Cheapest Car Insurance for New and First-Time Drivers
Car insurance is typically the most expensive for drivers under 25. This includes teenage drivers and adult drivers who have had a coverage gap or recently moved to the United States can also face high rates.
However, just because you fall into one of these driver categories doesn’t mean you should settle for high insurance rates. Car insurance premiums can vary wildly between insurance companies, and there are many ways to obtain discounts.
Our guide to the cheapest car insurance for new and first-time drivers contains everything you need to find affordable coverage.
Table of Contents
- How Much is Car Insurance for First-Time Drivers?
- Best Car Insurance for New Drivers
- Car Insurance Comparison Websites
- State Farm
- Erie Insurance
- How to Lower Your Car Insurance as a New Driver?
- Telematics Insurance
- Drive an Older Car
- Take a Defensive Driving Course
- Look for Student Discounts
- Multi-Policy Discounts
- Choose a Higher Deductible
- Have Lower Coverage Amounts
- Avoid Optional Coverages
- Compare Rates Every Year
- Pay In Full Discounts
- Maintain a Good Credit Score
- Is There Car Insurance for Foreigners in the USA?
- Final Thoughts
How Much is Car Insurance for First-Time Drivers?
The average 12-month premium for teen car insurance is from $2,200 to $3,900 when under a parent’s policy. These rates are approximately double the average car insurance cost for experienced drivers. A teen having a standalone policy can pay more than $5,000 per year.
According to The Zebra, older drivers (25 years or older) fare better when getting insurance for the first time, spending from $1,200 to $2,300 per year.
Several factors determine the car insurance costs for teens and new drivers, including:
- Age of driver
- Gender (males tend to have higher rates than females)
- Insured vehicle value
- State of residence
- Coverage amounts
- Do they have a standalone policy, or are they under their parents?
Best Car Insurance for New Drivers
The following car insurance providers offer the cheapest coverage for new and first-time drivers. Many are also included on our list of the best car insurance companies. Getting quotes from several will help to confirm that you’re paying the lowest rate.
Car Insurance Comparison Websites
An insurance comparison website significantly reduces your research time and compares various carriers.
For accurate quotes, submit the driver’s license numbers for each insured driver and the VIN for covered vehicles. If you already have insurance, you may be able to upload your policy for an apples-to-apples comparison.
You can compare rates for free and won’t pay a higher premium if you purchase coverage. Various car insurance marketplaces may share some overlapping partners, but most have a few exclusive partnerships.
Policygenius is one of our favorites, as they won’t sell your personal information. They can also bundle multiple products so that you can save even more without sacrificing coverage quality.
Get started with Policygenius.
USAA is the cheapest option for many households and is highly rated for customer satisfaction, but there’s a catch.
You must have one of the following backgrounds to be eligible for membership:
- U.S. military member or veteran
- Precommissioned officer
- Spouses or child of a servicemember (they don’t have to be a USAA member)
- Child of a USAA member
If you’re one of several generations to enjoy USAA membership, you can enjoy a family discount of up to 10% as a loyalty bonus.
You may also consider enrolling in the USAA SafePilot driving program for maximum savings. This service can save up to 30% if you practice safe driving habits.
SafePilot connects your smartphone to your vehicle and analyzes factors such as driving speed, braking, and phone usage.
With membership open to everyone, GEICO is a top contender in the affordability category.
Membership and employee discounts are available to over 500 organizations. The best values are for federal employees (12%) and military members (15%).
You can also find affinity discounts in these categories:
- Alumni organizations
- Berkshire Hathaway corporations
- Business and professional organizations
- Educational organizations
- Fraternities and sororities
- Recreational organizations
- University staff and teachers
Young drivers can be eligible for discounts after they complete a driver’s education course. In addition, all drivers taking a defensive driving course are eligible for savings.
If you prefer to go with a local insurance agent, State Farm offers competitive rates for new and first-time drivers.
You can find a local agent in many cities, including small towns. They’re great for hands-on service if you need to file a claim or adjust your coverage.
Noteworthy is the Good Grade Discount for teen drivers up to 25% through age 25. Most insurance companies offer similar good student discounts, but State Farm’s is exceptional.
Young drivers under 25 can qualify for the Steer Clear Discount after three years of no at-fault claims or moving violations.
New drivers can also install the Drive Safe & Save app to save up to 30% by practicing good driving habits.
First-time drivers can find affordable yet extensive coverage options through Travelers.
This insurance company offers discounts through several employers, credit unions, and associations to offer additional savings.
You can expect the standard array of first-time driver discounts, including:
- Driver training
- Good grades
- Attending a school over 100 miles away
- Safe driver discounts (3+ years of no claims or violations in the household)
There is also a hybrid and electric car discount available.
Progressive tends to be one of the more affordable companies in some markets. However, there are studies indicating they can be relatively expensive. Hence, it’s a great reminder to always compare rates from at least two providers to avoid overpaying.
One way Progressive offers competitive rates is through its continuous coverage discount. Progressive honors the time with your previous insurer. While new drivers won’t immediately qualify for this savings, parents adding a first-time to their policy can.
The following discounts are relatively easy to qualify for:
- Online quotes
- Signing the final policy online
- Paperless documents
- Automatic payments
- Paying the full 6-month term upfront
One frustration with comparing car insurance quotes is having to add coverage options and make adjustments to the limits and deductibles. The research process is time-consuming to determine how much insurance you can afford.
To save time, consider Progressive’s Name Your Price Tool. This search feature lets you submit your spending limit and lists available coverage within your price range.
It’s also possible to compare rates for similar coverage from other insurance platforms. You can compare rates after getting your initial auto insurance quote.
You may not get the lowest rates upfront with Allstate, although the final premium may be lower than you expect through various savings. The carrier applies vehicle-specific savings along with discounts for on-time payments and safe driving habits.
Drivers in approximately 20 states can save more through the Allstate Milewise pay-per-mile program. This coverage option can be cheaper if you only drive a short distance or don’t use your car several days per week.
Like other providers, there are several ways student drivers can receive discounts. For example, the Drivewise app claims to save safe drivers 40% or more while providing personalized insights to reduce the likelihood of getting in a wreck or committing a moving violation.
With Allstate, you work directly with an agent. Additionally, they have a complimentary Claim Satisfaction Guarantee that can refund you if you experience trouble filing a claim.
As a full-service insurance provider, it’s possible to have extensive coverage options for your auto and non-auto insurance needs for extra peace of mind.
There are various ways to save with Nationwide, one of the better-known insurance companies. First, enrolling in SmartRide ties your discount to your driving habits by connecting an intelligent app to your car.
Second, SmartMiles offers lower rates if you’re an infrequent driver and don’t drive enough to benefit from a traditional policy.
Along with multiple discount opportunities, the insurance premium quotes are relatively low for first-time drivers of any age. For example, 16-year-old teens and older adults with more life experience can qualify for great rates.
As a side note, five years of accident-free driving can yield further discounts, and drivers older than 55 can receive defensive driver course discounts.
An independent agent from Erie Insurance can provide several complimentary coverage options that other providers charge extra for:
- Auto glass repair
- Locksmith services
- Personal items
- Pet coverage
- Rental coverage
- Roadside assistance
If you’re leaning toward adding these optional coverages to your policy, it can be worth the time to pull a quote and compare it to similar places and cheaper basic alternatives.
This company has received positive customer satisfaction ratings for its operating regions. Unfortunately, membership is restricted to 13 states (all east of the Mississippi River) and the District of Columbia.
How to Lower Your Car Insurance as a New Driver?
While it’s a fact that new drivers of any age pay more than experienced drivers, several discounts can make insurance affordable. Here are several strategies you can implement to get cheaper insurance.
If you’re confident that your driving abilities classify you as a safe driver, you may consider using telematics in your car to qualify for additional discounts.
Many insurance companies offer a particular phone app and a car plugin that analyzes your driving patterns. The maximum discount is usually 30%, but it is lower if you repeatedly demonstrate unsafe habits.
Typically, the observation period is 90 days, and the discount applies to your next six-month coverage period.
You will receive the highest discount by observing these practices:
- Obeying the speed limit
- Soft and gradual braking
- Gentle acceleration
- Not using your phone while driving
- Drive shorter distances
- Avoid driving during dangerous times of day
High-tech insurance can reduce your rates by verifying that you qualify for low mileage discounts.
Drive an Older Car
Car insurance premiums are partially based on the vehicle value. So driving a reliable clunker that’s cheap enough only to need liability coverage will naturally cost less than a similar vehicle that’s several years newer.
Remember that waiving comprehensive and collision coverage means paying for at-fault vehicle damage. Therefore, you may also consider still having personal injury protection (PIP) and similar coverage to offset medical treatment costs for passengers in your car.
Take a Defensive Driving Course
Depending on the insurance company, you may be able to take a defensive driving course and receive a discount. You will need to take this class every few years to renew the discount, although the requirements differ by state and insurance provider.
This class is usually one full day and can be taken online or in person.
Look for Student Discounts
High school and college students usually qualify for a “good student discount” by maintaining a “B” average or higher. The average savings is from 10% to 15%.
College students leaving their car at home are eligible for an away-from-home discount when their school is at least 100 miles away. This discount prevents a coverage gap when students need to drive for an emergency or during weekend visits and holiday breaks.
Bundling homeowners insurance or renter’s insurance is an easy way to score car insurance savings. However, be sure the insurance provider doesn’t outsource some of these products to third parties, which may not offer the best prices or coverage.
Choose a Higher Deductible
A higher deductible increases out-of-pocket expenses for at-fault claims but reduces your 6-month or 12-month premium costs. For example, you may bump your premium from $500 to $1,000.
Have Lower Coverage Amounts
In addition to having a higher deductible, you can choose lower coverage limits. However, it’s usually a good idea to go a level or two higher than the state minimums (when you can afford the higher premium), as vehicle repairs and medical treatment can be surprisingly expensive.
Avoid Optional Coverages
While having a policy with all the bells and whistles can protect you in more situations, your monthly premium is higher. To save money, focus on the core coverages first, such as:
- Rideshare insurance (if you have a delivery app side job)
- Roadside assistance
- Uninsured motorists
However, you may decline optional coverages such as rental car reimbursement and gap insurance.
Compare Rates Every Year
Being a long-term customer can usually help you qualify for better discounts that require years to obtain. However, comparing rates between insurers yearly is not a bad idea, as loyalty doesn’t always guarantee the cheapest insurance.
Switching policies before your cancellation date may also help you qualify for special discounts when you change providers.
Pay In Full Discounts
Several insurance companies offer discounts if you pay the entire six-month coverage upfront. You may need at least $1,000 in savings to pay the bill, but it can be worth it if you have the cash. Otherwise, you can pay month-to-month and still enjoy constant coverage.
Consider pursuing a side hustle to help you raise funds and receive this discount.
Maintain a Good Credit Score
Surprisingly, having good credit helps you qualify for lower insurance rates. An Insurance Information Institute (III) report indicates that customers with a lower credit score are more likely to have an at-fault claim.
For example, the annual premium difference between good and bad credit can be as much as $2,000. This potentially controversial practice is prohibited in California, Hawaii, and Massachusetts.
Is There Car Insurance for Foreigners in the USA?
Yes, recent immigrants to the United States can purchase car insurance. However, they will pay new driver premium rates as insurance carriers look at their domestic driving history and won’t recognize a clean driving record in these other countries.
This is despite many nations being more challenging to drive in than the United States due to different traffic laws and local practices.
According to the National Conference of State Legislatures (NCSL), the following 17 states and the District of Columbia make it easier for immigrants to obtain a driver’s license and, subsequently, car insurance.
- New Jersey
- New Mexico
- New York
- Rhode Island
There are several ways to find affordable car insurance for new and first-time drivers. One option is comparing several insurance providers and trying to qualify for the various discounts. In addition, full-service insurance companies and online-only discount carriers offer competitive rates.
Other factors within your control include driving a less valuable vehicle, improving your credit score, and trying to be on a policy with an experienced driver with a clean driving history to save money.
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