Key Takeaways
We looked at rates from six well-known insurance companies for all U.S. ZIP codes to find out which ones offer cheap car insurance for young drivers in their 20s. USAA has the best rates for young drivers. But keep in mind that USAA only sells its products to people who are in the service.
| Company | Avg. Annual Premium | Avg. Monthly Premium |
|---|---|---|
| USAA | $1,942 | $167 |
| Nationwide | $2,331 | $200 |
| State Farm | $2,529 | $216 |
| Farmers | $2,658 | $227 |
| Progressive | $2,828 | $241 |
| Allstate | $3,639 | $309 |
As mentioned, insurance rates for young people tend to go down once they are no longer teenagers. Insurance costs are still high for teens and young adults in their early 20s, but rates will drop significantly as they get closer to age 25.
Regarding insurance rates, where you live is an important issue. From our data, the table shows the five states where the insurance costs the least while being a young adult driver (ages 20 to 25).
| State | Avg. Annual Premium | Avg. Monthly Premium |
|---|---|---|
| North Carolina | $1,284 | $107 |
| Hawaii | $1,412 | $118 |
| Ohio | $1,732 | $144 |
| Idaho | $1,741 | $145 |
| Indiana | $1,812 | $151 |
Most of the time, there isn't a big price gap between young men and women. Young men only make about $15 more monthly than young women who drive.
| Gender | Avg. Annual Premium | Avg. Monthly Premium |
|---|---|---|
| Male | $2,379 | $204 |
| Female | $2,205 | $189 |
Car insurance in your 20s can be confusing, as teenagers and young adults often have to navigate both adult and parental worlds. Rates can change after significant events, so prepare for these changes.
Marriage and car insurance: When getting married, add your partner to your insurance policy to save $89 a year on your premiums. This also ensures they are driving without insurance, which can be beneficial if you need to switch cars or need their help when you're sick.
Living with a roommate: Car insurance companies have rules regarding roommates and shared vehicles. They may list them or exclude them. Insurance companies may assume shared cars due to shared responsibilities. If you exclude a driver, your insurance company won't cover claims while they drive.
Renting vs buying a home: Owning a home can lower car insurance rates due to discounts from the same company and insurance companies offering lower rates for homeowners, who are considered financially stable compared to renters.
Some savings on your car insurance may depend on whether you live with your parents or go to college full-time. Look at these possible ways to save money. Once you finish college, you won't be able to get discounts for good grades, but there are still ways to save money. Look at these possible savings for car insurance:
You can get better at driving by taking defensive driving training, but most insurance companies only give discounts to people over 50. Still, young drivers could benefit from learning how to drive safely, which can help them keep their records clean.
When you're in your 20s, car insurance will cost more than when you were a teen. Insurance companies consider young and new drivers a risk, charging them more than other drivers. You can still get around these higher rates in several ways.
Save money by shopping: People who qualify can save a lot on their car insurance by getting savings. Different companies offer different discounts. For example, if you never file a claim, pay your payment in full, or set up auto-pay, you may be able to save money. You may also get discounts if your car has certain safety features or anti-theft systems.
Coursework for defensive driving: Taking a defensive driving school will help you save money on your car insurance if you are younger than 25. After taking a safe driving class, a driver is less likely to get tickets or make a claim with their insurance company. This makes you look like a better customer for the insurance company, so they charge you less.
Do well in school: Your insurance company may give you a good student rate if you are under 25 and keep a "B" average. They will depend on the proof you give them. People in their 20s who get good grades and are careful drivers can save an average of $122 a year.
Group your insurance plans together: Use the same insurance company whether you own a house or rent an apartment. If you get your car, renters, and home insurance from the same company, you can save money on your auto insurance. It also keeps all of your bills with the same company.
The auto insurance rates published in this guide are based on the results of research completed by Way.com’s data team. Using a mix of public and internal data, we analyzed millions of rate averages across U.S. ZIP codes.
Quotes are typically based on a full coverage policy average unless otherwise noted within the content.
These rates were publicly sourced from insurer filings and should be used for comparative purposes only — your own quotes will differ. Given this, it’s important to go through our insurance steps form to find how much you can save with way.com
Way.com’s Insurance Broker Quote Data
USAA is the best insurance company for young adult drivers based on average insurance rates. Nationwide is another cheap choice if you can't get coverage through USAA.
Once drivers turn 25, their car insurance rates will drop if they don't get any tickets or other problems on their record. Teenagers pay the most for car insurance because they haven't driven much. As drivers gain more experience, the insurance company sees them as less of a risk and raises their rates.
When it's time to update your car insurance, shopping around is the best way to get the best deal. Another great way to get your rate lowered is to ask about deals. Different insurance companies offer various discounts. However, people qualified for typical discounts like accident-free, multi-policy, pay-in-full, electronic pay, or device discounts will likely find these options with multiple providers.
How you answer this question is mainly based on where you live. Staying on your parents' coverage is the right thing to do if you still live with them. Because your new address affects your insurance rates, getting your coverage as soon as you move is best. Many companies offer a Student Away From Home discount that can be used on your parents' insurance if you are away at college and don't drive much.
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