Cheap Car Insurance for 24-Year-Olds

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What is car insurance for 24-year-olds?


Becoming 24 is the first step into the semi-daunting milestone of your mid-twenties. While you’re only one year away from the big year of insurance savings, you are still paying an average of $1,528 per year on auto insurance — over twice the national average! Understandably, this makes the need for insurance savings to be quite urgent. Because it may seem like a daunting task, we decided to create the best practices for car insurance at 24. Starting first with which company you should choose. 


(Shhh, spoiler alert: it’s Progressive.)


How can I find cheap car insurance at 24?

  1. Choose the right company
  2. Think about your location
  3. Pay attention to your credit score
  4. Cash in on your education
  5. Chose a moderate vehicle
  6. Shop different companies
  7. Look for Discounts
  8. Summary




What is the cheapest company for you?


Cutting right to the key question — which company is the cheapest — we decided to sample 5 companies across 5 zip codes using a profile outlined here. Now, as our profile states, we surveyed a 23-year-old so you should consider this data as a starting point. Moreover, our profile is simply a generic base.


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




Why does your location matter?


Insurance is regulated by the laws of your state and calculated by your zip code, which means it's location dependent. If you live in a state with high insurance regulations, such as Michigan, you can expect your insurance premium to be high regardless of the company you chose. Furthermore, if you live in a zip code that is in a coastal region, you can expect the threat of flooding to cause your premium to be higher.


Annual Premium for the Most Expensive States

State Premium
Louisiana $7,463
Michigan $6,111
Texas $5,662
Delaware $4,707
Kentucky $4,098

Sometimes, it’s not your company that determines your rate but rather where you live.





Why should you think about your credit score?


There are many things that affect your car insurance premiums but your credit score is a significant rating factor. Insurance companies see drivers with poor credit (524 or below) as more likely to file a claim than drivers with above an 823 credit score. What’s more, the claims they file are more likely to be costlier than claims filed by drivers with higher scores.


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

However, some states feel this practice is discriminatory and feel your driving history with annual mileage are better indicators of your driving behavior. Just another reason why your location matters!





How does your education impact your insurance?


Similar to your credit score, insurance companies see higher amounts of education as a risk-reducing factor and thus will lower your premiums. Unlike your credit, however, the difference is rather minimal. Drivers with no high school diploma pay only an average of $36 more per year than those with degrees.


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




Why should you choose a moderate vehicle?


If you end goal for shopping for car insurance is to save money, you should think about the impact of brand new BMW will have on your premium. Vehicles with a high MSRP will result in a higher premium as your insurance company needs to reduce their financial exposure.


Average Annual Premium Based on Car Type in 2016

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




Why bother looking at other companies?


Because your rate is dependent on many components to your driving profile that change, you should be continually looking for car insurance every 6 months. When you celebrate a birthday, change vehicles, or experience another major life event, you should remember to shop for car insurance.





Look for Discounts


In addition to following our steps above, there are some additional discounts you should think about. Let’s get to it.


Good driver discount

This discount is automatically added to your policy when you are quoted using your driver license number. In addition to receiving a discount for your driving record, you should avoid the premium increases that come from a driving citation or incident listed below.


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

Bundle your policies

Putting your renter's policy within the same company can save you money! Renters insurance policies cost around $150 a year and cover your liability and your belongings in the event you are found liable for damages or your belongings are destroyed. Find more information on renters insurance here.


Annual Savings in 2016

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

Good Student and Defensive Driver

Drivers who are under 25 are eligible for these discounts as long they have proof. In order to qualify for the good student discount, you must have a GPA above a 3.0 (or B average). For the latter, you need to have taken a pre-approved course and provide proof that you have taken the course. While the amount of these discounts decrease as you age, you can see an average savings of $107 per year!


Age Male Female
23 $151 $88
24 $135 $78
25 $17 $17




Summed up:


While turning 24 means you’re into your mid-twenties, you still pay quite a bit more than others in the same age bracket. Starting your search with Progressive and Geico are great ways to get the ball moving but be sure to pay attention to your financial health and your location, as well as shopping around every 6 months.




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Methodology for our Company 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:


  • 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