The Best and Cheapest Car Insurance for New Drivers
If you recently got behind the wheel but you’re finding the high costs of car insurance for new drivers discouraging, you came to the right place. We’ll help you find the cheapest high-quality company for your profile.
For starters, we got quotes for drivers aged 16 to 21 from all the major auto insurance companies to determine which ones offer the lowest prices. Then we studied the leading rankings in customer service and financial strength to establish the most reliable insurer. Finally, we made a list of tips and tricks that should help you cut your insurance expenses by up to 40% no matter which company you choose.
So dive in to find the perfect coverage for your needs.
The Best Insurance Companies for New Drivers
The Best Overall: Geico
Given how expensive decent coverage for new drivers is, we put a lot of weight on affordability. When we applied this criterion, Geico and Progressive stood out as the leading companies. And since Geico performed slightly better overall, we decided to rank it as the finest option.
First of all, Geico’s financial strength is outstanding. The company’s A. M. Best rating is “A++,” or “Superior,” which is the highest possible. Additionally, Geico is a subsidiary of Berkshire Hathaway—the fourth-ranked enterprise on the 2019 Fortune 500 list. This means you can even cover a luxury car like an Audi or an Acura without worrying that Geico can’t pay your claim.
Second, we assume that those looking for new driver insurance are tech-savvy customers, and they’ll be thrilled with Geico’s website and mobile app. They’re slick, fast, and user-friendly. You can get an online quote, submit a claim, or download proof of insurance in a breeze.
Third, like all prominent insurers, Geico offers a substantial number of discounts and optional coverages.
Nonetheless, while we do think Geico is the best insurance for new drivers, it has a couple of noteworthy downsides. First, the company doesn’t offer GAP insurance. Second, like all insurers with a large market share, Geico receives mediocre customer service ratings. It got three out of five stars in J.D. Power’s 2018 Claims Satisfaction and Insurance Shopping studies on a national level. However, insurers that scored better in customer service were either very expensive or not available nationwide. Choose Geico for affordable policies, first-class financial strength, and polished online tools.
Look elsewhere if you want excellent customer service or GAP insurance.
The Runner-Up: Progressive
Like Geico, Progressive is among the cheaper car insurance options for first-time drivers. And its similarities with our overall winner don’t end there. Progressive also has an excellent website and a mobile app, average customer service, and it offers a variety of discounts and optional coverages.
However, Geico has an advantage in the financial strength department. Progressive’s A. M. Best rating is a notch below Geico’s, at an “A+.”
Nonetheless, Progressive has some tricks up its sleeve. It offers GAP insurance, and it specializes in high-risk drivers. This means that those with a couple of citations on their record will get better rates than they would with Geico.
That’s why, despite slightly lower financial strength, it’s among the best car insurance for certain types of new drivers.Choose Progressive for bargain prices and excellent online tools.
Look elsewhere if you want the most reliable customer service or the absolute best financial strength.
The Bronze Medalist: Ameriprise
Ameriprise is available in 32 US states, and it’s slightly more expensive than Progressive and Geico. However, its excellent customer service scores make it a viable alternative. In 2018’s J.D. Power regional rankings, Ameriprise took first place in California, where it writes most of its policies.
Additionally, the company provides a substantial number of optional coverages and promotions. For example, if you bought Ameriprise’s products through Costco, you’ll get extra discounts and benefits, such as free roadside assistance.
Solid financial strength also makes Ameriprise a fine choice of insurance for new drivers. Ameriprise’s A. M. Best rating is “A” or “Excellent,” the third best possible. While not as good as Geico’s, State Farm’s, or USAA’s, there’s no reason for an ordinary customer to worry about the company’s capacity to pay claims.
Overall, the combination of exceptional customer service, reasonable rates, and the added benefits for Costco customers make Ameriprise a solid alternative to our top options. Choose Ameriprise for superior customer service, sensible prices, and its perks for Costco customers.
Look elsewhere if Ameriprise is unavailable in your area or you want the lowest possible rates.
USAA is a specialized insurer that provides policies to former and current US army members and their close families. But if you qualify, the company is an outstanding choice. It offers remarkable customer service, world-class financial strength, and an extensive selection of discounts and optional coverages.
On top of that, USAA offers pretty cheap car insurance for new drivers under 25. The company even provides services such as banking and mutual investment funds.Choose USAA for its outstanding performance across the board.
Look elsewhere if you are not a member of the US army or a close family member.
Erie operates in only in 13 states, but if it is available in your area, it’s the best car insurance for new drivers under 25. It’s affordable, it’s the champion of customer service, and it has a solid financial strength rating.
The only notable downside of Erie is that the company doesn’t offer a mobile app. But if you can live without one, you’ll struggle to find a better option. Choose Erie for first-class customer service and low rates.
Look elsewhere if Erie isn’t available in your area or you want an insurer that offers a mobile app.
How Age and Experience
Affect Insurance Rates for New Drivers
We conducted research in the towns with a high percentage of young drivers to determine the average prices. We looked into drivers whose ages ranged from 16 to 21 years, and our locations included Austin, Miami, Chicago, Berkeley, New York City, and Boston.
Carsurance Reference Quote
Our reference driver was a male with a clean driving record who got his license at the age of 16. He owned a 2018 Honda Accord EX 4D and rented his home.
The liability limits we chose in our search for the average cost of car insurance for new drivers are as follows:
- Liability – $50K/$100K for bodily injury and $50K for property damage.
- Uninsured Motorist Coverage – Only bodily injury, same limits as liability coverage.
- Collision and Comprehensive – Each with $500 deductibles.
- Rental Car Reimbursement – $30 per day, $900 total.
The annual mileage we selected was 10,000, and our car was primarily used for commuting to school or university.
Unsurprisingly, we found that of the auto insurance quotes for new drivers, the most expensive are for the youngest demographics, especially 16-year-olds and 17-year-olds.
We also discovered that at the age of 18, premiums started to decline rapidly. Furthermore, we encountered some insurers—such as Geico, AAA, and MetLife—that won’t provide a policy quote for just a 16- or 17-year-old.
Premiums in Areas with a High Percentage of Young Drivers
Our average prices are based on six separate studies we conducted in large US towns and cities with a significant percentage of teenagers and students. Check the results below:
39.11% of Austin’s residents are 24 years old or younger. The city is also home to some prestigious higher education institutions such as the University of Texas at Austin, St. Edward’s University, and Concordia University.
We think that Progressive is the best insurance for new drivers in Austin. However, once you’ve accumulated more driving experience, you should check out insurers with better customer service scores, such as Amica and Auto-Owners.
Berkeley is home to the University of California–Berkeley, which is the oldest campus of the California universities. That’s why it’s not surprising that 35.7% of its residents are 24 years old or younger.
Geico and Progressive are the top options for those looking for a bargain. However, if you stretch your budget a bit and choose Ameriprise, you’ll benefit from the superior customer service.
31% of Miami’s residents are 24 or younger, and over 308,348 students attend one of the many universities in the Miami area. That’s not far from the entire population of urban Miami (463,347).
As far as cheap auto insurance for new drivers is concerned, it’s hard to look past Geico and Progressive. Amica may offer more dependable customer service, but it’s rates are just too high to justify the outlay.
New York City
With over 34.26% of its population 24 years old or younger, and with over a million students, New York has the highest concentration of new and young drivers in the US.
And if they want the best auto insurance, it’s hard to look past Erie. It’s the cheapest car insurance company in NY for new drivers, and it also offers the most reliable customer service. It’s only weakness is its mediocre online tools and the lack of a mobile app. If that’s your priority, give a chance to Progressive or Geico.
Chicago is the third-largest university town in the US, with a student population of 502,189. Additionally, 37.42% of its residents are 24 or younger, meaning lots of people are looking for affordable car insurance for new drivers.
Our advice for them is to stick with Progressive until they reach 19. Then they should switch to Erie, which ranks considerably better in customer service, and it’s even less expensive.
Cream of the crop schools such as Harvard University, the Massachusetts Institute of Technology (MIT), Tufts University, and Boston University are all located in Boston or nearby. The city also has a youthful core—36% of its total population is 24 or younger.
In our search for the cheapest car insurance in M.A. for new drivers, we found that many companies would not offer us an online quote. But of those that would, Travelers was the best for those aged 16 or 17, and Geico won out for those between 18 and 21.
5 Tips for Getting Cheap Car Insurance for New Drivers
1. Ask an experienced driver to add you to their policy.
This is one of the best hacks for new and young drivers alike to reduce their insurance expenses. If your parent or another older adult adds you as the second driver on their policy, you’ll save a lot. If you’ve been trying to figure out how to get cheaper car insurance for new drivers, this is your best bet. New research by insure.com indicates that the savings can reach as much as 60%.
We decided to test those numbers by getting quotes from Geico with full coverage limits in Fresno, California. Here are our results:
- Just a 40-year-old male driver with a 2016 Audi A4: $142 per month
- Just an 18-year-old female driver with a 2016 BMW 4 Series: $459 per month
- Both drivers with both cars: $414 per month
As expected, car insurance for new drivers is the most expensive if they’re alone on a policy. However, a policy that includes both the young driver and the experienced one proved cheaper than that with just a young driver. Furthermore, if a young driver reimbursed the premium difference for the experienced one, she would have to pay $272 per month. That would be a 40% decrease from the price if she was alone on the policy. For us, this is a no-brainer.
2. Take full advantage of the discounts.
With a little effort, you can qualify for the various discounts available to get the cheapest insurance for new drivers. First, try to select as many premium reductions that the system prompts as possible when you get your online quote. Second, if an insurer lists a discount on its website, but you didn’t see it during the quote process, feel free to call their customer service. Third, consider proactive measures, like passing an accredited training course for young drivers, to reduce your premium even further.
Here’s a list of the premium reductions young drivers should utilize:
Low Usage Discount
If you drive less than 8,000 miles a year, most insurers will grant you a 10% to 20% discount.
If you enroll in this program, your insurer will use a mobile app or a GPS device to track your driving habits. If your results are good, you can save up to 50%. Be careful, though—some insurers may raise your premium.
This is an excellent way to get cheap insurance for new drivers. If you’re a student, and your GPA the previous semester was 3.0 or higher, you’ll save anywhere from 10% to 25%. Keep in mind that you’ll need to deliver your academic records as proof to your insurer.
If you insure multiple vehicles or buy a home or life insurance policy from the same company, you’re bound to save.
Student Away at School
If you’re a driver who goes to a university that’s 80–100 miles from where the car is garaged, you can save substantially.
Getting additional drivers’ education is an excellent way to qualify for affordable car insurance for new drivers. Not only will you get a discount right away, but you’ll improve your car-insurance-buying prospects for some time to come.
A TeenSmartDriving program certificate, which you can get online, is a solid choice. It’s recognized by Erie, MetLife, Allstate, The Hanover, and Liberty Mutual, among others.
3. Shop around.
As you probably figured by our quote comparison and company ratings, the prices and quality of car insurance vary significantly across the market. That’s why a little bit of research can get you the lowest car insurance rates for new drivers.
However, while guides like this are a good starting point, a quote comparison is something that, in the end, you’ll have to do by yourself. That’s because insurance quotes are highly personalized. Your profile may be substantially different from our reference driver, meaning you’ll get vastly different rates.
Nonetheless, some factors don’t vary from buyer to buyer, such as a company’s customer service ratings or financial strength. That’s why we would suggest you check out our car insurance reviews and make a list of what you think is the best car insurance for new drivers. We suggest including at least five insurers.
Then get a quote, online or by phone, from all of them. The whole process shouldn’t take more than a couple of hours, and it could save you hundreds or even thousands of dollars.
4. Drive an older, less expensive car.
Comprehensive and collision coverages pay for the expenses of repairing your car regardless of who was at fault. If you carry these coverages and your car is a newer, more expensive model, your premium will be substantially higher. That’s why opting for an older but still safe and reliable vehicle is a smart way to get the cheapest auto insurance for new drivers.
5. Increase your collision and comprehensive deductibles.
Some car insurance guides would advise you to ditch comprehensive and collision altogether, or reduce the liability limits, but we wouldn’t. After all, the purpose of insurance isn’t just to satisfy a legal requirement—it’s to provide the peace of mind that comes from knowing you’re protected.
Instead, increasing the collision deductible to $1,000 or even $2,000 may be a handy opportunity for some to save. However, keep in mind that you’re essentially trading elements of your coverage for a lower price. We still think it’s more prudent to spend more time comparing car insurance quotes for new drivers and finding a cheaper insurer overall.
What Policy Limits Do New Drivers Need?
For starters, a young driver will have to buy a policy with their state’s minimum coverage. It will likely include the following:
Liability Auto Insurance
This pays for any bodily injuries and property damage you’ve inflicted on others in an at-fault accident. It may include other coverages as well. The minimum limits are very low in most states, and increasing them won’t jack your rates up much. That’s why we suggest $50K/$100K in bodily injury coverage and $50K in property damage.
However, there are usually a few more mandatory coverages when it comes to auto insurance for new drivers—as well as experienced ones.
Uninsured/Underinsured Motorist Coverage
This covers the injuries inflicted by a driver with insufficient insurance or no insurance at all. It’s a relatively inexpensive insurance plan, and no insurer will let you choose limits higher than your liability coverage. That’s why $50K/$100K limits are a no brainer.
In states that have a no-fault insurance system, you’ll have to buy the following:
Personal Injury Protection
This reimburses any lost wages and the treatment of any injuries to you and your passengers, regardless of the fault. This coverage can be quite expensive, but your since it’s your health and well-being at stake, we suggest buying higher limits whenever possible.
In addition to the previous mandatory coverages, there are few optional ones that those looking for the best car insurance for young adults should consider:
If your car gets damaged in a covered accident, collision insurance pays for the expenses regardless of who was at fault. It always carries a deductible, and it takes the largest portion of your premium, together with liability.
This coverage is often bought with collision. It reimburses any damage to your vehicle that didn’t come from an automobile accident. For instance, it includes vandalism, natural disaster, fire, theft, falling objects, etc.
Medical Payments Coverage
It’s an optional coverage that’s available in states without the no-fault system. It functions similarly to PIP, but it only pays for medical expenses without reimbursing any lost salaries.
Since your regular health insurance may cover you in some cases, we advise doing a little bit of research before opting for MedPay coverage. Check the list of forms and endorsements in your health insurance policy. If there’s an exclusion for vehicle-related payments, MedPay may be worth getting. Nonetheless, even if you don’t buy this coverage, you can count on bodily injury liability insurance to help you.
Frequently Asked Questions
1. What is the best insurance for new drivers?
We think that full coverage insurance—with $50K/$100K liability limits, and $1,000 collision and comprehensive deductibles—is the optimal insurance for younger customers.
As far as which company is the best, our vote goes to the quartet of Geico, Progressive, Erie, and Ameriprise. The first two offer bargain prices, while the latter two offer outstanding customer service at reasonable rates.
2. Who has the cheapest car insurance for new drivers?
This depends on the city you live in and your profile. However, you can bet that Progressive, Geico, and Erie will be among the cheapest whichever way you cut it.
3. What’s the cheapest way to insure a new driver?
The most affordable way to insure a new driver is to list them on a policy belonging to a more experienced driver. By doing so, it’s possible to save up to 40%.
Additionally, many experts agree (including us) that this is also the best way to get auto insurance for new drivers.
4. How much does it cost to insure a new driver?
The actual price depends on your age and the limits and coverages you choose. Nonetheless, new drivers will likely pay over $1,000 monthly for decent coverage. The monthly premiums will decrease by around 60% after five years of driving experience.
5. How long are you considered a new driver?
There’s no official answer to this question. However, most insurance companies will consider you a higher risk and continue selling you car insurance for new drivers until you amass 3–5 years behind the wheel.