Cheap Car Insurance for 20-year-olds

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How much is car insurance for 20-year-olds?

Being 20-years-old can have major implications in the insurance world. While you’re not longer rated as a risky teenager, you still pay more for auto insurance than the majority of other ages. On average, 20-year-olds pay nearly $1,400 more for auto insurance than the national average. In order to understand how you can save as a 20-year-old, we need to first understand what causes you to pay more. Let’s break it down by age, gender, location, and vehicle type.

  1. By Age
  2. By Gender
  3. By Location
  4. By Vehicle
  5. What are some ways to save?
  6. Car Insurance for 20-year-olds: Summed Up

Your Age and Premium

Average Premium on Family Plan
You see some big savings simply from turning 20 - an average of $260 per year in savings! This data assumes you’ve been driving since you were 16-year-olds and were insured since then as well. The more years of driving experience you have and the more time you are insured, the less of a risk an insurance company sees you. And, naturally, any time there is less risk exposure to an insurance company there will be less premium.

Age Premium
19 $2,037
20 $1,906
21 $1,720

Your Gender and Your Premium

While you’re under 25, gender is still a pretty considerable rating factor. Insurance companies look at risk exposure when calculating premiums, and to them, a 20-year-old male driver is more risky than a female. As such, males pay $172 more than average for auto insurance than females during a 6-month premium cycle. Still, you should take comfort in the fact that once you turn 25, the difference between men and women’s premium is only $100 bucks per year. And, for all averages, men only pay $1 more than women.

Average Premiums for 19-21-year-olds

Age Male Female Difference
19 $2,154 $1,919 $235
20 $1,992 $1,819 $173
21 $1,797 $1,643 $154
Average $1,981 $1,794 $187

Your State and Your Premium

Insurance is not federally regulated but by your state and then rated based on your zip code. So, you can see why where you live plays a big part in your insurance premium. If you live in a well populated zip code, such as a university-area, you can expect to pay more for the added probability of an accident.

Annual Premium for Most Expensive States

State Premium
Louisiana $9,237
Michigan $7,470
Texas $6,967
Delaware $6,061
New York $4,785

Your Car and Your Premium

Your insurance rate not only factors in you and your actions, but also your vehicle. So, if you have a high-value vehicle with full coverage, you’re going to have a higher premium as your insurance company would have to replace it in the event of a covered claim. So, if you’re looking for a car that will reduce your premium, look for moderate cars and get an insurance estimate from your company beforehand.

So, how can you save?

Now that we have outlined why 20-year-olds pay more for auto insurance, let’s get into some savings discounts.

Good Student Discount

Most insurance companies offer this discount from 16 until you’re 25-year-olds, but this can vary. Companies offer this not because they care about your academic success, but historical data has shown them that student’s with higher grades (the discount usually requires above a 3.0) drive more cautiously and are less likely to file a claim or get into an accident. Combined with a defensive driver discount, you can save an average of $189!

Average Savings for Good Student and Good Driver Discount

Age Male Female
19 $278 $160
20 $238 $139
21 $202 $117

Defensive Driver Discount

If you’ve taken a defensive driving class, meaning a professionally instructed class that your insurance company usually has to approve ahead of time, you may be entitled to a discount. Insurance companies offer this as drivers who have completed this type of course are less likely to need financial support from their insurance company.

Keep a clean driving record

Keeping a clean driving record will save you the hassle of dealing with tickets as well as the tedious claims process. On average, an at-fault accident can raise your premium $300 per year. DUIs and racing, the most expensive citations, can raise your premium 40%. And, most insurance companies will continue to charge you for these accidents for 3 years.

Bundle a renter’s policy

If you’re living in an apartment or house, you should have a renter’s policy. A renter’s policy will cover you (your liability) as well as your personal property in the event of a covered claim. Compared to an auto insurance, renter’s policies are quite inexpensive - $150 a year. But if you get your renter’s policy from the same company as your auto, you can expect a multi-policy discount.

Bundling Savings by National Average

Renter Renter with Multi-Policy
$1,323 $1,250

Summary: Car Insurance for 20-year-olds

The first year of your 20s welcomes you to the early stages of car insurance savings. On average, 20-year-olds pay $1,906 for auto insurance every 6 months. Choosing a moderate car, keeping your grades up and your driving record clean are great ways to start saving. Moreover, if you have a renters policy, consider bundling your policies together to receive a discount. However, the best way to save on auto insurance is to look at a wide variety of companies often. There are many things that can change in your driving profile that can impact your premiums. Only with us can you shop 200 companies at once. Start now.

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