Cheap Car Insurance for 20-year-olds

Don't stress about car insurance in your 20s — check out our tips and learn how to save!

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How much does car insurance cost for 20-year-olds?

In 2018, drivers in their early 20s paid $1,979 per year for car insurance — about 22% more than the national average. While not deemed as risky as teenage drivers, drivers in their early 20s are riskier to insure than older motorists. Anytime you are viewed as a risk to your insurance company, you should expect an increase in your auto insurance premium. Let's explore some ways to save money on car insurance during your 20s.

 

Finding cheap insurance at age 20

 

 


 

Which car insurance company is the cheapest for 20-year-olds?

Using a sample driver profile outlined here, we took average annual premiums for 20-year-old drivers to determine which company has the cheapest rates. For qualifying drivers, USAA offers the cheapest rates for this age group. GEICO is the next-cheapest option.

 

CAR INSURANCE FOR 20-YEAR-OLD DRIVERS
Insurance CompanyAverage Annual Premium
Allstate$2,636
Farmers$2,020
GEICO$1,438
Liberty Mutual$2,686
Nationwide$1,582
Progressive$2,287
State Farm$2,379
USAA$1,261

 

 

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How much is car insurance for young drivers?

Your 20s can be a time of personal, professional, and financial flux. On average, drivers aged 20 to 24 pay over $800 more for car insurance each year than drivers between the ages of 25 and 29 do. This has to do with the increased risk of insuring a younger driver versus a more experienced motorist. Drivers aged 25 to 29 file fewer claims and enjoy more affordable auto insurance premiums.

In order to find the cheapest car insurance company for young drivers, we got rates for drivers aged 20 to 24 from popular insurance companies in the US.

Car Insurance CompanyAverage Annual for Young Drivers
Allstate$3,064
Farmers$2,380
GEICO$1,656
Liberty Mutual$3,411
Nationwide$1,907
Progressive$2,749
State Farm$2,909
USAA$1,439

 

 

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Gender and car insurance rates for young drivers

Until your 25th birthday, gender is a considerable car insurance rating factor. Auto insurance companies look at risk exposure (the probability you will get into an accident and they will have to pay out a claim) when calculating premiums. To an auto insurance company, a 20-year-old male driver poses a greater risk than a female driver. Males pay $173 more than the average cost for car insurance than females over the course of a six-month premium cycle. Take comfort in the fact that across all age groups, men pay only $1 more per year than women.

 

AVERAGE ANNUAL PREMIUM BY GENDER
AgeDifference
19$235
20$173
21$154
Average$187

 

 


 

How to find affordable car insurance as a 20-year-old

Although it might feel like you’re going to pay an arm and a leg because of your age, there are some things you can do to save on your car insurance policy even if you’re a young driver.

 

Shop around

The best advice we can give is to shop around with as many car insurance companies as possible. Rates vary substantially based on the car insurance company. Keep in mind, the car insurance premiums we presented above are based on a generic user profile. The only way to find rates suited for you is to get quotes from as many different companies as possible. Enter your ZIP code below to see personalized estimates!

 

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Good student discount

Most car insurance companies offer a discount to good students between the ages of 16-25. Basically, if you have a 3.0 GPA or above (on average), your car insurance company can offer you a student discount. The reason for this has less to do with a reward for academic success, but the way insurance companies view students with good grades. Returning to this idea of risk management, car insurance companies see high performing students as less likely to take risks while driving — all of which makes them a cheaper client. Combined with a defensive driver discount, you can save an average of $189!

 

AVERAGE ANNUAL SAVINGS FOR GOOD STUDENT AND GOOD DRIVER DISCOUNT
AgeMaleFemale
19$278$160
20$238$139
21$202$117

 

For more information on car insurance discounts for students, see our guide here.

 

Defensive driver discount

If you’ve taken a defensive driving class, meaning a professionally instructed class that your car insurance company usually must approve of ahead of time, you may be entitled to a discount. Like having good grades, car insurance companies see those who have completed these types of courses as safer and cheaper clients.

 

File claims wisely

Your car insurance has a nasty habit of working as a double-edged sword. The more you use it, the more it will cost. After you file a claim, your insurance provider will give you an accident surcharge for three to five years. Looking at our data below, you can see this increase over the course of three years can be as much as your total premium in a year. As such, the general rule of thumb in the insurance world is if you can cover the damages out-of-pocket and you're the at-fault driver, pay for the damages yourself.

 

AVERAGE ANNUAL INCREASE FOR AN AT-FAULT ACCIDENT
Increase at 6 monthsIncrease at 12 monthsIncrease at 3 Years
+$291+$582+$1,746

 

If you’re unsure of whether or not to file a claim for damages to your vehicle, use this handy breakdown.

  • Get an estimate for the cost of repairs at a mechanic shop.
  • Use our State of Insurance analysis to see how much an at-fault accident would raise your raises in your state. Consider that value over three years, as that’s usually how long your insurance company will charge you.
  • Compare the premium increase and your deductible to the cost of out-of-pocket expenses. If it’s cheaper to pay for the repairs yourself, do that.

This pertains specifically to collision car insurance claims. Not-at-fault accidents or comprehensive claims typically don’t raise your rates as dramatically as at-fault collisions.

 

Be smart with your car insurance coverage

As your vehicle ages, it loses value. In terms of your car insurance, this means that the coverage you once had on your 2000 Civic might not be necessary anymore. A general rule of thumb in the world of car insurance is if your vehicle is worth less than $4,000, you probably don’t need physical protection. On average, comprehensive and collision coverage make up about half of your premium.

 

Bundle your renters or homeowners insurance policy

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

 

AVERAGE ANNUAL SAVINGS BY BUNDLING
RentersRenters with Multi-Policy
$1,323$1,250

 


Recent Questions:

Cheap Car Insurance for 20-year-olds

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Cheap Car Insurance for 20-year-olds

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