If you’re just got your first car and are looking for car insurance for new drivers, you’ll likely find your premiums are higher than your friends and family pay. The best insurance for new drivers costs more than an established driver’s because car insurers consider new drivers who don’t have a track record as riskier to insure.
The challenge isn’t exclusive to newly-licensed teens and young adults — older drivers who just received a driver’s license may face similar high premiums. Read on to learn more about how much insurance costs for a new driver and tips on saving.
- What kind of insurance do you need for a new driver?
- How much is insurance for new drivers?
- Cheap car insurance for new drivers younger than 21
- Other ways to save on new driver’s insurance
- Best car insurance for new drivers by company
- Cheaper car insurance for first-time drivers older than 50
- Cheaper car insurance for new drivers
What kind of insurance do you need for a new driver?
States have their own auto insurance requirements. If you’re looking for the most affordable rates, the minimum amount of insurance you can have is required in your state to drive legally. This coverage is comprised of bodily injury liability and property damage liability insurance. It only pays for medical bills and damages you cause to others and their property. 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 and underinsured motorist coverage. Insurers will know what you need when you request a quote.
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. Therefore, you may want to add a couple of optional coverages if you have a newer car.
Collision insurance will cover damage to your car if you’re responsible for an accident and comprehensive insurance pays for damage from theft or extreme weather such as hail or flooding.
How much is insurance for new drivers?
If you recently got your driver’s license, expect to pay more for new driver insurance than friends and loved ones who’ve been licensed for years. Younger drivers under 25 and older drivers over 50 will see the highest premiums. To give you an idea, let’s look at a common scenario – a resident of a large city where it’s typical not to own and drive a car, but who decides it’s finally time to do so.
Here’s a table that gives you an idea of how much insurance for new drivers will cost. The driver profile used for the rates provided is a newly licensed vs. experienced male driver, age 30, living in New York City, driving a 2017 Honda Accord, insured for state minimum and full coverage, including optional comprehensive and collision coverage with a $500 deductible.
| Coverage | Rate newly licensed | Experienced driver rate | $ difference |
|---|---|---|---|
| State minimum | $3,392 | $1,134 | $2,258 |
| Full coverage | $4,752 | $2,638 | $2,114 |
Cheap car insurance for new drivers younger than 21
The cheapest way for teens and young drivers to find affordable insurance is by getting added to a parent’s auto insurance policy. Though the cost of the parental policy will increase, the amount your parents pay with you on their policy will still be lower than you having your own policy if you are younger than 21. The savings can be considerable.
To compare rates for teen drivers on their own to that of being added to a parent policy, and see rates by company and gender, visit our guides for insuring teen and young drivers here:
- How much is car insurance for a 16-year-old?
- How much is car insurance for a 17-year-old?
- How much is car insurance for an 18-year-old?
- How much is car insurance for a 19-year-old?
- How much is car insurance for 20-year-olds?
Other ways to save on new driver’s insurance
Car insurance companies use several factors to price your new driver insurance. Fortunately, you could do a few things to make adjustments and lower your premium. Here are ideas on how to get cheaper car insurance for first-time drivers.
Choose a higher deductible
A car 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. It’s a big chunk of change in case of an accident, but your odds of needing to file a claim will hopefully be low. You can always set money aside each month into an emergency savings account to cover your deductible, especially if your auto insurance premium’s savings are significant.
Work on your credit score
This may be surprising, but your credit score may affect the cost of your new driver’s car insurance. Nationwide claims up to 92% of car insurers price your auto insurance premium according to your credit score. A CarInsurance.com analysis of the worst states for drivers with bad credit found that drivers with bad credit pay an average of 71% more for coverage than those with good credit.
If you have a history of making late payments or are starting out and don’t have a credit history yet, consider improving your credit before shopping for car insurance.
Improving your credit takes time. If you can’t wait and need car insurance immediately, you can always ask your insurer to review your policy once your credit score improves. Some ways to improve your credit score quickly include:
- Ordering a free credit report and making sure the information listed is correct. Dispute any wrong or inaccurate information on your report to have it removed.
- Paying down (or paying off) your credit card debt
- Asking a parent or loved one to add you to their credit card account as an authorized user
- Opening a new credit card and making your payments on time each month. If you have poor credit or none, a secured credit card with a low limit could help you build your credit. Regardless of which option you choose, be careful not to overspend.
Complete a driver safety course
Newly-licensed young or senior drivers who complete a driver’s ed course could receive a good discount on new car insurance. Older drivers can take advantage of the American Association of Retired Persons’ (AARP) online defensive driving course geared towards drivers 50 or older. The self-guided course costs $22. Study at your pace, which could take four to eight hours. You’ll save money on your car insurance policy for several years once you’re done.
Younger drivers should inquire about defensive driving courses with the car insurer they’re interested in. For example, Geico refers clients to an online course through the National Safety Council or the American Safety Council for a discounted cost of $12.50. The small amount of time and money you’ll invest will pay off — a discount between 5% and 20% on your car insurance premiums is typical.
Bundle your insurance policies
Most car insurance companies offer a handful of discounts that can save you some money on your new driver insurance premium. A multi-policy discount helps you save money when you bundle your renter’s, homeowners’ or other policies with the same insurer. You could save between 5% and 25% across the board:
- 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 claims you’ll save 12% on average if you bundle car and renters insurance.
- State Farm gives family members who insure their cars a 20% discount.
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, drivers assistance and more)
Compare car insurance companies
Car insurers could give you wildly different prices on the same type of car insurance. To find the best insurance for new drivers, it’s best to visit several insurance company websites to get vehicle insurance quotes for comparison.
Best car insurance for new drivers by company
The best car insurance for new drivers can vary according to the individual and the insurance company. Some insurers are senior-friendly and others specialize in insuring younger drivers — the best car insurance for first-time drivers may depend on your age. In general, the following insurers are best for newly-licensed individuals:
Companies for best car insurance for new drivers under 25
An Insure.com survey reported that millennials found the following three companies to have some of the cheapest prices for younger drivers:
- CSAA Insurance Group — now known as AAA NCNU for residents of Northern California, Nevada and Utah
- The Auto Club Group — also AAA for other regions nationwide, younger drivers can take advantage of affinity (group) pricing
- USAA — for members of the military and their families
Cheaper car insurance for first-time drivers older than 50
Seniors should get quotes on car insurance for new drivers from the following companies:
- The Hartford — partners with the AARP to provide members affordable auto insurance for seniors
- USAA — veterans and retired military may receive some of the lowest car insurance quotes around
- Hagerty — provides classic car insurance for seniors who drive older, collector cars
Cheaper car insurance for new drivers
If you still can’t afford the best car insurance for first-time drivers available on the market, your state may be able to help. For example, low-income California residents that earn less than $31,900 if single and $65,500 for a family of four can apply for coverage through California’s Low-Cost Automobile Program.
A newly-licensed driver aged 19 to 24 can get coverage for $676 per year in Los Angeles County and $368 in San Bernardino — a good alternative for best car insurance for new drivers under 25.
