Cheap Car Insurance for 25-Year-Olds

Paying too much for auto insurance as a 25-year-old driver? Check out our tips on how to save.

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Car insurance for 25-year-olds: a guide

The average car insurance rate for a 25-year-old driver is $1,770 per year — or about $885 for a standard six-month policy. While 25-year-old drivers do pay more than the national average, their premiums decrease by nearly $300 per year just by virtue of turning 25 and no longer being designated as "young drivers." Since saving money on car insurance is important at any age, let’s explore some ways to save on car insurance premiums at the age of 25.

 

Table of contents:

  1. Average car insurance costs for 25-year-olds
  2. How to save on auto insurance
  3. When does car insurance go down after 25?
  4. Additional resources

 

What is the cheapest car insurance company for a 25-year-old driver?

In order to find the cheapest car insurance policy, we created a user profile (outlined here) and gathered premiums from some of America's most popular companies. Based on our research, USAA and GEICO provided the most affordable auto insurance rates for 25-year-olds.

 

Insurance Provider
Average 6-month Premium
Allstate$1,117
Farmers$919
GEICO$680
Liberty Mutual$888
Nationwide$794
Progressive$885
State Farm$726
USAA$605

 

USAA offers the cheapest rates at $1,210 annually, $605 per six-month term, just over $100 per month for a 25-year-old driver. Those ineligible for USAA's armed forces-focused coverage should consider GEICO, which charges around $13 more per month for similar coverage. 

 

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Finding cheap car insurance after age 25: what to consider

Now that we've covered how your age impacts your premium, which vehicles are the cheapest to buy and insure, let's breakdown some quick ways to lower your premium.

 

Avoid collision claims

Accidents happen — but that doesn't mean you need to file a claim. Depending on the value of damage, you can pay more in increased insurance premiums than the out of pocket damage. For example, you live in Texas and damaged your vehicle while backing out of your driveway — no other vehicles involved. The out of pocket expenses are $1,400.

In 2018 in Texas, the average collision claim increased rates $801 per year. Because most insurance companies will increase your rates for three years after an accident (at minimum), you can expect that $801 to equate to $2,403 total. If you have a $500 deductible, the total expense of the accident is $2,903. If you had paid for the damage yourself, you could have saved $1,503. 

If you're unsure whether or not to file a claim, or just want more information, see here.

 

Drop your coverage after 10 years of ownership

If your vehicle is 10 years or older or worth less than $4,000, consider dropping your collision coverage. This coverage is designed to protect the physical integrity of your vehicle, but if it isn't worth much you could be paying for coverage you do not need. You can determine the value of your vehicle by using Kelley Blue Book. If it's determined you do not need your collision coverage, considering keeping your uninsured/underinsured motorist coverage. This will cover any property damage done to your vehicle after an accident with an uninsured driver — for example a hit and run. Furthermore, you should also keep your comprehensive coverage to prevent weather, animal, and theft-related damage to your vehicle.

 

Bundle policies when possible

If you own a home or are renting, you can save money on your auto insurance by bundling your policies. 

 

Double-check for discounts

Many discounts will be automatically added to your policy based on the VIN of your vehicle or your driving history. However, there are some you need to look or apply for in order to qualify. Below are some highlights.

 
Participate in telematics programs

Telematics, or usage-based insurance providers, use the way you drive in order to determine your premium. Here, your driving habits can earn you a discount on your premium. By avoiding harsh braking, high acceleration speeds, and late-night drives, you can save on your auto insurance policy. Below are the advertised savings by insurance company.

Company
Estimated Savings
Progressive SnapShot
Average of $130
Allstate Drivewise
Average of 10-25%
State Farm Drive Safe & Save
Up to 15%
Esurance DriveSense
Varies
Nationwide SmartRide
Up to 40%
Liberty Mutual RightTrack
Average of 5-30%
Root Car Insurance
Varies
Metromile
Varies

Learn more about usage-based insurance.

 

When does car insurance go down after 25?

In general, most drivers find that their rates steadily decrease as they get older. However, the rate decrease is not likely to be as drastic as when you move from your teens to your 20s. Still, as drivers get closer to 30, the rates become more affordable, with the average yearly car insurance premium for a 30-year-old in the U.S. coming in at $1,552. That's a savings of $218, or $109 for a 6-month policy. Rates tend to continue to lower through your 40s and often reach their lowest points in their 50s. In short, along with the methods of saving outlined above, one of the best ways to save on car insurance is to simply keep getting older. 

 

Shop around

The absolute best thing you can do is shop around. Although your rate does decrease after you turn 25, only one company will offer you the lowest rate. Enter your information below to see comparison quotes from local and national insurance companies based on your driving record, vehicle, and age.

 

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Additional resources

If you're looking for more ways to save money on car insurance, see our articles:

 


 

Each article is thoroughly researched to ensure we provide readers the most accurate — and helpful! — information possible. That’s insurance in black and white.®


Recent Questions:

Cheap Car Insurance for 25-Year-Olds

Should both my girlfriend and I be on the car title?

I would only put the title in one name — whoever will own and register the vehicle. Putting two people on the title may only complicate things unnecessarily and make it harder to sell.

Does the name on the title affect car insurance rates?

No, your rates should not change by putting the car in your son's name if he is already listed on the policy. Who the car is registered under does not impact the rate at all.

Can I get insurance on just my driver's license

If you do not own a car and you are not going to be driving someone else's car regularly, you can get a non-owners policy. A non-owners policy will allow you to drive any car. It will only cover you for liability.

Should I drop my 25yo son from insurance?

To answer your first question, will removing your son from the policy help decrease your premium, it depends. Some companies are going to charge you because the claim was made on your policy so your rates can still be impacted at renewal, even if you take your son off the policy.

Ava Lynch LinkedIn

Based in Austin, TX, Ava has been in the insurance industry as a licensed agent for 4-plus years. Ava is currently one of The Zebra’s resident property insurance experts and has been featured in publications such as US News Report, GasBuddy, and Yahoo! Finance.