Best Cheap Car Insurance for New Drivers

GEICO and National General are nearly tied as the cheapest insurers for new drivers nationally. Both average about $4,030 per year across ages 16 to 25.

National General's rates are the lowest but the company operates in a limited number of states. GEICO is available in all 50 states and is the cheapest option in 13 of them. Travelers ($4,354) ranks third nationally and often beats GEICO in states where both compete.

We gathered quotes for drivers ages 16 to 25 added to a parent's full coverage policy, with both male and female profiles across all 50 states and Washington, D.C.

Age is the single biggest factor in new driver insurance costs. A 16-year-old pays an average of $7,962 per year. By 25, that drops to $4,606, a 42% decrease.

Rates don't fall evenly year to year. The three biggest single-year drops happen at ages 21 ($475 decrease), 18 ($464 decrease) and 25 ($406 decrease). Insurers recalculate risk at these milestones as drivers move through their teens and early 20s.

The company you choose still matters more than your age. A 16-year-old with GEICO ($5,326 annually) pays less than the average 22-year-old across all insurers ($5,310 annually). A 25-year-old with Direct General ($9,389 annually) pays more than the average 16-year-old with most other companies.

Insurance rates vary by state as much as they do by company. A new driver in Washington pays $1,211 per year with the cheapest insurer. The same profile in Florida pays $5,339. That's a difference of more than $4,100, caused by state regulations, lawsuit costs and local accident rates.

GEICO is the cheapest in 13 states, concentrated in the South and along the East Coast. Travelers wins in 11 states because its rates drop faster for drivers in their early 20s. Shelter wins four states, all in the central U.S.

But don't assume the national cheapest is cheapest in your state. In Washington, PEMCO (a regional insurer) charges $1,211 per year. In New York, NYCM ($2,950) beats every national brand. In Georgia, COUNTRY Financial ($4,463) is the cheapest.

Rates don't stay high forever. From age 16 to 25, the average new driver's premium drops 42%, from $7,962 to $4,606 per year. But the pace of that decline varies by company.

Kemper's rates drop 54% from age 16 to 25, the largest decline among insurers we analyzed. National General (52%) and Travelers (50%) also cut rates in half over those nine years. GEICO's drop is a more modest 38% since its 16-year-old rate ($5,326) starts as the lowest.

Insurers define "new driver" more broadly than most people expect. You're a new driver if you:

• Just got your license for the first time, at any age
• Moved to the U.S. from another country without a domestic driving record
• Let your license lapse for several years and are starting fresh
• Were listed on someone else's policy and are buying your own for the first time

A 35-year-old immigrant with 10 years of driving experience abroad is a "new driver" by most U.S. insurers' standards. So is a 40-year-old who just passed their road test.

MoneyGeek's rate data covers drivers ages 16 to 25 on a parent's full coverage policy, the largest group of new drivers. If you're an older adult getting your first license, you won't pay the "young driver" surcharge, but a lack of driving history still raises your rates above what an experienced driver pays.

Adding a new driver to an existing policy is almost always cheaper than buying the teen their own. The average 16-year-old male pays $10,638 per year on a standalone policy. The same driver's effective share on a family plan is $3,403 per year, a 68% savings.

Some companies offer dramatic savings. Progressive charges $15,578 per year for a 16-year-old new driver policy but only adds about $2,704 to a family plan for the same driver, an 83% difference. Kemper follows this pattern: $17,824 standalone vs. $3,771 added to a family plan.

*New driver's share = family plan total minus what both parents would pay individually (the added cost of putting the teen on the family plan).

A separate policy makes sense in only a few cases:

• The new driver lives at a different address (a young driver away at college, for example)
• The main policyholder's driving record is poor enough that it raises the household rate
• The new driver owns the vehicle outright and needs to be the named insured

Most families should keep a new driver on the family policy and switch to a separate policy once the driver moves out or gets more driving experience.

New drivers have the same car insurance requirements as any other driver. Every state requires minimum liability coverage, and some states add requirements like personal injury protection (PIP) or uninsured motorist coverage. But minimums rarely provide enough financial protection after a serious accident.

A new driver with state minimum coverage in Alabama, for example, carries just $25,000 per person in bodily injury liability. One accident with medical bills above that amount leaves the driver, or their parents, responsible for the rest.

Most new drivers should carry full coverage, which adds collision and comprehensive to your state-required liability policy. Collision covers damage to your car from crashes. Comprehensive covers theft, weather, animal strikes and vandalism.

Drivers who move to the U.S. from another country often start with no domestic driving record. Even with years of experience abroad, most insurers can't verify international records and treat these drivers as high-risk.

A few strategies help:

• Get an international driving record translation. Some insurers accept history from countries with reciprocal agreements. Ask before you buy.
• Start on someone else's policy. If you live with a U.S. resident who has coverage, getting added to their policy builds domestic history faster.
• Try companies that work with international drivers. GEICO and Progressive accept foreign driving history more often than other insurers, based on policyholder reports.
• Build U.S. credit. In most states, your credit score affects your insurance rate. A secured credit card and on-time bill payments can lower premiums over six to 12 months.

After 1 to 2 years of clean driving in the U.S., you should qualify for standard rates. Shop around annually to make sure your insurer reflects your improved record.

The fastest way to lower your rate is to compare quotes from multiple companies. The gap between the cheapest and most expensive insurer exceeds $7,000 per year. New drivers can also stack discounts for good grades, defensive driving courses and bundled policies to cut premiums by 20% or more. Choosing the right car and adjusting your deductible and coverage settings save even more.

Comparing quotes is the most effective way to save. The cheapest insurer varies by state, age and driver profile. GEICO is the cheapest in 13 states, but Travelers, Shelter and dozens of regional companies win elsewhere.

A new driver in Florida saves thousands per year by choosing Travelers ($5,339) over a more expensive national brand. Get at least three quotes to find your best rate.

Most insurers offer a 5% to 15% discount for completing an approved course. For a driver paying $6,000 per year, that's $300 to $900 in annual savings. Check with your insurer before signing up to confirm the course qualifies.

Insurers reward academic performance with discounts of 5% to 25% off your premium. A B average or better (usually 3.0 GPA) qualifies at most companies. Your teen will need a transcript or report card. The discount usually applies until age 25.

Bundling auto and homeowners (or renters) insurance from the same company saves 5% to 20% at most insurers. If the parent already has home insurance with one company, adding the new driver to that same company's auto policy may be cheaper than splitting insurers.

The car matters. Sports cars, turbocharged engines and new-model-year vehicles all cost more to insure. Older sedans with good safety ratings and low theft rates get the best premiums. Check insurance costs before buying the car, not after.

Moving from a $500 deductible to a $1,000 deductible lowers comprehensive and collision premiums by 15% to 30%. The tradeoff: you pay more out of pocket after an accident. If you can cover a $1,000 repair without financial strain, the higher deductible saves money over time.

We answer common questions new drivers have about car insurance:

New drivers pay some of the highest insurance rates in the country. MoneyGeek analyzed more than 70 insurance companies nationwide, including national carriers, regional providers and local insurers across all U.S. residential areas, to find which ones offer new drivers affordable rates.