Car insurance for young drivers can be expensive, often costing over $300 per month. Insurance companies see young drivers especially those under 25 as high-risk because they have less experience and are more likely to get into accidents. But the good news is, there are many proven ways to reduce your monthly premium.
In this guide, you’ll learn:
- Why car insurance is expensive for young drivers
- Average costs by age
- Top discounts and savings options
- Tips for parents to lower costs
- The best cars and coverage for young drivers
- Answers to common questions
Whether you are a teen driver or a parent, this guide can help you make smarter choices and save hundreds each year.
Why Is Car Insurance So Expensive for Young Drivers?
Car insurance companies use risk to decide prices. Young drivers are statistically more likely to:
- Get into accidents
- Drive recklessly
- Make claims
This makes insurers charge more to cover the higher risk.
According to the Insurance Institute for Highway Safety (IIHS), drivers under 20 are nearly 3 times more likely to be involved in a fatal crash than drivers over 30. Even if you drive safely, you are still grouped into this higher-risk category until you build experience.
Average Car Insurance Cost for Young Drivers
Here’s a breakdown of how much car insurance typically costs by age:
| Age | Monthly Cost | Yearly Cost |
| 16 | $450 – $700 | $5,400 – $8,400 |
| 17 | $400 – $650 | $4,800 – $7,800 |
| 18 | $350 – $600 | $4,200 – $7,200 |
| 19 | $300 – $500 | $3,600 – $6,000 |
| 20 | $250 – $450 | $3,000 – $5,400 |
| 21–24 | $180 – $350 | $2,160 – $4,200 |
Prices can vary based on location, driving history, type of vehicle, and whether the policy is individual or part of a parent’s plan.
How to Save Money on Car Insurance as a Young Driver
There are many ways to reduce your premium without reducing coverage. Below are the most effective:
1. Stay on a Parent’s Policy
This is often the cheapest option. Young drivers added to a parent’s existing policy can save up to 60 percent compared to getting their own.
Tip: Make sure the teen is listed as a secondary driver, especially if they don’t drive often.
2. Get Good Grades
Most insurers offer a good student discount of 10% to 25% for full-time students who maintain a B average (3.0 GPA) or higher.
You’ll need to submit:
- Recent report cards
- Proof of enrollment
- A letter from your school (sometimes)
3. Take a Defensive Driving Course
Completing an approved driver education or defensive driving course can qualify for a discount of 5% to 15%. It also builds safe driving skills.
Each state has different approved programs, so check with your insurer first.
4. Choose a Safe, Affordable Car
Avoid sports cars, luxury models, or vehicles with high theft rates. Insurance is cheaper for:
- Sedans
- Compact SUVs
- Used vehicles with good safety ratings
Top budget-friendly picks:
- Toyota Corolla
- Honda Civic
- Subaru Impreza
- Hyundai Elantra
- Ford Focus
5. Raise Your Deductible
If you can afford it, raising your deductible from $500 to $1,000 can lower your monthly cost. Just remember, this means paying more out-of-pocket if you file a claim.
6. Use a Telematics Program
Many insurers offer usage-based insurance (UBI) through a mobile app or plug-in device. These programs track your driving habits and offer savings for:
- Safe speed
- Smooth braking
- No phone use
- Driving at low-risk hours
Programs like:
- Drivewise by Allstate
- SmartRide by Nationwide
- Snapshot by Progressive
Can offer up to 30% savings.
7. Limit Driving Miles
If you don’t drive much, ask for a low-mileage discount or try pay-per-mile insurance like:
- Metromile
- Milewise by Allstate
Ideal for college students or remote workers.
8. Shop Around
Prices vary greatly by company. Compare quotes from at least 3 to 5 insurers. Use free tools (like Alias Insurance) to get the best deal quickly.
9. Ask for Multiple Discounts
Combine these discounts for even more savings:
- Multi-policy (home + auto)
- Student away at school
- Military discount
- Paperless billing
- Automatic payments
10. Avoid Tickets and Accidents
A clean driving record saves you the most over time. Even one ticket can raise rates by 20 to 30 percent. Drive carefully, especially during the first 3 years.
Coverage Types for Young Drivers
Most young drivers need more than just the minimum coverage. Here’s a basic explanation of what to consider:
| Coverage Type | What It Covers | Needed? |
| Liability | Damage you cause to others | Required |
| Collision | Damage to your own car in an accident | Yes, if car is newer |
| Comprehensive | Theft, weather, vandalism, etc. | Yes, if car is valuable |
| Medical Payments | Medical costs for you or passengers | Optional |
| Uninsured Motorist | If hit by someone without insurance | Highly Recommended |
Always balance coverage with the vehicle’s value and your ability to pay out-of-pocket for repairs.
Tips for Parents to Help Reduce Car Insurance Costs
If you’re a parent of a teen driver, here’s how to manage costs and risk:
A. Add Your Child to Your Policy
It’s almost always cheaper than getting them their own policy.
B. Set Driving Limits
Limit driving at night or in bad weather during the first year. Fewer miles can reduce premiums.
C. Install a Tracking App
Many insurers offer apps to track driving habits. It also helps parents coach safe driving.
D. Choose the Right Vehicle
Assign the teen to your safest, lowest-value car. Avoid making them primary driver on an expensive vehicle.
E. Build Responsibility
Teach your child to understand how driving affects finances. Let them share the cost of gas, maintenance, or insurance.
Compare Insurance Companies for Young Drivers
| Company | Best For | Telematics Option |
| Geico | Student discounts | DriveEasy |
| State Farm | Good driver programs | Drive Safe & Save |
| Progressive | Budget-friendly rates | Snapshot |
| Allstate | Family and teen bundles | Drivewise |
| Nationwide | Safe driving rewards | SmartRide |
Always check with each provider for state-specific discounts and eligibility.
Frequently Asked Questions
Add them to a parent’s policy, choose a safe car, and apply for student and telematics discounts.
Yes. Most insurers lower rates around age 25, especially if you have a clean driving record.
It’s cheaper but riskier. If the car is valuable or financed, full coverage is usually a better option.
It uses your driving habits to set your price. Safe drivers can earn big discounts.
If they live more than 100 miles from home and don’t take a car, many insurers offer a student away at school discount.
Final Thoughts
Car insurance for young drivers is high, but with smart strategies, you can bring the cost down. Start by staying on a parent’s plan, taking a defensive driving course, and comparing quotes. Safe driving and good grades pay off more than you think.
If you’re ready to find the best deals, Alias Insurance makes it simple to compare free quotes from top providers in minutes. Whether you’re a teen driver or a parent, our tools help you save time, money, and stress on your car insurance journey.
