How to find the best cheap car insurance for new drivers
The 3 best auto insurance companies for new drivers
Our research indicates Nationwide, USAA and GEICO provide the cheapest insurance rates for new and young drivers. See below for a few examples of insurance features and discounts these companies offer new drivers.
Nationwide
While $1,142 is not exactly a cheap premium, it's still among the cheapest available for a 16-year-old male. Similarly, the company is on the lower end for drivers with no insurance history, coming in at $661 for a six-month policy. Nationwide also provides some specific policy features designed to help young or new drivers, including the following:
- A good student discount for young drivers who maintain at least a B average.
- Accident forgiveness prevents a driver's rates from going up after their first at-fault accident.
- Roadside assistance in case a driver finds themselves stranded or otherwise experiencing car troubles.
- The Nationwide SmartRide usage-based insurance program measures a driver's safety habits in order to provide a more accurate (and oftentimes cheaper) rate.
GEICO
GEICO has long been one of the more affordable major car insurance companies, and that holds true for newer and younger drivers as well. A six-month policy averages $1,545 for a 16-year-old male, higher than average rate is still dramatically cheaper than most competitors. The average rate for a new driver comes in at a more reasonable $633 — still much lower than many other insurers. GEICO also provides some specific features designed to help younger or newer drivers.
- Discounts for good grades or membership in certain student organizations.
- Company-designed driver education and safety programs.
- Discounts for drivers who complete driver training programs.
USAA
USAA is known as one of the cheapest major insurance companies for drivers of any age or background. For a male 16-year-old, USAA premiums average $1,105 for a six-month policy, while those for a driver with no previous insurance history come in at an average of $664. USAA offers cheaper rates in general due to its stringent eligibility guidelines, as drivers must be in the military (or in a military family) in order to be eligible. For those who are eligible, here are some specific features that newer drivers may want to consider:
- The USAA SafePilot program is USAA's entry into telematics, offering drivers the chance to save money by practicing safe driving habits.
- A discount for drivers under 21 who complete a driver training program.
- A good student discount
Read on to see other cheap insurance companies for new drivers, or enter your ZIP code below to start shopping for quotes from top companies.
Compare car insurance quotes online to find an affordable policy.
How to shop for auto insurance without prior coverage — table of contents:
- How much is auto insurance for new drivers?
- How new drivers can save money on car insurance
- Additional resources
Cheap car insurance companies for first-time drivers
In auto insurance terms, a "new driver" is someone with no driving history or insurance record. This can include newly licensed teenagers, young adults or people who obtained their driver's license later in life, or drivers new to the U.S. Each of these first-time drivers faces a similar challenge when it comes to finding cheap car insurance.
To generate estimated auto insurance prices for new drivers, The Zebra's research team used two driver profiles (methodology). One driver is a teenager on their parents' policy and another is a 30-year-old driver, previously uninsured. See below typical car insurance rates for a first-time driver with zero driving history. Keep in mind that most 16-year-olds are likely to stay on their parents' policy. The data below is more likely to reflect the rates of a 16-year-old getting their own policy.
6-MONTH INSURANCE PREMIUMS, 16-YEAR-OLD MALE ON PARENTS' POLICY
| Car Insurance Company | Average 6-Month Premium |
|---|---|
| Allstate | $1,920 |
| Farmers | $1,740 |
| GEICO | $1,545 |
| Liberty Mutual | $1,519 |
| Nationwide | $1,142 |
| Progressive | $1,647 |
| State Farm | $1,452 |
| USAA | $1,105 |
In short, if you're looking for the cheapest car insurance for a new teen driver, begin your search with USAA, Nationwide and State Farm. It is very expensive to insure a 16-year-old driver on a separate policy — nationally, it costs over $2,800 per six-month policy. Premium costs decrease significantly after young drivers turn 20, they still pay nearly 100% more than do the average driver in the U.S. Young drivers' lack of driving experience and tendency to make poor decisions behind the wheel — like speeding and texting while driving — means car insurance companies charge these drivers higher premiums to protect themselves against the probability of claims.
The second category of new drivers — older drivers who obtained their driver's licenses much later in life — shows a similar pattern.
CAR INSURANCE PREMIUMS WITH NO INSURANCE HISTORY
| Car Insurance Provider | Average 6-Month Premium |
|---|---|
| Allstate | $1,131 |
| Farmers | $923 |
| GEICO | $633 |
| Liberty Mutual | $1,118 |
| Nationwide | $661 |
| Progressive | $688 |
| State Farm | $646 |
| USAA | $664 |
Ways for new drivers to save money on car insurance
Now that we have outlined the top insurance providers and the cost of insuring a new driver, let's explore some other ways to save.
Stay on your parents' auto insurance
If you’re a new teen driver, the best way to get cheaper car insurance is to stay on your parents' plan. Your parents' insurance background, credit score and driving history will very likely earn you lower rates than you'd find on your own. By staying on your parents' auto insurance policy as long as possible, you can save thousands of dollars per year. College students can usually stay on their parents' policy as well, provided they don't drive their own car while living away from home.
Shop around
One of the best ways to get affordable coverage is to compare rates from a number of companies. This is because every insurer underwrites policies based on slightly different rating factors, sometimes leading to large differences in premiums. Seek out auto insurance quotes from different companies to see which is offering the best rate.
Choose a moderately priced vehicle
The value and other characteristics of your vehicle contribute to your insurance premium. For instance, picking a luxury vehicle — like a Mercedes-Benz — comes with an additional cost: higher insurance premiums. This is especially true for new drivers. A first-time driver with a brand new car or pickup truck is a major red flag for an insurance company. Similarly, a vehicle with a number of safety features can also lead to savings. However, if these safety features include high-tech sensors or other specialized equipment, this can actually lead to higher rates. In general, if you're a new driver looking to save money, get your feet wet with an older vehicle.
Choose a high deductible
Depending on your state, liability coverage may be all that you are legally required to carry. However, some lenders may require physical damage insurance like collision coverage or comprehensive coverage, which can increase your premiums dramatically. Your deductible for these coverages works inversely with your payment, meaning that the lower your deductible, the more expensive your insurance premiums. Those looking for cheaper auto insurance rates should consider increasing the amount of your deductible to save money on your car insurance coverage.
Look for discounts
Discounts are readily available in the auto insurance world. Many are subject to state and insurer restrictions. Below we have listed some common discounts. Keep in mind that utilizing car insurance discounts is not going to cut your premium in half. However, they can certainly chip away at car insurance costs for first-time drivers.
- Good/safe driver
- Multiple drivers
- Multi-vehicle
- Multi-policy
- Payment by bank account
- Paid in full
- Good student
- Telematics
- eSign
- Affinity membership
- Homeowner discount
- Green vehicle discount
Learn more about popular car insurance discounts:
Multi-policy discounts
You can become eligible for a multi-policy discount by carrying multiple policies with one insurance company. Common policy combinations are home-and-auto or renters-and-auto. These discounts may be applied to both policies. The discount you receive may vary depending on your coverage combination. For example, you'll receive more of a discount for bundling homeowners and auto policies than by adding a renters insurance policy to your auto coverage. The logic is simple: a homeowners policy brings in more revenue for an insurance company than does renters insurance.
| Residence Type | Annual Savings Amount |
|---|---|
| Renter | $79 |
| Homeowner | $145 |
| Condo Owner | $121 |
Multi-car discount
Similar to a multi-policy discount, a multi-car discount refers to insuring more than one car with a single company. The discount is automatically added either at policy inception — if two cars were insured from the start — or upon the addition of a second vehicle to the policy.
Defensive driving discount
This discount entails taking a defensive driving course and presenting your insurance company with proof in the form of a receipt or transcript. The logic behind this discount is clear: defensive driving classes make you a safer driver, which makes you less risky, i.e., cheaper, to insure.
Equipment discount
If your car comes with an anti-theft device — or if you utilize a service like Lojack — your insurance company may throw in a discount. The discount tends to be smaller than a multi-policy or defensive driver bonus, but every little bit helps. Anti-theft devices are commonly built into modern vehicles. Just be sure any security devices are taken into account when your quote is generated.
| Safety/Anti-Theft Device | Average 6-Month Premium | Discount |
|---|---|---|
| None | $741 | — |
| Active Disabling Device | $738 | $3 |
| Passive Disabling Device | $736 | $6 |
| Tracking Device | $736 | $5 |
| Audible Alarm | $739 | $3 |
Good driver discount
This discount is available if you have a clean driving record — meaning no at-fault accidents or citations. Safe drivers can expect this valuable discount to be added to your policy when your Motor Vehicle Report (MVR) is pulled at the inception of your policy. If you're convinced that you practice safe driving habits and are not receiving a discount, contact your insurance company and inquire about a good driver discount.
Profession/occupation discount
This discount goes by several names, but the idea is simple. Some insurance companies will give you a discount based on your occupation. Statistically, occupations such as teachers, physicians, or police officers are less likely to file a claim. An insurer will typically require proof of profession — a photocopy of your degree is a common request.
Good student discount
If you're younger than 25 and have good grades — typically a B average (3.0 GPA) or better — speak with your insurance company about a good student discount. Normally, they’ll ask for a transcript every six to 12 months as proof of your continued good standing.
How to pick the best car insurance company as a new driver
At the end of the day, all the discounts in the world won’t matter if you choose the wrong company. Some auto insurance companies will see your age and driving background as too great a liability and apply exorbitant premiums. Shopping around every six months can help ensure you’re getting the best rate for your driving profile. Enter your ZIP below to get car insurance quotes from a number of top insurance companies to get started.
