CarInsurance.com Insights
- Premiums are often much higher for new drivers because they are statistically more likely to be involved in an accident and file a claim.
- New drivers pay almost 200% more for state minimum coverage than experienced drivers.
- Adding a teen to a parent’s policy is often much cheaper than getting a separate policy.
Getting your first set of wheels means receiving your first car insurance bill. Brace yourself: It’s likely to be much higher than you were anticipating. On average, new drivers pay 80% more for full coverage than more experienced drivers because carriers consider them riskier to insure.
Higher premiums aren’t exclusive to newly licensed teens and young adults; older adults who are new drivers may face similarly high premiums. Learn more about car insurance for new drivers, including the best options for young and older drivers, tips for saving and affordable car insurance companies.
Who counts as a new driver?
Insurance companies consider any newly licensed individual to be a new driver, regardless of age. Some examples of new drivers include:
- Teenagers who have just gotten their driver’s license
- Adults who are getting their license for the first time
- Immigrants and drivers who are newly licensed in the U.S.
What kind of insurance do new drivers need?
Each state has minimum coverage requirements for auto insurance. This means you must carry a certain amount of liability coverage to drive legally; the required amount varies by state. Liability insurance only covers damage and injuries you cause others. It does not apply to your own losses. What’s more, state minimum coverage requirements are often too low to cover the cost of a serious accident.
Here is a range showing variations among states:
- Bodily injury: $10,000 to $50,000 per person and $30,000 to $100,000 per accident
- Property damage: $5,000 to $25,000 per accident
Some states also require uninsured/underinsured motorist coverage and/or personal injury protection (PIP). Your agent or insurance company can answer questions regarding your state’s minimum requirements.
States only require minimal coverage to protect others in case of an accident — your vehicle isn’t insured against damage or loss if you’re at fault. To protect your vehicle, you must carry full coverage insurance, which adds collision and comprehensive coverage to your policy.
Collision insurance will cover damage to your car if you strike another vehicle or stationary object. In contrast, comprehensive insurance pays for damage from theft, extreme weather, such as hail or flooding, and animal strikes. If you have a loan or lease on your vehicle, your financing agency will require that you carry full coverage and perhaps gap insurance also.
Average car insurance rates for new drivers
If you recently got your driver’s license, expect to pay more for coverage than drivers licensed for years. Drivers under 25 (particularly those aged 16 to 19) and drivers older than 50 typically pay the highest premiums, so it’s essential to understand what to expect before shopping.
When we ran the numbers, on average, new drivers pay 200% more for state minimum coverage and 80% more for a full coverage policy. The table below shows the average premium differences between a new driver and one with more experience.
| Coverage | Newly licensed driver rate | Experienced driver rate | Difference |
|---|---|---|---|
| State minimum | $3,392 | $1,134 | $2,258 |
| Full coverage | $4,752 | $2,638 | $2,114 |
UBI and telematics programs for first-time drivers
You may be a new driver, and your premiums may be higher than other drivers, but it doesn’t mean you can’t save money on your coverage. One way to do this is by enrolling in your insurer’s usage-based insurance (UBI) program.
These programs use a telematics device – an app on your phone or a device that plugs into your vehicle – to monitor your habits while you drive. Typically, this includes when and where you’re driving, how fast you’re traveling, phone use, and habits like tailgating, braking suddenly or accelerating too quickly. The safer you drive, the bigger your discount can be. Conversely, aggressive driving may result in your premium being increased.
- Allstate: TeenSmart is an eight-hour online program aims to reduce teen crashes. The program offers interactive training techniques, driving simulations, video and in-car exercises to decrease accident risk and provides a discount on their insurance policy.
- Farm Bureau: Drivers aged 25 or younger who complete the Young Driver Safety Program can qualify for the Safe Young Driver discount. The program aims to not only help lower premiums but encourage safer drivers.
- GEICO: DriveEasy tracks your driving time and behaviors via the GEICO mobile app — like how hard you brake, how fast you go around corners, and how often you use your phone — to create a safe driving score. The better the score, the more you save.
- Liberty Mutual: The Right Track program tracks you when driving through the Liberty Mutual app or plug-in device. You can save up to 30% on your insurance premiums based on your good driving behaviors. It considers your driving habits, such as acceleration, braking and nighttime driving, and provides tips and coaching to help you improve your driving behaviors.
- Nationwide: Smart Ride is a usage-based insurance program that provides you with personalized feedback to help you improve your driving habits. You can save up to 15% by signing up for the program and up to 40% based on your good driving behaviors.
- Progressive: Complete a defensive driving course and save on your premiums. Some of what will be reviewed includes dangerous situations, avoiding risks and keeping your stress low when driving, navigating weather, road conditions and more.
- State Farm: The Steer Clear safety program is designed for younger drivers under 25, although you can discuss this option with an agent as a new driver of any age, and will provide good driver discounts based on driving habits. You can also receive a premium discount if you have a young driver in your household.
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Why is car insurance expensive for new drivers?
“Car insurance for new drivers is more expensive than the cost of insurance for more experienced drivers. Because they’re ‘newbies’ behind the wheel, new drivers are considered a high risk by insurance companies,” says Andrew Femath, senior communications manager at USAA.
New drivers are more likely to get into accidents and make driving mistakes that can lead to claims. For example, data from the CDC shows that teens between the ages of 16 and 19 have more accidents than drivers in any other age group.
Insurance companies charge higher rates for new drivers to compensate for potential claims.
How to find the best car insurance for new drivers
It’s always a good idea to shop around for car insurance, but especially for new drivers. Comparing quotes can help you find the most affordable premium for your situation. Follow these steps to find the best car insurance for new drivers:
- Compare multiple quotes: Car insurance premiums are based on various personal and policy-related factors, like your age, gender, location, vehicle type and driving record. Insurance companies can also charge different rates for the same coverage. Aim to compare at least three car insurance quotes before you purchase a policy.
- Choose the correct coverage levels: Choosing the right coverage level is essential. Otherwise, you could overpay for coverage you don’t need. Consider how much coverage you need to meet your state’s legal requirements, and what optional coverages you might need. For example, most new drivers can benefit from having collision and comprehensive insurance. Many insurers also offer endorsements that can fill gaps in your basic policy, such as gap insurance, roadside assistance, rental reimbursement and new car replacement coverage. If you’re not sure how much coverage you need, you can use CarInsurance.com’s car insurance tools and calculators.
- Understand liability vs. full coverage: “New drivers need the same core coverages as experienced drivers, but the stakes are often higher due to their inexperience behind the wheel,” Femath says. As a newly licensed driver, it’s important to understand the differences between liability and full coverage insurance. Liability insurance only covers your financial responsibilities when you cause an accident. Full coverage includes liability insurance, plus collision and comprehensive insurance, which cover physical damage and theft.
Car insurance checklist for first-time policyholders
Before you hit the road, you’ll need auto insurance to drive legally. That means shopping around for a new car insurance policy, choosing the best fit, and making sure it’s activated before you start driving. Many car insurance companies allow you to get a free quote online and purchase coverage. However, some new drivers may find the process overwhelming.
The checklist below can help you buy your first car insurance policy.
- Identify what you need. While minimum-coverage liability insurance is all you need to start with, you should consider what happens if you get into an accident or someone vandalizes your vehicle. Do you have funds to help repair your vehicle or cover medical bills? If not, you may want to consider a more robust liability policy or a full coverage insurance policy. Also, consider your budget: what can you afford monthly or annually? This will help ensure you stay within parameters when selecting your policy.
- Get your details in order. There is specific information a car insurance agent will need from you, including your driver’s license, vehicle information number (VIN), the make, model and year of your vehicle, and how many miles a year you think you’re going to drive. These details help to create your driving profile, which will be a factor in determining your premium.
- Compare quotes. You can use an online insurance comparison tool to get a basic idea of how much you can expect to pay for coverage. However, it will require visiting an insurer’s website or calling a company representative or agent to get a more precise quote. Whatever method you prefer, remember to get quotes from at least three different carriers before choosing a policy, and make sure you’re comparing the same coverages and amounts.
- Read, compare, think. This is the most important step — reviewing the quotes you’ve received, checking company ratings, and choosing an insurer. Once you decide on a carrier, you must pay for your policy, ensure it’s active, and create an online account to manage it. An agent or company representative can help you with this.
- Congratulations! Once you’ve signed your documents and paid your first month’s premium, you’ve ready to hit the road. Keep your policy somewhere you can find it in a pinch, and always keep a copy of your insurance ID in your vehicle.
When do car insurance rates drop for new drivers?
When you’re just starting out as a driver, you have very limited experience navigating the rules of the road. Regardless of your age, if you have less than a year of behind-the-wheel experience, your premiums will be fairly pricey because car insurance companies see you as a higher-risk driver.
“Insurance rates for new drivers typically begin to decline after multiple years with a clean driving record,” Femath says.
But it also depends on your age. If you’re a teen driver, your rates will decrease significantly between the ages of 19 and 25. From there, and through most of your adulthood, your rates will decrease and stabilize until you are 75.
How new drivers can save on insurance
Car insurance companies consider several factors when pricing new driver insurance. Fortunately, you can do a few things to help keep your premium affordable. Here are a few tips on how to find cheap car insurance for first-time drivers.
Choose a higher deductible
A car insurance deductible is how much you’ll pay out of pocket before your insurer covers the rest of an accident or repair cost. A low deductible, such as $100 or $250, is easier on your budget if you’re in an accident, but you’ll pay far more each month for the convenience.
Aim for a higher deductible, such as $1,000, to lower your monthly premium. Choosing a deductible you can afford is important if you have to make a claim. It is a good idea to set money aside each month into an emergency savings account to cover your deductible.
Maintain a good credit score
In most states, your credit score will affect the cost of car insurance. Nationwide claims that up to 92% of car insurers price your auto insurance premium according to your credit score. If you have a history of making late payments or are just starting out and don’t have a credit history yet, consider improving your credit before shopping for car insurance.
Here’s how to improve your credit score:
- Order a free credit report and make sure the information listed is correct. Dispute any wrong or inaccurate information on your report to have it removed.
- Reduce or eliminate your credit card debt
- Ask a parent or loved one to add you to their credit card account as an authorized user to build up your credit score
- Open a new credit card and make your payments on time each month. If you have poor credit or none, a secured credit card with a low limit could help you rebuild your credit.
Complete a driver safety course
Many insurers offer a discount to drivers who take and pass a defensive driving course, regardless of age or how long you have been driving. Older drivers can take advantage of the AARP online defensive driving course for drivers 50 or older.
Check with your insurer to see if it offers this discount and to get a list of approved courses. For example, GEICO refers clients to an online course through the National Safety Council or the American Safety Council. Completing one of these courses will typically result in a discount between 5% and 20% on your car insurance premium.
Bundle your insurance policies
Most insurers offer a bundling discount, and the savings can be significant. A multi-policy discount helps lower your premium when you bundle your renters, homeowners or other policies with the same insurer. Savings can range between 5% and 25%:
- Erie’s multi-policy discount averages 16% to 25% when you insure your home and auto with the company.
- GEICO will give you 25% off your auto insurance policies when you have more than one vehicle insured through them.
- Progressive’s website says you’ll save 12% on average if you bundle car and renters insurance.
Look for other insurance discounts
Other typical types of new car insurance discounts you could take advantage of include:
- Auto-pay
- Prepaid annual premium
- Low-mileage
- Good student
- Senior
- Accident-free driving history
- Anti-theft
- Safety equipment (anti-lock brakes, multiple airbags, driver assistance and more)
Compare car insurance companies
Insurers rate risk differently, resulting in wildly different prices for the same type of car insurance. Shopping for coverage is the best way to find the most affordable policy, so visit several insurance company websites to get vehicle insurance quotes for comparison.
“Conducting regular policy reviews can also ensure that your coverage remains cost-effective as your driving history improves,” Femath says.
Tip
Buying your first policy? Don’t just go with the cheapest option. Look for the best balance of cost, coverage and service.
Common mistakes new drivers make
Newly licensed drivers typically purchase car insurance for the first time. They might not understand what car insurance covers, how much coverage they need or how they can save money.
Here are some common mistakes that new drivers often make, and how to avoid them:
- Not comparing quotes: Comparing car insurance quotes is valuable for all drivers, regardless of how long they’ve been licensed. Getting multiple personalized car insurance quotes is one of the best ways to find the most affordable policy. Don’t assume that the first quote you get will be the lowest price.
- Underinsuring to save money: Car insurance can be pricey for new drivers. Some people might be tempted to buy liability-only insurance — the cheapest policy you can get — to save money. However, full coverage insurance will provide much more financial protection if you get into an accident. Liability-only insurance doesn’t cover your losses, which means you would have to pay out of pocket to repair your car after a crash or other claim.
- Overlooking discounts: Most car insurance companies offer discounts that can reduce your auto insurance premium. When comparing car insurance policies, it’s important to research the discounts available. You can often find discounts for policy bundling, taking a defensive driving course, insuring a new vehicle, insuring a car with an anti-theft device and getting good grades in school.
- Not reading policy details: Every car insurance policy is different, and there are always exclusions. Before you buy a car insurance policy, make sure you read the fine print. Understand what is and isn’t covered, and how much coverage you have for each policy type. Reviewing the policy details can help you avoid surprises if you need to file a claim.
Final thoughts on car insurance for new drivers
While car insurance for a new driver will always cost more than for more experienced drivers, there are ways to keep your premium affordable. Shopping your coverage regularly, improving your credit score, keeping your driving record clean, and taking advantage of discounts are all great ways to lower your premium.
Frequently asked questions
What is the cheapest car insurance for new drivers?
The cheapest car insurance available for new drivers is state minimum liability insurance. There isn’t a single cheapest car insurance company for all new drivers. Premiums depend on many factors like location, age, credit score and vehicle type.
Is it better to stay on a parent’s policy?
It’s cheaper for teens to stay insured on a parent’s policy rather than getting their own policy.
“On average, adding a teen driver to your car insurance policy can raise rates by approximately $1,400 a year. And while this isn’t an insignificant amount, putting your teenage driver on a separate policy could cost substantially more,” says Femath.
However, keep in mind that young drivers can only stay insured on a parent’s policy when they’re living at home. If you move out and keep your vehicle at a different address, you’ll likely need to purchase your own policy.
Do all insurers cover new drivers?
All insurance companies should cover new drivers, as long as they’re properly licensed. However, some insurers may not underwrite policies for new drivers with a history of certain traffic violations, like DUIs or multiple at-fault accidents.
How can young drivers lower their rates?
There are many ways for young drivers to reduce their car insurance premiums. You can bundle your policies, take advantage of good student discounts, raise your deductibles, take a defensive driving course, pay your premium in full and compare quotes.
Resources & Methodology
Sources
- Cdc.gov.”Risk Factors for Teen Drivers.” Accessed August 2025.
- Nationwide.com.”How credit affects your car insurance premiums. Accessed August 2025.
Methodology
CarInsurance.com editors collected rates from Quadrant Information Services for a 40-year-old male and female driver carrying a full coverage insurance policy with limits 100/300/100 and $500 comprehensive and collision deductibles.
Read the detailed methodology for more information
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