Car insurance for young drivers
 

As you reach your 20s, you evolve from a risky teen driver to a more responsible adult in the eyes of an auto insurance company. Whether you remain on your parents' policy or venture out to find your own car insurance coverage, the road to the perfect policy — and a reasonable auto insurance rate — can be confusing.

Let's walk through the best ways to save on auto insurance in your early 20s — starting with our list of the most affordable auto insurance companies for young drivers. 


The best cheap insurance companies for young drivers
 

In order to find out which companies offer the cheapest auto insurance premiums for young drivers in their 20s, we examined rates from five popular insurance companies in a collection of randomized ZIP codes in the U.S. (methodology). GEICO offers the cheapest rates for young drivers, with State Farm coming in a close second.

See below additional details:

 

BEST CHEAP CAR INSURANCE COMPANIES FOR DRIVERS AGED 20-25

 

Car Insurance CompanyAverage 6-Month Premium
State Farm$961
Allstate$1,393
GEICO$826
Progressive$1,206
Liberty Mutual$1,183

 

The profile used to generate the above rates may not match your circumstances. Use the above data as a reference point when comparing car insurance. Try beginning your search for an auto insurance policy with GEICO and State Farm before moving on to compare more expensive quotes.

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How life events affect auto insurance costs as a new driver

 

There are some gray areas as far as car insurance in your 20s is concerned. Many drivers in their 20s have one foot in the world of adulthood, and another foot in their parents' house. Insurance, in all its forms, reflects the insured party and their assets. With every major life event, car insurance premiums are subject to change. Let's break down reasons insurance rates might change and how to prepare for these circumstances.

 
Living with roommates

Most insurance companies have stipulations regarding roommates and shared vehicles — they either need to be listed on your car insurance policy or excluded entirely. Because you and your roommate share a home and responsibilities, an insurance company will assume you might occasionally share vehicles and want to be covered to account for this extra risk.

If you’re living with someone else, either add them to your policy (or you to theirs) or exclude them. To exclude a driver from your policy, some insurance companies may require you to present them with documentation that shows the other party has their own car insurance policy. Others will just take your word for it.

Learn more about car insurance and roommates

 

Marriage and car insurance

After you get married, inform your insurance company and add your significant other to your policy if you haven't already. This will simplify your car insurance situation in several ways. First, you will see an automatic decrease in your premium. By updating your marital status from single to married, you can expect your car insurance premiums to drop by about $89 per year.

Also, it's just easier. As we stated, if they’re not on your policy already you’ll have to exclude them — meaning, anytime they would use your vehicle they would essentially be driving without insurance. This can come back to bite you if you need to switch vehicles, or if you’re unable to drive and need their help. 

Consult our guide to marriage and auto insurance.

 

Renting vs. buying a home

Homeownership opens up some car insurance savings possibilities. Just like getting married, buying a home can decrease your car insurance premium for two reasons. One, if you bundle your home and auto insurance policies with a single company, you could receive a handy multi-policy discount. Second, insurance companies view homeowners as more financially stable than renters and thus reward that stability with cheaper auto insurance rates.

Learn more about car and home insurance bundling.


Do you need your own car insurance policy in your 20s?

 

Yes
No

In the simplest of terms, you need your own policy if you are living outside of your parents' residence and drive a vehicle.

Because insurance is ZIP code-specific, living on your own with your vehicle (even in the same city) doesn't allow your insurance company to anticipate the risks they would use to calculate the premium.

You don't need to get your own policy if you don't drive a vehicle regularly or if you still live with your parents.

If you're away at college — usually more than 100 miles away — but don't drive, you should speak with your insurance company about a Student Away From Home discount.


Other ways to save on car insurance as a new driver in your 20s

 

Aside from your teenage years, your 20s will be the most expensive time to insure your car. Young and inexperienced drivers are considered liabilities for insurance companies and thus are charged higher than other drivers. Still, you can alleviate these higher rates in one of several ways.

 

Defensive driving coursework

If you're younger than 25 and looking for insurance, taking a defensive driving course can save you a few bucks on your auto policy. To an insurance company, drivers who have taken a defensive driving class are less likely to receive citations or file claims. All of which means you appear to be a better client for the insurer — one who earns a cheaper rate!

 

Keep your grades up

If you're under 25 years of age and maintain a "B" average, your insurance company will often reward you with a good student discount — dependent on the proof you provide them. Coupled with a defensive driver discount, drivers in their 20s with good grades can save an average of $122 per year.
 

Bundle your insurance policies

If you rent an apartment or own a house, use one insurance company for both. Bundling your auto and renters policies or auto and home coverages with a single company can save you money on your auto insurance. Plus, it keeps all your bills within the same company.

Find the ideal policy for you today in just a few minutes.

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Ava Lynch
Ava Lynch LinkedIn

Ava worked in the insurance industry as an agent for four-plus years. Currently providing insights and analysis as one of The Zebra’s resident property insurance experts, Ava has been featured in publications such as U.S. News & World Report, GasBuddy, and Yahoo! Finance.