The cheapest car insurance companies for new drivers are Travelers, USAA, and Geico, according to WalletHub’s analysis. New drivers can save as much as 319% by choosing the cheapest car insurance companies over the most expensive options, so it is very important to shop around.
New drivers usually pay more for car insurance than mature drivers with more experience, but it’s still possible to get a good deal on your coverage. The key to finding the best cheap car insurance for new drivers is to compare quotes from multiple companies.
Best Cheap Car Insurance Companies for New Drivers
Travelers: Cheapest
Travelers Insurance
Travelers Insurance
Travelers has the cheapest rates for new drivers, on average, according to WalletHub’s analysis. A minimum coverage policy from Travelers for a new driver costs $1,372 per year on average. Travelers also offers 12 total discounts, many of which new drivers may be able to qualify for. For instance, Travelers offers a driver training discount for new drivers who successfully complete an approved driver education course.
USAA: Best for the Military
USAA Insurance
USAA Insurance
USAA is a very affordable option for new drivers who are military service members, veterans, or relatives of members, with an average policy costing $1,384 per year for new drivers. USAA also offers several discounts that new drivers may be eligible for, such as its good-student discount for new drivers still in school and its driver training discount for new drivers who take a basic driver training course.
Geico: Best for Usage-Based Insurance
GEICO
GEICO
Geico offers a combination of low prices, 23 possible discounts, and varied coverage options, making it a great choice for new drivers. New drivers can also get a 15% discount on their policy just for enrolling in Geico’s usage-based insurance program, called DriveEasy, which promotes and rewards safe driving behaviors. Additionally, WalletHub editors rank Geico highly for its streamlined claim process.
State Farm: Best for New Drivers Under 25
State Farm
State Farm
State Farm is the largest auto insurance company in the United States, and it’s a widely available option for new drivers. The company also offers numerous money-saving options for first-time drivers, such as its Steer Clear program for new drivers under 25 years old, as well as discounts for getting good grades in school and completing an approved driver education course.
Mercury: Good for Handling Claims
Mercury Insurance
Mercury Insurance
Mercury is a great choice for new drivers looking for affordable coverage in the 11 states where it operates. Mercury does not offer as many possible discounts as other companies, but its rates are already competitive, with a policy costing an average of $1,648 per year for new drivers. Mercury also ranks above the industry average for its claim process, making things easy for new drivers.
Best Cheap Car Insurance Companies for New Drivers Comparison
| Company | Average Cost | WalletHub User Rating |
|---|---|---|
| Travelers | $1,325 per year | 1.4 |
| USAA | $1,384 per year | 2.5 |
| GEICO | $1,484 per year | 1.6 |
| State Farm | $1,573 per year | 2.9 |
| Mercury | $1,648 per year | 1.8 |
| Grange | $1,776 per year | 4.2 |
| Progressive | $1,780 per year | 2.4 |
| Auto-Owners | $1,800 per year | 2.2 |
| AAA | $1,931 per year | 2.0 |
| Allstate | $2,349 per year | 1.5 |
The companies above are the best car insurance companies for new drivers, especially teens, since teens are usually what most people picture when they think of new drivers. Many of these companies, such as Travelers, USAA, and State Farm, are also some of the best companies for all new drivers under 25 and the best car insurance companies in general since they offer affordable coverage options and numerous discounts.
Average Cost of Car Insurance for New Drivers
The cost of car insurance for a new driver depends mostly on their age. On average, a policy for a 16-year-old driver costs $3,192 per year. Premiums are usually the highest for teenagers compared to other age groups, but good drivers will see their rates drop by 12% to 20% once they turn 25 years old.
| Age | Average Rate |
|---|---|
| 16 | $3,192 per year |
| 17 | $2,647 per year |
| 18 | $2,325 per year |
| 19 | $1,623 per year |
| 20 | $1,569 per year |
| 21 | $1,217 per year |
| 22 | $1,094 per year |
| 23 | $1,013 per year |
| 24 | $952 per year |
| 25 | $815 per year |
Learn more about average cost of car insurance by age.
Who Is Considered a New Driver for Insurance Purposes?
Insurance companies will consider any person who is getting their driver’s license for the first time a new driver. While teens are often what comes to mind when people think of new drivers, you can be a new driver at any age, as you can see in the list below.
Examples of New Drivers
- Teens who recently got their driver’s license
- Adults who start driving later in life
- Immigrants who are new to driving in the U.S.
Due to their lack of driving experience, these new drivers are considered high-risk by insurance companies. If you are new to driving, most car insurance companies won’t classify you as a good or safe driver until you have gone 3-5 years without any accidents or violations.
How to Get the Best Cheap Car Insurance as a New Driver
1. Shop around for coverage
Each car insurance company has its own method of calculating insurance premiums, so the first quote you get might not be the lowest price available. In general, it’s a good idea to get quotes from three different insurers before purchasing coverage.
For new drivers getting car insurance for the first time, it’s important to consider not only the company’s price, but also its coverage options, available discounts, and overall reputation. Even after you’ve bought your policy, you should still compare quotes every 6-12 months to make sure you’re getting the best deal.
2. Consider joining an existing policy instead of purchasing your own
Adding a teen driver to an existing car insurance policy raises the policyholder’s premiums by an average of 140% to 160%. But considering how expensive car insurance is for new drivers, this might be a more cost-effective option than having them purchase their own policy.
3. Look for discounts
Most major insurance companies offer a variety of discounts for young drivers who are new to the road. For example, good student discounts allow high school and college students to save if they have at least a “B” grade point average. Young drivers can also get a discount if they attend school at least 100 miles away from where the insured car is garaged.
4. Purchase less coverage
You should always purchase as much car insurance as you can afford in order to minimize risk. But if you’re struggling to find an affordable policy, you should think about what types of coverage you actually need. If you decide that you don’t need additional types of coverage like collision or comprehensive, you could save on your premium by only purchasing the minimum amount of car insurance required by your state. You can also decline optional coverage add-ons like rental reimbursement insurance and roadside assistance.
5. Choose a higher deductible
One quick way to lower your rate is to raise your deductible, which is the amount that you’re responsible for paying if you file certain types of claims. The higher your deductible, the lower your premium will be. But you should avoid choosing a deductible that’s more than you can afford just so you can get a lower rate.
6. Stay safe on the road
As a new driver, the best way to lower your rates long-term is to avoid moving violations and at-fault accidents. Once you’ve had a few years of safe driving experience, your rate will gradually go down.
Video: Cheapest Car Insurance for First-Time Drivers
Methodology
WalletHub’s analysis of the cheapest car insurance companies for new drivers is based on data from the state DMVs and Quadrant Information Services. Using that data, WalletHub compared quotes for drivers aged 16-25 years old with a clean driving record, minimum coverage, and good credit.
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