Whether you're a teen or a late bloomer to the world of driving, we've got you covered.
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.
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.
|Car Insurance Provider||Average Annual Premium|
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.
|Car Insurance Provider||Average Annual Premium|
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.
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.
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.
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 Type||Savings Amount|
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.
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.
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 Device||Average Annual Premium||Discount|
|Passive Disabling Device||$1,312||$10|
|Electronic Stability Control||$1,318||$5|
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.
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.
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.
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.
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.
If you're looking for additional resoures regarding car insurance as a new driver, see our related articles below.
Will my insurance company cover someone not on my policy?
I was teaching my younger sister to drive and she crashed into a car while turning left. As she does ...
What do I put in a quote if I don’t have a credit history
I’m a young and new driver and don’t have established credit history. What do I put in the credit question ...
Can I go to jail for driving without insurance?
Would you go to jail from driving without insurance? I’m 17 and just got my license, but I don’t really ...
At what age does car insurance decrease?
When does car insurance get lower? I’m a newly licensed driver. I’ve only had my license for 4 months and ...
We’ll start with the bad news: your driving record is forever. Any conviction for a speeding ticket or other moving...
If a cop hands you a ticket for speeding, swerving in and out of lanes, or causing a crash, you’re...
Speeding tickets: the source of stress and financial setbacks (fines, points, insurance increases), occasional bragging rights (ever gotten out of...
A traffic ticket of any kind is bad enough—the extra money, the time spent in traffic court or diversion, the...
There are these very distinct stages upon being pulled over by a police officer. Once those colorful, bright (blinding, even)...
Kind readers of Quoted, I have a confession to make. In my short six years as a driver, I have...
The very first speeding ticket was awarded to a lead-footed New York City taxi driver on May 20, 1899, just...
It’s a nightmare shared by every driver: You’re cruising along, maybe in a bit of a hurry. You glance down...
It can be tough out there on the road. That’s why we’re bringing you 12 ways to avoid a speeding...