Cheap Car Insurance for Young Adults

Becoming an adult is kinda terrifying — so let us handle the insurance

What is car insurance as a young adult?


Your roaring 20s are exactly that — full of turbulence with highs and lows, wins and crushing losses. You’re just starting to get figure out who you are and what you want to do with your life. During this time, insurance is probably the last thing on your mind. Still, as you age throughout your 20s, you evolve from a youngster to a responsible adult in the eyes of your insurance company. Whether you stay on your parents' policy or venture out onto your own, the road to perfect coverage with the perfect price is a windy and pretty confusing. So let's explore the best ways to save on auto insurance in your 20s together. Starting first with which company is the cheapest.



Spoiler Alert: It's Progressive.



What is cheap car insurance in your 20s?


  1. Which company is the cheapest for me?
  2. Do life changes affect my insurance?
  3. How can I save?
  4. Your 20s: summarized




What is the cheapest company for 20-somethings?


In order to really unravel which company has the cheap premiums for 20-somethings, we created a user profile outlined here and examined 5 companies across 5 zip codes in the US. Keeping all other metrics the same, we discovered that Progressive had the cheapest rates, which Geico in a close second. Here are our overall results.


Our Findings: Car Insurance for 25-year-olds

LocationState FarmAllstateGeicoProgressiveLiberty 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

You should consider, however, that the profile we used most likely won't match you — as you most likely don't live in the zip code we outlined or you might not be the age we surveyed. Still, you should use our data as a reference when shopping for car insurance. We suggest beginning your search with Progressive and Geico.






How your life affects your policy


There are some gray areas with your car insurance in your 20s. You’re in that time of your life when you have one foot in the world of adulthood and independence, and another foot still at your parent’s house. Insurance, in all its forms, is mirrored to reflect you and your assets. Meaning with every major life event, your insurance is probably going to wiggle a little bit as well. Let's break down some of the ways you can expect your insurance to change and what you should do about them.


Do you even need your own policy?


Yes
No
In simplest of terms, you need to your own policy if you are living outside of your parent's residence and drive a vehicle. Because insurance is zip code specific, living with your vehicle (even if it's in the same city) doesn't allow your insurance company to anticipate the risks they would use to calculate the premium.You don't need to get your own policy if you don't drive a vehicle regularly or if you still live with your parents. If you're away at college (usually more than 100 miles away) but don't drive, you should speak with your insurance company about a Student Away From Home Discount.



Living with Roommates?

It’s pretty common for 20-somethings to have roommates, but not everyone knows exactly how this affects your car insurance. Most insurance companies have ardent stipulations regarding your roommates: they either need to be on your car insurance policy or they need to be excluded entirely. Because you and your roommate share a space and share responsibilities, they see the likelihood of sharing vehicles to be high and thus want to be compensated for that shared risk.

So, if you’re living with someone else, either add them to your policy (or you to theirs) or exclude them. In terms of excluding someone from your policy, some insurance companies will require you present them with documentation that shows they have outside insurance. Others will just take your word for it. For more information on the ins and outs of car insurance with roommates, look no further.



Getting Hitched

After you get married, make sure you inform your insurance company and add your significant other to your policy if you haven't already. This will help with simplifying car insurance in several ways. One, you will see an automatic decrease in your premium. By updating your marital status from single to married, you can expect a decrease in your car insurance premium by about $74/year.

Secondly, it's just easier. As we stated, if they’re not on your policy already you’ll have to exclude them — meaning, anytime they would use your vehicle they would be driving essentially without insurance. This can come back to bite you if you need to switch vehicles, or if you’re unable to drive and need their help. Plus, one bill! Easy and simple. If you have other questions about being married and your car insurance, check out our guide.


National Average of Car Insurance By Marital Status

SingleMarriedDivorcedWidowed
$1,323$1,249$1,320$1,297


Buying a house

Entering the realm of homeownership opens up a lot of doors for the insurance possibilities. Just like getting married, buying a home can decrease your car insurance policy for two reasons. One, if you bundle your home and auto with the same company, you will receive a handy multi-policy discount. Second, insurance companies view homeowners as more financially stable than renters and thus reward that stability with a decreased premium.


Savings for Homeowners

RenterHomeownerHome/Auto Bundle
$1,323$1,292$1,181




How else can you save on auto insurance?


Aside from your teen years, your 20s will be the most expensive time to insure your car. Young and inexperienced drivers are considered liabilities for insurance companies and thus are charged higher than other drivers. Still, you can compensate these charges in a couple of different ways.


Consider a defensive driving course

If you're under 25, taking a defensive driving course can save you a few bucks on your auto policy. To an insurance company, drivers who have taken a professional driving class are less likely to receive citations or file claims. All of which means you appear to be a better client for them — i.e., less premium!



If you're a student, keep your grades up

If you're under 25 and have above a B average, your insurance company will often reward you with a discount (dependent on proof). Coupled with a defensive driver discount, drivers in their 20s can save an average of $122 per year!


Average Savings for Good Student and Good Driver Discount

MaleFemale
$153$90

Bundle all insurance policies

If you rent an apartment or own a house, use one insurance company for both. Bundling your auto/renters policy or auto/home with the same company can save you hundreds a year on your auto insurance. Plus, it keeps all your bills within the same company.


National Savings for Bundling

RenterHomeowner
$73$142




Your 20s: Summed up


While you shouldn't spend too much of your 20s concerned about car insurance, the complexities of this time can create some gray areas. All kinds of major life decisions will affect you and insurance rates: whether or not you need your own policy, adding a roommate to your polciy, and even tying the knot. Still, starting first with Progressiveand Geico as well as our other suggestions are great ways to find some savings.




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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


Recent Questions:

Cheap Car Insurance for Young Adults

Does the name on the title affect car insurance rates?

Jan 17, 2019
Bellmawr, NJ

Will our insurance rates go up if I title the car in my son’s name? He is on my insurance ...

Can I get insurance on just my driver’s license

Aug 30, 2018
Bakersfield, CA

I’m 25 and I’m new to everything and wondering how to get insurance when I don’t have a car....

Should I drop my 25yo son from insurance?

Aug 01, 2018
Denver, CO

My 25-year-old son totaled one of our vehicles. If we drop him off our ins can we reduce/save major premium ...

How do I get points on my license in CA?

Jul 25, 2018
Long Beach, CA

Two questions, really. First, should I file a claim? I recently dented my driver car door by hitting a pole ...

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