Best Car Insurance for New Drivers
The best car insurance for new drivers varies based on factors like age, ZIP code, and credit score. We'll go over how new drivers can save money on their policies.
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UPDATED: Jun 20, 2022
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- New drivers include teens, older drivers who’ve never had a license, and immigrants
- Car insurance rates for new drivers are much higher due to a lack of experience
- New drivers can save on car insurance by shopping around, taking advantage of discounts, and adjusting coverage
Car insurance is expensive, but even more so for new drivers. Although you may think of teenagers when thinking about new drivers, other drivers, such as immigrants and older drivers who haven’t had a license, also see higher insurance for first-time drivers.
Car insurance for first-time drivers is more expensive since they lack the experience of drivers who’ve been behind the wheel longer. Therefore, they are more likely to be in accidents.
Fortunately, there are ways to find cheap car insurance for first-time drivers, such as taking advantage of discounts, staying on another driver’s insurance, and considering usage-based insurance to keep rates low.
Read on to find the best car insurance for new drivers and learn ways to lower rates.
Who is considered a new driver?
Not just teens see higher car insurance rates due to a lack of experience behind the wheel. Insurance companies consider these types of drivers as new:
- Older drivers who have never had a driver’s license
- Older drivers who have allowed their car insurance coverage to lapse
Teenagers are the most common type of new driver. In most states, teenagers can start their licensing process around age 16. Additionally, many states require driver’s ed before a teen gets their license.
However, car insurance rates for teens are the highest out there. Rates are high for a good reason. Teens lack driving experience and are more likely to be in a severe accident.
According to the Centers for Disease Control and Prevention (CDC), teen drivers are three times more likely to be in a fatal car crash. Speed and distracted driving are some of the most common reasons teens are in accidents.
Older drivers who never had a driver’s license or who allowed their insurance to lapse for a considerable amount of time also encounter rates that are higher than average.
Whether you’ve lived in a city and used public transportation or haven’t had a vehicle in a long time, auto insurance for older first-time drivers is more expensive than for drivers of the same age who have a substantial driving record.
Car insurance rates for immigrants can also be higher because they don’t have a driving record in the U.S. In many cases, an auto insurance company can’t or won’t verify a past driving history in another country. So, immigrants may be treated as new drivers when they first come to the U.S.
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Which car insurance company is best for new drivers?
Car insurance companies look at many different factors to determine your rates. Some of the most significant factors are your age, driving history, vehicle, ZIP code, and credit history.
Your driving record is the factor with the most significant impact on your rates. Your driving history indicates if you are a risky driver who is likely to cost the insurance company money.
Because new drivers have no driving history, the other factors play a significant role in calculating rates. For example, a new driver with a safe, inexpensive car and good credit score will pay less than a new driver with an expensive sports car and a bad credit score.
Age also plays a role in your car insurance rates. Older drivers tend to be less likely to take risks and are safer behind the wheel. Also, older drivers tend to be seen as more responsible and have other factors to help lower rates, such as a good credit score, and may pay less than younger new drivers.
The best insurance for a new driver depends on how the company views the factors that affect rates. For example, although one insurance company may not count your credit score against you, another one will.
For comparison, this table shows the average car insurance rates from top companies based on age.
Company Average Annual Rates Single 17-Year-Old Female Average Annual Rates Single 17-Year-Old Male Average Annual Rates Single 25-Year-Old Female Average Annual Rates Single 25-Year-Old Male Average Annual Rates Married 35-Year-Old Female Average Annual Rates Married 35-Year-Old Male Average Annual Rates Married 60-Year-Old Female Average Annual Rates Married 60-Year-Old Male
Allstate $9,282.19 $10,642.53 $3,424.87 $3,570.93 $3,156.09 $3,123.01 $2,913.37 $2,990.64
American Family $5,996.50 $8,130.50 $2,288.65 $2,694.72 $2,202.70 $2,224.31 $1,992.92 $2,014.38
Farmers $8,521.97 $9,144.04 $2,946.80 $3,041.44 $2,556.98 $2,557.75 $2,336.80 $2,448.39
GEICO $5,653.55 $6,278.96 $2,378.89 $2,262.87 $2,302.89 $2,312.38 $2,240.60 $2,283.45
Liberty Mutual $11,621.01 $13,718.69 $3,959.67 $4,503.13 $3,802.77 $3,856.84 $3,445.00 $3,680.53
Nationwide $5,756.37 $7,175.31 $2,686.48 $2,889.04 $2,360.49 $2,387.43 $2,130.26 $2,214.62
Progressive $8,689.95 $9,625.49 $2,697.73 $2,758.66 $2,296.90 $2,175.27 $1,991.49 $2,048.63
State Farm $5,953.88 $7,324.34 $2,335.96 $2,554.56 $2,081.72 $2,081.72 $1,873.89 $1,873.89
Travelers $9,307.32 $12,850.91 $2,325.25 $2,491.21 $2,178.66 $2,199.51 $2,051.98 $2,074.41
USAA $4,807.54 $5,385.61 $1,988.52 $2,126.14 $1,551.43 $1,540.32 $1,449.85 $1,448.98
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Teen drivers pay an average of $450 a month more than 25-year-old drivers. GEICO, Nationwide, and USAA offer the lowest rates to teen drivers. However, USAA only provides coverage to military members and their families.
Remember, car insurance isn’t one size fits all. Each insurance company looks at factors differently and offers different rates. New drivers of all ages face much higher insurance rates.
How can new drivers save money on car insurance?
Learning how to buy auto insurance for a new driver is very important. Fortunately, when looking for cheap insurance for a new driver, there are ways to get lower rates.
First, shop around. Each car insurance company weighs your personal factors differently and offers different rates. Compare rates from multiple companies to find your best deal.
Next, take advantage of car insurance discounts. Insurance companies offer various discounts based on everything from your policy to your vehicle. You can also get discounts based on you as the driver.
While you won’t get a continuous coverage discount as a new driver, you may qualify for multi-policy, vehicle safety features, and senior driver discounts. Other savings include good student, defensive driver, and occupational discounts.
Many insurance companies offer discounts for participating in their telematics program. These programs track driving behaviors and offer savings based on how you drive. Not only can you save money, but new drivers also get feedback to correct unsafe driving habits.
In addition, stay on a parent’s or family member’s car insurance policy. You’ll save money overall and qualify for additional discounts, such as a multicar discount.
Carefully consider your vehicle. New drivers in sports cars or other expensive vehicles have much higher car insurance rates. Consider a less expensive or safer car to keep rates low.
Finally, think about your insurance policy. Reduce coverage and increase deductibles to lower rates. While full coverage offers the most protection, it’s also the most expensive. Although you’ll pay more out of pocket in an accident, monthly rates are lower.
You may also find lower rates with usage-based coverage, especially if you don’t drive a lot. This type of insurance charges for each mile you drive, so rates are typically lower than traditional coverage.
Best Car Insurance for New Drivers: The Bottom Line
Many companies offer good insurance for new drivers, but rates vary based on several factors, including your age, vehicle, and credit score.
The best way for new drivers to find cheap car insurance is to shop around. Since every company offers different rates, compare multiple companies to find great coverage at the lowest price.
New drivers can find cheap insurance, and they can also save money on car insurance by taking advantage of discounts, staying on their parents’ policy, buying a less expensive vehicle, and adjusting their policy. Consider lowering coverage and raising deductibles for the most savings.
The good news is that your rates decrease as you age and gain driving experience. Once your driving record is established, your rates can decrease significantly.