Cheap Car Insurance for 25-Year-Olds

You've just made it to the best insurance year of your 20s! Congrats!

What is cheap car insurance for 25-year-olds?


Turning 25 is one of the biggest years for insurance savings. On average, turning 25-year-olds saves you almost $300 a year — which is almost 3 times as much as the difference from 23 to 24 or 25 to 26! Despite this considerable savings, there are still some tricks you can use when shopping for car insurance at 25. Let’s get started.


Follow these tips to find cheap insurance at 25:

  1. Look for the right company
  2. Consider your location
  3. Improve your credit score
  4. Shop Around
  5. Look for Discounts
  6. Summary: Car Insurance for 25-year-olds




What is the cheapest company for you?


In order to really examine car insurance for 25-year-olds, we created a generic profile outlined here and checked 5 different companies across 5 different zip codes to determine the winner. And spoiler alert: it’s Progressive. Here is the overall data.


Our Findings: Car Insurance for 25-year-olds

Location State Farm All State Geico Progressive Liberty Mutual
Columbus, PA $861 $974 $487 $571 $1,932
McKinney, TX $1,048 $1,631 $874 $896 $2,760
Fresno, CA $1,345 $710 $746 $866 $1,344
Scranton, PA $1,015 $1,150 $719 $550 $1,554
Aurora, CA $1,443 $1,070 $1,594 $1,151 $2,658
Average $1,142 $1,107 $884 $807 $2,050

Just as a heads up, our driver profile likely won’t match yours. Because of this, you should use our data as a base and shop around as much as possible. 





Why does your location matter?


Your insurance premium is calculated based on your zip code but is regulated by your state. Meaning, your state and your zip code play a big role in what you pay for auto insurance. If you live in an area near the coast, such as in Louisiana, you can expect the threat of floods to cause your premium to be higher.

If you live in Michigan, your state’s No-Fault insurance system and high requirements of Personal Injury Protection will unfortunately cause your premium to be quite high.


Annual Premium for the Most Expensive States

State Premium
Louisiana $7,238
Michigan $5,788
Texas $5,277
Delaware $4,579
California $3,924




Why does your credit score matter?


In addition to your age and driving record, your credit score is a major contributing factor to your premium. Drivers with a high credit score, specifically above 823, pay half as much for car insurance than drivers with a poorer score (less than 524). This is because insurance companies see drivers with lower credit scores as more likely to file more and pricer claims.


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




Why should you shop around?


Because there are many variables that go into your insurance premium, it’s important to look at different companies every 6 months. When you have a birthday, get a new vehicle, or experience another life event, you should look at these moments as great opportunities for new insurance savings. 





Which discounts should you consider?


While many people are going through different life changes at 25, there are some overall highlights we can offer.


Good student & Defensive driver

On average, 25 is the last year you can qualify for these discounts. The former entails being a full-time student and having above a 3.0 (B) GPA. The latter requires taking a professional driving course which your insurance company must pre-approve for the discount to qualify


Average Savings for Good Student and Defensive Driver Discount by Gender

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

Bundle your policies

If you’re living on your own, you must likely have a renters insurance policy. If you do, you should bundle both of your insurance policies together to get the coveted multi-policy discount.


Average Savings by Bundling by Dwelling

Renter Homeowner Renter w/ Multi-Policy Homeowner w/Multi-Policy
$1,323 $1,292 $1,250 $1,181

Good driver discount

A good driver discount, while it varies by company, is automatically added to your policy when your premium is calculated. In addition to the discount, which can be around 5%, you are released from the burden of citations and violations on your policy. As you can see below, these can be quite expensive.


National Average on Violation Increases 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

Consider telematics

Companies are being to use telematics to determine your premium through the concept of “usage-based insurance.” Basically, a plug-in device monitors your driving habits in order to determine a more personalized premium. If you’re a safe driver but other variables (such as your credit score, for example) have been increasing your premium, this may be a good option for you.





Summed up: Car Insurance at 25


Being 25 is a pretty big milestone for car insurance. You officially hit the biggest year of savings, but still have a lot of room to save. Starting your search with Geico and Progressive, as well as considering our discount suggestions, keeping your credit score up, and shopping around for car insurance every 6 months are great ways to save.


Ready to start comparing?

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Methodology


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


Next, we needed to create the profile of the 25-year-old driver. Here is the information:


  • DOB: 08/01/1992
  • Vehicle: 2015 Toyota Carmy, owned, 12,000/year
  • Driving Record: no accidents or citation
  • Education: BA
  • Licensed at: 17
  • Occupation: Marketing Representative