Car insurance for a 21-year-old costs $2,400 to $3,000 per year on average, according to various estimates. That’s roughly $1,000 more than the average U.S. driver pays. Insurers charge more to cover young drivers because research shows they are more likely to be involved in car accidents. Also, since young male drivers statistically have more accidents than young female drivers, a 21-year-old male is likely to pay several hundred dollars more per year for car insurance than a 21-year-old female.
If you’re 21 and you’ve had your insurance for a couple of years, you should notice that the price goes down each year. The good news is this will continue until premiums start to level off around age 30. If your budget is suffering now, however, there may be things you can do to reduce your rates.
Ways to Reduce the Cost of Car Insurance for a 21-Year-Old
- Check if you can be covered under your parents’ policy if you live at home or are in college.
- Keep your grades up to a 3.0 (B) average or better for a good-student discount of about 7%, depending on the insurer.
- Ask about a safe-driver discount if you’ve had your license and a clean driving record for at least 3 years. This could save you 5%-10% (20% by state law in California).
- Evaluate your coverage needs. The average annual cost for state-mandated minimum liability insurance is only about $875 for a 21-year-old. If you drive an older car, minimum coverage may be all you need.
- Consider delaying a new car purchase until after you turn 25 years old, when you’ll see a major drop in your insurance rates.
Be sure to compare quotes among companies, as rates and discounts for young drivers vary from insurer to insurer. The General and Esurance tend to offer some of the best rates to younger drivers, including 21-year-olds, according to WalletHub's research.
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