Cheap Car Insurance for 23-Year-Olds

You're transitioning into adulthood, which means more benefits from your car insurance company.

Being 23 can be a bit of an intermediate point of your life, both personally and in terms of auto insurance. On average, 23-year-olds pay $1,571 per 6-months for auto insurance — about $909.5 more than the national average. Because of this, we’ve decided to break down car insurance for 23-year-olds with your budget in mind. So, let’s get to it.


What’s the best way to get cheap car insurance when you're 23?

  1. Look for the right company
  2. Consider your state
  3. Improve your credit score
  4. Invest in your education
  5. Chose a moderate vehicle
  6. Look for discounts
  7. Car Insurance for 23-year-olds: Summed Up




Which company should you choose?


While many things about your car insurance premium are unfortunately unavoidable, such as how your age or state affects your rates, you can very easily change your company. In order to do some of the legwork for you, we decided to compare 5 big car insurance companies across 5 zip codes in the US using a profile outlined here.

Our Findings: Car Insurance for 23-year-olds

Location State Farm All State Geico Progressive Liberty Mutual
Scranton, PA $1,402 $987 $578 $574 $1,584
Columbus, OH $1,087 $1,847 $913 $973 $2,190
Fresno, CA $1,608 $775 $813 $994 $2,136
Aurora, CO $1,690 $1,368 $1,194 $966 $2,130
McKinney, TX $1,260 $1,847 $913 $973 $2,190
Average $1,409 $1,279 $875 $855 $1,865

As you can see, Progressive and Geico are in close contention for the overall winner. Bare in mind, however, that this data is representative of a specific generic profile. Consider our data as a starting point in your search, and be sure to shop around to get the best rate for your driving profile.





Consider your location


Although you might have other things on your mind than your possible insurance premium when deciding where to live, you should know your state (and more specifically, your zip code) can have a big impact on your premium. If you are located in a coastal region that is prone to flooding, such as Louisiana, you can expect to pay more for auto insurance. Moreover, if you live in a state with high insurance regulations, such as Michigan, you can expect to pay more for insurance as well.


Annual Premium for the Most Expensive States

State Premium
Louisiana $8,114
Michigan $6,557
Texas $5,910
Delaware $4,909
Kentucky $4,450





Improve your credit score


Insurance companies see a correlation between a poor credit score and proclivity for filing costly claims. As such, they charge higher premiums for clients with poor credit. On average, if you can improve your credit score from Poor (523 or lower) to Excellent (820 or more) you would decrease your annual premium of 53%. Just another reason to keep your credit score high!


Average Annual Premium Based on Credit Score in 2016

Poor Below Fair Fair Good Excellent
$2,411 $1,934 $1,571 $1,323 $1,130




Keep your grades up


If you’re still in college and have above a 3.0 GPA, you should look into getting what’s called a Good Student Discount. Insurance companies see students with above B averages as less risky of drivers and thus better clients. Often grouped together with a Defensive Driver Discount, you can expect an average savings of $119!


Average Annual Premium Based on the Defensive Driver Discount by Gender in 2016

Age Male Female
22 $176 $103
23 $151 $88
24 $135 $78


Please note: the data relating to specific companies does not consider a Good Student or Defensive Driver Discount. So, if you are eligible for this discount, you should expect a lower premium than the ones above.


Even if you’ve graduated, you can still expect some savings for your hard earned education. Just like having better grades makes you appear to be a less risky driver, having a college degree also helps alleviates insurance companies fears. On average, having higher education can save you $32 per year. Better than nothing!


Average Annual Premium Based on Education Levels in 2016

None High-School Bachelors Masters PhD
$1,355 $1,342 $1,323 $1,320 $1,319




Avoid high-value vehicles


It’s important to consider the relationship you and your vehicle have in terms of auto insurance. Pairing a risky driver with a high-value vehicle is always going to be more expensive than a moderate vehicle and the same driver.


Average Annual Premium Based on Vehicle-Type in 2016

Cars Hybrid Luxury Car SUV Truck Van
$1,369 $1,454 $1,618 $1,259 $1,361 $1,224




Keep a clean driving record


It goes without saying, but staying out of legal trouble is a great way to avoid an unnecessary increase in your premium. As most accidents and violations are chargeable for 3 years, you should exercise immense caution and take advantage of ridesharing services whenever possible to avoid any accidents, citations, and DUIs.


Average Increase in Annual Premium in 2016

Accident/Violation Premium Increase
None
Speeding 11 - 15 MPH Over Limit $141
Speeding 16 - 20 MPH Over Limit $153
Speeding 21 - 25 MPH Over Limit $165
At-Fault Accident $306
Reckless Driving $499
Racing $523
DUI $529




Look for Discounts


There are many discounts that can help save money as a 23-year-old. Let’s break them down.


Defensive driver discount

This discount is offered to those taking a professional driving course. It's aimed at making you a smarter and better driver. Again, you would need to prove you have completed the course prior to receiving the discount.


Bundle your policies

If you rent a house or apartment, you should put your renter’s policy and your auto policy within the company in order to earn a multi-policy discount. This is a great way to reduce the number of insurance companies you have to deal with and save a few bucks. For more information on renters insurance, check out our other guide. 


Annual Savings in 2016 for Un-Bundled and Bundled Policies

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


Consider telematics

Some insurance companies use telematics and plug-in devices to create a more accurate insurance premium. This is typically known as “usage-based insurance” and is a growing trend for insurance companies.





Summed up: Being 23


Car insurance in your 20s is mostly about transitioning out of your parent’s policy and onto your own. Using the data we collected from the top 5 companies across the US, you should begin your search for car insurance with Progressive and Geico. Considering our other suggestions, such as keeping your grades and credit score up, there are ways to keep your premiums low. And, as always, you should shop around for car insurance every 6 months to make sure you’re getting the best rate. Do that here with us.




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Methodology by Company Analysis


We randomly selected 5 zip codes in 5 different areas across the US by using the 5 most popular companies in the US based on net premiums written. Here are the zip codes we selected:


  • Columbus, OH - 43216
  • McKinney, TX - 75070
  • Fresno, CA - 75070
  • Scranton, PA - 93722
  • Aurora, CO - 80013

With that created, we created our user profile: a 23-year-old male driver. This is the information we chose to use:


  • Joe's DOB: 08/01/1994
  • Vehicle: 2015 Toyota Carmy, owned, 12,000/year
  • Driving Record: no accidents or citation
  • Education: BA
  • Licensed at: 17
  • Occupation: Marketing Representative
  • Insurance History: 6 years with previous company, limits at 100/300/100