insurance for First-Time Drivers Over 40
The cheapest car insurance companies for first-time drivers over 40 are:
- Nationwide: $2,055 per year, $171 per month
- Allstate: $2,681 per year, $223 per month
In your 40s and 50s, car insurance costs typically decline if you keep a clean driving record and a healthy credit score. After turning 60, the average cost of car insurance will likely start climbing.
Cheapest Car Insurance for First-Time Drivers Over 40 by State
Nationwide leads the pack by offering the cheapest average car insurance rates in 10 states, including Kansas, North Carolina and Virginia. Close behind is Auto-Owners, which provides the most affordable rates in five states: Idaho, Illinois, Nebraska, Nevada and Pennsylvania.
Location significantly impacts car insurance rates due to state laws and local risks. Searching locally helps you find a policy tailored to your area, saving you money. Some insurers offer lower rates or special discounts in specific states, so local research can help lead you to your best and cheapest car insurance policies.
Don't just go for the big names you see on national TV — sometimes, the best deals are right in your backyard.
Cheapest Car Insurance for First-Time Drivers Over 60
Seniors driving for the first time can save on insurance with:
- Nationwide: $1,919 per year, $160 per month
- State Farm: $2,704 per year, $225 per month
Average car insurance rates generally decrease as drivers gain age and on-the-road experience. However, it's worth noting that rates tend to rise again for senior drivers.
According to the Centers for Disease Control and Prevention (CDC), older drivers are more at risk for fatal crashes based on miles driven, especially those over 75. This increased risk can lead to higher insurance premiums for seniors. So, while you may enjoy lower rates as you gain experience and age, be prepared for a potential uptick in costs as you enter your golden years.
Cheapest Car Insurance for First-Time Drivers Over 60 by State
For drivers over 60, Nationwide emerges as the go-to option for affordable car insurance, offering the cheapest rates in 14 states, including Alabama, Arkansas and Colorado. Auto-Owners follows closely, leading in affordability in five states, such as Idaho and Illinois.
These are average rates for a full coverage car insurance policy with 100/300/100 policy limits and a $1,000 deductible.
Senior drivers who aren't on the road as much could benefit from Nationwide's and Auto-Owners's usage-based insurance programs. These programs tailor your premium based on how much you actually drive. So, if you're driving less, you'll likely pay less, too.
How Driving Experience Influences Your Car Insurance
Your driving experience, which insurance companies measure by the years you've held a license, significantly influences your car insurance rates. Insurers often view drivers with more years of experience as lower-risk, leading to reduced premiums. On the other hand, less experienced drivers, including newly licensed ones, are generally considered riskier to insure and may face higher rates.
However, as inexperience can lead to higher rates, you can fortunately expect your premiums to decrease with each year of safe driving. Maintaining a spotless driving record over time signals to insurers that you're a lower-risk driver, which can result in more affordable coverage on average.
How First-Time Drivers Can Get Cheap Car Insurance
Shopping around, opting for a higher deductible and taking defensive driving courses are just a few ways you can work toward lowering your initial insurance costs. We explore these options and more below:
Compare at least three quotes
Different insurance companies have different ways of assessing risk. Some may offer special packages or discounts for first-time drivers. Take the time to get multiple quotes and compare your options.
Join an existing policy
Consider adding a more experienced driver, like a parent or housemate, to your policy if possible. This action can sometimes lower your rates, as multiple drivers share the risk.
Drive an inexpensive car
A used car with good safety features is often cheaper to insure than a brand-new sports car. Do your research and choose a vehicle that's both safe and affordable to insure.
Consider your coverage
When choosing your coverage, consider the age and condition of your car, as well as your budget and specific needs. For example, if you have a 10-year-old vehicle, liability-only insurance might be a cost-effective choice; adding collision or comprehensive coverage could lead to overpaying. Assess your budget, needs and your car's value to ensure you're not paying too much for coverage you don't need.
Raise your deductible
If you're buying collision or comprehensive insurance, a deductible is the out-of-pocket amount you pay before insurance covers the rest. Opting for a higher deductible can lower your premium. Just make sure you can afford to pay the deductible in case of an accident.
Complete a defensive driving course
Many insurers offer discounts for people who complete these courses. Not only do you become a safer driver, but you also become a more attractive candidate for lower rates.
Bundle your policies
Bundling multiple insurance policies, such as homeowners or renters insurance, with your car insurance can often lead to discounts on your premiums. Insurance companies offer these discounts as an incentive to manage multiple aspects of your coverage, making it a win-win for you and the insurer.
Keep your driving record clean
Since you're new to driving, your record is likely clean, which is a plus. Keep it that way. Avoid speeding, follow traffic rules and drive cautiously to maintain a clean record. This will set you up for lower rates in the future.
Stack insurance discounts
Stacking multiple discounts can make a significant difference in your premiums. You might be eligible for pay-in-full deals, safety vehicle feature discounts and affinity discounts through associations or employers. As you gain more driving experience and maintain a clean record, you'll likely become eligible for additional savings like safe driver discounts, claim-free discounts and loyalty discounts.
Learn more types of car insurance discounts for first-time drivers
These are just some ways to get cheaper car insurance rates. Over time, as you maintain a clean record and work on your credit score, you will gradually see your rates improve.
Other factors that affect your insurance rates include your state and age. You may pay way less than another newbie driver in another state — even if you’re the same age.
When to Add a First-Time Driver to Your Policy
Adding a newly licensed driver to an existing insurance policy is often the most affordable way to secure coverage. If a household member gets a learner's permit or becomes a licensed teen, your insurer will likely require you to add them to your policy.
You have a learner’s permit driver
If someone in your household has just received a learner's permit, contacting your insurance company to inquire about adding them to your policy is a good idea. Some insurers require permit holders to be listed on the policy, while others may only require it once the person becomes a fully licensed driver.
You have a teen driver
Once your teen passes their driving test and becomes a licensed driver, you should immediately add them to your car insurance policy. Teens are generally considered high-risk drivers, so expect your premiums to increase. However, you can look into discounts like good student discounts or safe driving programs to mitigate the cost.
You have a newly licensed housemate
If you have a recently licensed housemate who will be using your vehicle regularly, add them to your car insurance policy. Car insurance companies almost always require you to add household members, including housemates, to your insurance policy. If your housemate also has their own car, this could be a great time to inquire about a multi-car insurance policy for both vehicles. Contact your insurance provider to discuss the best way to include them on your policy, as each company has different rules and rates for additional drivers.
FAQ About the Cheapest Car Insurance for First-Time Drivers
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