Cheap Car Insurance for 16-Year-Olds

Maintaining an appropriate breadth of coverage as a less experienced teen driver is critical in ensuring you're adequately protected in the case of an at-fault accident. Carrying a low level of coverage — like the state-mandated level of liability — can put you at risk financially, and won't cover damages to your own vehicle.

However, opting for full coverage as a 16-year-old driver comes at a great cost, especially for those on their own policy rather than their parents'. See the chart below to compare how rates can go up drastically if you upgrade from state minimum to full coverage — it's an extra $371 per month.

Because of how expensive it is for a 16-year-old driver to find cheap full coverage auto insurance, we analyzed rates from some top car insurance companies. The following insurers offer lower rates than the national average for a 16-year-old driver with full coverage at 50/100/50 with a $500 deductible ($3,401 for a six-month policy). Keep in mind some of these insurers don't offer coverage in all states.

THE MOST AFFORDABLE INSURANCE COMPANIES FOR FULL COVERAGE: 16-YEAR-OLD DRIVERS

Just like age, gender can affect a driver's insurance premiums.

A young male driver is more likely to receive a citation or be in an accident than is a young female driver. As such, they are more expensive to insure.

On average, 16-year-old male drivers pay $300 more per six-month policy period for insurance than do their female counterparts. As drivers age, the difference between genders' auto insurance rates becomes less significant. In fact, some states don't allow insurance companies to use gender as a metric for determining car insurance rates.

AVERAGE MONTHLY PREMIUMS FOR 16-YEAR-OLD DRIVERS BY GENDER

Where you live also plays a big role in deciding your young driver’s insurance premiums. Because insurance as a whole is state-regulated and ZIP-code specific, variations amongst the area you live will cause the cost for car insurance to vary greatly.

States with high numbers of bodily injury claims or states with no-fault laws such as Michigan or Florida will cost more to get insured. Moreover, the number of drivers in your state can also impact your child’s insurance rate. States with a low population density where there is less bodily injury or overall liability insurance claims, such as midwestern states like Ohio, tend to have lower premiums than states that are more populated.

The more drivers your state has, the more likely you are to be near other drivers, increasing the chances of a collision. Insurance companies need to account for that additional risk.

MOST EXPENSIVE STATES FOR 16-YEAR-OLD CAR INSURANCE

The type of car your teen drives will help to dictate their car insurance rates. For example, a teenager with an off-road capable truck is statistically more likely to have a higher insurance rate than a modest sedan.

As a general rule, any vehicle with a high MSRP — like many high-performance sports cars and luxury vehicles — will have a correspondingly high premium because of the expense your insurance company will have to pay to replace it if it's totaled. So, if you’re looking for a cheaper rate for your teen driver, you should stick to a simple car like a sedan. To save even more, consider a used car over a new one.

Consider, as well, the type of insurance coverage your teen driver's vehicle will need. If your teen needs full coverage, including comprehensive and collision coverage as well as uninsured motorist coverage, you can expect to pay more — as demonstrated above.

Good student discount

If your young driver has the grades, you might want to consider the good student discount. Your insurance company will require proof, such as a transcript. Usually, your insurer will require above a 3.0 GPA, or "B" average. But this can vary, so you'll want to speak with your insurer specifically for details.

Defensive driver discount

Another option is what’s called a defensive driver discount. Young teenage drivers who have taken a professional driving course are less likely to receive a citation or get into an accident. Like the good student discount, your insurance company will usually require proof of this such as a receipt. Not every insurance company offers this discount, so ask your insurance company beforehand!

Keep a clean driving record

Because teens are already more likely to be in a car accident or receive a citation, it is imperative for low rates to keep them out of any legal trouble. Texting while driving, speeding, or being in an at-fault accident can seriously affect your premium. In a state-by-state breakdown, DUIs, racing, and hit-and-runs — on average the most expensive citations — raise insurance premiums by at least 60%. Moreover, most insurance companies offer a good driver discount, dependent on keeping a clean driving record.

Consider, however, that these numbers are a holistic average of the entire U.S. population. If your teen receives a citation or violation, you can expect the rates to be significantly higher. Another thing to keep in mind is how long your rates will be affected after an accident or citation. Regardless of your age, most car insurance companies will charge you for three to five years after an accident. So if your teen driver gets a ticket for racing, that $997 annual premium increase will add up to $2,991 in additional premium over three years.

Keep your 16-year-old on the family's auto insurance policy

Although it's tempting to get your child their own policy, our data shows that it will result in higher rates — over $1,600 more per year. However, by putting a teen driver on their parents' policy, the savings can add up to more than 50% compared to a teen on their own policy. Moreover, most insurance companies require anyone living in your residence — as a 16-year-old would likely be — above legal driving age be either added to your policy or be designated as an excluded driver. If your teen were to use your vehicle for any reason, they risk not having coverage because they have a policy of their own and are excluded from your coverage.

AVERAGE AUTO INSURANCE RATES BY STATE: ADDING A TEEN TO PARENTS' POLICY