Cheap Car Insurance for New Drivers

Whether you're a teen or a late bloomer to the world of driving, we've got you covered.

How much is car insurance for a new driver?


New drivers are among the most expensive drivers to insure because they do not have any insurance history or driving experience. Both of which means they're risky drivers to an insurance company. An insurance company uses your risk profile, determined through a number of different rating factors, to determine your what you pay for car insurance. Thus, the riskier you appear, the more you will pay towards your auto insurance premium. Still, there are some ways you can save as a new driver. Let's explore.


How to get cheap auto insurance without prior coverage
  1. Cheapest companies for new drivers
  2. What are some ways to save on new driver auto insurance?
  3. Additional resources




Cheapest car insurance companies for new drivers


A "new driver" is defined as someone with no driving history or insurance record. This can include newly licensed teenagers, people who got their licenses later in life, or foreign drivers new to the US. Each of these drivers will face a similar challenge when it comes to finding cheap car insurance.

In order to get car insurance estimates for this type of driver, we used two user profile (methodology outlined here). One driver is a teenager on their parent's policy and another is a driver 30-year-old driver previously uninsured. Broken down below, you can see how much car insurance is woth no driving history.


ANNUAL INSURANCE PREMIUM FOR 16-YEAR-OLDS MALES
Car Insurance ProviderAverage Annual Premium
Allstate$8,168
Farmers$8,166
GEICO$4,487
Liberty Mutual$7,088
Nationwide$3,852
Progressive$10,846
State Farm$7,322
USAA$4,056

As you can see, it is very expensive to insure a 16-year-old. While this premium does decrease significantly after young drivers turn 20, they are still paying nearly 100% more than the average driver in the US. The biggest reason for this is their lack of driving experience. Coupled with teen drivers poor driving decisions (driving too fast and making poor driving decisions), car insurance companies charge higher premiums to protect themselves from probable claims.

Most 16-year-olds are on their parent's insurance policy so the data presented above is a little skewed. Still, if you're looking for the cheapest car insurance for a new teen driver, you should begin your search with USAA and Geico.

If we look at the next category of new driver, an older driver who simply got their premium much later in life, we can see a similar pattern.


ANNUAL INSURANCE PREMIUM WITHOUT AN INSURANCE HISTORY
Car Insurance ProviderAverage Annual Premium
Allstate$5,272
Farmers$4,981
GEICO$2,935
Liberty Mutual$4,518
Nationwide$2,575
Progressive$6,460
State Farm$4,468
USAA$2,566




How to save on car insurance as a new driver


Now that we have outlined the top carriers as well as how expensive it is to insure a new driver, let's talk about some ways to save.


Stay on your parents' auto insurance

If you’re a new teen driver, the best way to get cheaper car insurance is to stay on your parents' plan. Your parents' insurance background and driving history will probably earn lower rates than you'd find on your own. By staying on your parents' auto insurance policy as long as possible, you can save you thousands of dollars per year.


Look for discounts

There are a lot of discounts in the auto insurance world. Many are subject to state and insurer restrictions. Below we have listed some common ones discounts. Keep in mind, having a lot of discounts on your car insurance policy is not going to cut you premium in half. However, they can be helpful.



Below you can find further explanation regarding these discounts.


Multi-policy discounts

You can become eligible for a multi-policy discount by carrying multiple policies with one insurance company. Common policy combinations are home-and-auto or renters-and-auto. These discounts may be applied to both policies. The discount you receive may vary depending on your coverage combination. For example, you'll receive more of a discount for bundling homeowners and auto policies than by adding a renters' insurance policy to your auto coverage. The logic is simple: a homeowners policy brings in much more revenue for an insurer than does renter's insurance.

Residence TypeSavings Amount
Renter$77
Homeowner$137
Condo Owner$120


Multi-car discount

Similar to a multi-policy discount, a multi-car discount refers to insuring more than one car with a single company. The discount is automatically added either at policy inception — if two cars were insured from the start — or upon addition of a second vehicle to the policy.


Defensive driving discount

This discount entails taking a defensive driving course and presenting your insurance company with proof in the form of a receipt or transcript. The logic behind this discount is clear: defensive driving classes make you a safer driver, which makes you less risky, i.e., cheaper, to insure.


Equipment discount

If your car comes with an anti-theft device — or if you utilize a service like Lojack — your insurance company may throw in a discount. The discount tends to be smaller than a multi-policy or defensive driver bonus, but every little bit helps. Anti-theft devices are commonly built into modern vehicles. Just be sure any security devices are taken into account when your quote is generated.

Safety/Anti-Theft DeviceAverage Annual PremiumDiscount
None$1,323
Passive Disabling Device$1,312$10
Tracking Device$1,314$9
Audible Alarm$1,317$6
Electronic Stability Control$1,318$5

Good driver discount

This discount is available if you have a clean driving record — meaning no accidents or citations. This valuable discount is often added to your policy when your Motor Vehicle Report is pulled at the inception of your policy. If you're convinced you have a clean driving record and are not receiving a discount, contact your insurance company and inquire about a good driver discount.


Profession/occupation discount

This discount goes by several names, but the idea is simple. Some insurance companies will give you a discount based on your occupation. Statistically, occupations such as teachers, physicians, or police officers are less likely to file a claim. An insurer will typically require proof of profession — a photocopy of your degree is a common request.


Good student discount

If you're still under 25 and have the grades (typically a 3.0 GPA or better), speak with your insurance company about a good student discount. Normally, they’ll ask for a transcript every 6 to 12 months as proof of your continued good standing.



Chose a moderately priced vehicle

The value and other characteristics of your vehicle contribute to your insurance premium. Picking a luxury vehicle comes with an additional cost — higher insurance premiums. This is especially true for new drivers. An inexperienced driver with a new pickup truck or a Mercedes-Benz is a major liability to an insurance company. If you're a new driver looking to save money, get your feet wet with an older vehicle.



Pick the best insurance company for new drivers

At the end of the day, all the discounts in the world won’t matter if you choose the wrong company. Some insurance companies will see your age and driving background as too great of a liability and apply exorbitant premiums. Shop around every six months to ensure you’re getting the best rate for your driving profile.




Shop for car insurance today — compare rates!




Additional resources


If you're looking for additional resoures regarding car insurance as a new driver, see our related articles below.

Best cheap car insurance
Best car insurance for teens
Best cheap car insurance for young male drivers
How to get car insurance with no license

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