Cheapest Car Insurance for First-Time Drivers in 2023

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 when included on a family policy. 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 family policy versus purchasing standalone coverage, 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.

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. It's important to note that minor teens cannot legally purchase their own car insurance without written consent of a parent or guardian.

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 as they are rated high risk by auto insurers.

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.

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 if all other rating factors are equal.

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 and Oklahoma, as well as the District of Columbia

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 history. After turning 70, the average cost of car insurance will likely start climbing.

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 offered by regional insurers.

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 drivers over 70.

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 slightly 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.

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.

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 on average.

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.

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:

These are just some ways to get cheaper car insurance rates. Over time, as you maintain a clean record and work on your credit record, 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.

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.

MoneyGeek tackles your most common questions on securing the cheapest car insurance for first-time drivers.