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Ava Lynch

Insurance Analyst

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  • 7+ years of Experience in the Insurance Industry

Ava joined The Zebra as a writer and licensed insurance agent in 2016. She now works as a senior insurance contributor, providing insights and data a…

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Bill Mense

Partner, United Heartland Insurance

William Mense has amassed 45 years of insurance experience in a family-owned agency begun in 1914 by his grandfather. That agency is now in its 3rd g…

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Ross Martin

Insurance Writer

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  • 4+ years in the Insurance Industry

Ross joined The Zebra as a writer and researcher in 2019. He specializes in writing insurance content to help shoppers make informed decisions.

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The best cheap car insurance companies for young drivers

affordability medal
Cheapest overall: USAA

USAA offers the cheapest average rates for young drivers at $161 per month. However, they must meet USAA's eligibility requirements. Read more about the pros and cons of USAA here as well as why they're rated the best insurer by young drivers.

GEICO logo
Cheapest for non-military drivers: GEICO

At $177 per month, GEICO offers the second cheapest average rates for young adult drivers and the cheapest overall for non-military members. See the pros and cons of opting for GEICO here and learn why Gen-Z rated them the third-best insurer.

To pinpoint the insurers offering the most competitive rates for young drivers in their 20s, we conducted a thorough analysis of data from seven major companies across all U.S. ZIP codes. USAA emerges as the cheapest company for young drivers. However, USAA ($161/month) requires customers to be members of the military community to qualify for its offerings.

For young drivers who don't meet USAA's eligibility criteria, GEICO ($177/month) offers the lowest price, closely followed by Nationwide ($194/month).

BEST CHEAP CAR INSURANCE COMPANIES FOR DRIVERS AGED 20-25
Company Avg. Annual Premium Avg. Monthly Premium
USAA $1,936 $161
GEICO $2,129 $177
Nationwide $2,325 $194
State Farm $2,523 $210
Farmers $2,652 $221
Progressive $2,822 $235
Allstate $3,633 $303

The Zebra’s Dynamic Insurance Rating Tool data methodology

The Zebra’s Dynamic Insurance Rating Tool for home and auto insurance rates utilizes the latest ZIP code-level rate filings from across the U.S., sourced from Quadrant Information Services and S&P Global. These filings, typically updated annually or biennially by insurers, are verified through Quadrant’s QA process and then integrated into The Zebra’s estimator.

The displayed rates are based on a dynamic home and auto profile designed to reflect the content of the page. This profile is tailored to match specific factors such as age, location, and coverage level, which are adjusted based on the page content to show how these variables can impact premiums.

For a comprehensive understanding, see our detailed methodology.

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

A full 20% of The Zebra's users are shoppers in their 20s looking for an affordable policy.[1] Enter your ZIP code below so that you too can compare personalized car insurance quotes and see which company can give you the best price!

Get auto insurance for young adults today!

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The Zebra's picks for best young adult car insurance companies

We recommend USAA ($161/month), State Farm ($210/month), and GEICO ($177/month) as the best car insurance companies for those in their early 20s. In our Customer Satisfaction Survey, these companies come highly rated by Gen Z drivers and combine affordability, relevant discounts, and programs tailored to meet the unique needs of younger drivers. Read more about each option below.

USAA logo
Best for military members and their families: USAA

USAA topped the list among Gen Z drivers in The Zebra's Customer Satisfaction Survey with a score of 9.19 out of 10. However, eligibility is limited to members of the military community.

Pros
  • Highly rated by drivers in their 20s and respected third parties

  • Lowest average rates

  • Good student discounts

  • SafePilot program reduces rates for safe drivers

  • Optional roadside assistance

Cons
  • USAA eligibility is restricted to military personnel, veterans, and their kin.

state farm logo
Best for non-military drivers: State Farm

State Farm ranked well overall among younger drivers with a score of 8.77 out of 10.

Pros
  • Nationwide availability

  • Comparatively low cost

  • Highly rated by third parties and young adults

  • Good student and young driver training program discounts

  • Drive Safe & Save telematics program

  • Optional roadside assistance

Cons
  • Less custom coverage options

geico logo
Runner-up: GEICO

GEICO also ranked well with a score of 8.57 out of 10. GEICO is also the cheapest on average for young drivers (after USAA).

Pros
  • High-ranking insurer according to Gen-Z

  • Offers a wide array of bundling options

  • Noted for its competitive auto insurance premiums

  • Robust online tools and mobile app for policy management and claims

Cons
  • Varying experiences with customer satisfaction quality

  • May not offer the lowest rates for certain demographics

  • Few physical offices for those who prefer in-person interactions

The Zebra Customer Satisfaction Survey methodology

Methodology:

These results are based on a survey of 2,722 U.S. insurance policyholders assessing satisfaction with their car and homeowners insurance providers. The survey was conducted using Survey Monkey and designed by our in-house team. It aimed to collect detailed insights from a census-balanced sample reflecting age, gender, and region.

Questionnaire

The questionnaire included demographic questions about age and gender identification and detailed inquiries into insurance experiences. Key topics:

  • Duration with insurance provider and coverage specifics, including teen drivers.
  • Claim filing experiences and satisfaction with claims handling.
  • Customer service interactions, trust in providers, and likelihood of recommending their insurance.
  • Use and satisfaction with digital tools and usage-based insurance programs.

Respondents rated their satisfaction on a Likert scale from 1 to 10 and provided qualitative feedback.

Data Analysis

Data were analyzed focusing on descriptive and inferential statistics to identify satisfaction trends and demographic impacts. Data cleaning and weighting were applied to ensure accuracy, alongside strict confidentiality protocols to protect data security.


Average auto insurance rates by age and gender

As mentioned, insurance rates for young adults tend to decrease once the driver ages out of their teen years. However, rates aren't don't always drop by age 25.

Summer Popovich, licensed insurance advisor at The Zebra's independent insurance agency
Agent insight: Does car insurance go down at age 25?

"People tend to think that their insurance rates dip at age 25.  And it's generally true for those who've been driving since 16—they've got a solid nine years under their belt. But if you waited until you were 18-21 to get your license, insurers still see you as relatively new behind the wheel. So, don't be surprised if turning 25 doesn't bring the rate drop you were hoping for, compared to those who started driving earlier."

Summer Popovich — Licensed insurance advisor at The Zebra

See below for average rates for drivers in their early 20s across some common rating factors.

Average car insurance rates for drivers aged 20-25
Age Avg. Monthly Premium Avg. Annual Premium
20 $283 $3,396
21 $229 $2,744
22 $211 $2,535
23 $198 $2,379
24 $188 $2,255
25 $165 $1,978

Do young women pay less than young men?

On the whole, the price difference between young women and men is not as wide as you might expect. On average, young male drivers only pay around $15 per month more than female drivers. 

Average car insurance rates for young drivers by gender
Gender Avg. Annual Premium Avg. Monthly Premium
Male $2,373 $198
Female $2,195 $183

Other factors young drivers don't always consider

We chatted with Summer Popovich, a licensed insurance advisor and member of The Zebra's in-house independent agency, for deeper insights into why young drivers, even those with clean records, face high insurance costs. She highlighted three key trends observed by her and her fellow agents:

  1. How long you've had your license.  "We hear more and more people are getting their license later in life, say 18-21. This could be because their parents didn't want the financial responsibility or because the state they lived in has extended permit driving. Either way, by 25, they don’t have as much driving experience as someone who started at 16 and their rates will reflect this." 
  2. Vehicle choice. "Sure, a Mercedes or BMW looks cool, but those high insurance costs add up. I'd advise my younger self: Start with a reliable, budget-friendly car, build a solid insurance record, and beef up your coverage and liability limits. THEN go for that dream car! And remember, check in with us about insurance costs before signing that loan!"
  3. Not understanding all the rating factors. "I spoke with two 23-year-olds in Georgia with very different insurance histories. One had stuck with the same insurer for three years, and after comparing rates, she cut her premium in half — quite the achievement in a state where rates keep rising. The other 23-year-old's history was at the opposite end of the spectrum. Her history was less steady, including a few lapses in coverage over a three-year period. She frequently changed policies with each new car purchase and accumulated past due balances, unaware of how such actions influenced her rates and insurers' readiness to cover her."[2]

The good news? There are steps you can take to save!


Cheapest states for young adult drivers

Location is an important rating factor when it comes to insurance premiums. The following table shows the top five cheapest states for young adult drivers (ages 20-25), according to our data.

Cheapest states for young adult drivers
State Avg. Annual Premium Avg. Monthly Premium
North Carolina $1,284 $107
Hawaii $1,412 $118
Ohio $1,732 $144
Idaho $1,741 $145
Indiana $1,812 $151

How life events affect young drivers' auto insurance costs

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. Since insurance reflects your life and assets, significant changes can affect your premiums. Below, we explore common reasons your car insurance might change and how to prepare for these shifts.

wedding ring icon

Marriage and car insurance

There are a few things you need to keep in mind:

  • If your spouse isn't on your policy, either add them or request your insurer to officially exclude them. Simply omitting them isn't an option. However, be aware that exclusion leaves them uninsured when driving your vehicle, potentially leading to problems if you need to switch cars or if you're unable to drive.
  • Don't forget to update your name and address (if needed). If you forget to update your insurer about getting married, changing your name, or moving, you might face issues like higher premiums, problems filing claims, delayed communications, or even a risk of policy cancellation due to inaccurate information.
  • You will likely see your premium drop! Just by updating your marital status from single to married, you can expect your car insurance premiums to drop by about $89 per year.

Living with roommates

Most car insurance companies require you to list roommates on your policy. This is because insurers believe that those who share addresses are more likely to share vehicles and want 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. Remember, once you exclude a driver, your insurance company will not cover any claims that arise while they are behind the wheel. This means that they must drive your vehicle for any reason.

Buying a home and car insurance

Homeownership opens up some car insurance savings possibilities. Just like getting married, buying a home can decrease your car insurance premium for two reasons:

  1. Multi-policy discounts. This happens when you bundle your auto and homeowners insurance policies with a single company.
  2. Even if you don't bundle, you'll probably see your car insurance rates drop. Homeowners are seen as more financially stable by insurance companies.

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

In the simplest of terms, you need your own car insurance policy if you live outside your parents' home and drive a vehicle. However, if you're living with your parents and either don't drive or only use their vehicle, you may not need a separate policy.

Insurance rates are determined by your ZIP code, so moving out changes the risk factors and your premium. If you're away at college more than 100 miles without a car, ask your insurer about a Student Away From Home discount for potential savings.

Things to keep in mind when getting off your parents' insurance:

  • Expect higher premiums. As a young driver on your own, you may see higher rates due to perceived risk and lack of personal insurance history, no credit history, etc. We'll discuss some of the causes and solutions for this in the next section.
  • You might need to change your coverage levels or deductibles. Your insurance needs may differ from what you had under your parents' policy. Evaluate the level of coverage you actually need as well as the highest deductible you could afford to pay should the worst happen.
  • You'll likely need to shop around. Rates can vary widely between insurers. Luckily, we make it easy for you to compare personalized car insurance quotes!

How to save on car insurance in your 20s

Aside from your teenage years, your 20s will be the most expensive time to insure your car. While you're seen as more responsible by insurers, finding a reasonable auto insurance rate can still feel challenging. Here's how you can keep those premiums in check:

Yes, we're an insurance comparison website. But this truly is one of the only ways to make sure you aren't overpaying like the first example Summer listed above. This way, you're able to take advantage of the drop in rates that comes with age.

All drivers can benefit from choosing cheaper vehicles because they generally come with lower insurance premiums because insuring them is less risky for insurers, as the cost of repairs or replacement is lower.

Car insurance discounts offer a great way for eligible drivers to save money. Discount options vary by company and may include savings for going claims-free, paying your premium in full or enrolling in auto-pay. Having certain safety features or anti-theft devices in your car can also lead to discounts.

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!

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.

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.

Young drivers should avoid lapses in coverage because it signals to insurers a higher risk, potentially leading to increased premiums. Consistent coverage demonstrates responsibility, helping to keep rates more affordable.



Frequently asked questions: Insurance for young adult drivers

Based on average insurance premiums and the results of The Zebra's Customer Satisfaction Survey, USAA is the best insurance company for young adult drivers. If you don't qualify for USAA, GEICO is another affordable option for coverage.

Assuming you keep a clean driving record and not incur any violations, car insurance rates are likely to decrease once a driver reaches the age of 25. Teens pay most for car insurance based mostly on inexperience; insurance companies see increased years of driving as a lower risk and therefore tend to reassess rates at a lower cost.

The best way to find the cheapest rates for car insurance is to shop around at every renewal period. Inquiring about discounts are also an excellent way to lower your rate. Different insurance companies offer different discount opportunities, though those eligible for common discounts like multi-policy, pay-in-full, electronic pay, accident-free or device discounts are likely to find these opportunities with several providers.

The answer to this question depends mostly on where you live. If you still reside in your parents' home, it is perfectly ethical to stay on your parents' policy. Because location is a rating factor in calculating insurance premiums, once you move, it is best to apply for your own coverage. If you are away at college and don't drive much, many companies offer a Student Away From Home discount that may be applied to your parents' policy.

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

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No junk mail. No spam calls. Free quotes.
Sources:
  1. Anonymized User Survey. The Zebra

  2. Summer Popovich. Personal Interview.


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About The Zebra

The Zebra is not an insurance company. We publish data-backed, expert-reviewed resources to help consumers make more informed insurance decisions.

  • The Zebra’s insurance content is written and reviewed for accuracy by licensed insurance agents.
  • The Zebra’s insurance editorial content is not subject to review or alteration by insurance companies or partners.
  • The Zebra’s editorial team operates independently of the company’s partnerships and commercialization interests, publishing unbiased information for consumer benefit.
  • The auto insurance rates published on The Zebra’s pages are based on a comprehensive analysis of car insurance pricing data, evaluating more than 83 million insurance rates from across the United States.