Best Car Insurance for New Drivers

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Cheapest Car Insurance for New Drivers

Below are several popular providers’ average annual costs for full coverage insurance for a 16-year-old with a good credit rating and a good driving record.

Car Insurance Company	Average Monthly Cost for 16-Year-Olds	Average Annual Cost for 16-Year-Olds
Country Financial	$344	$4,128
Erie Insurance	$345	$4,140
Auto-Owners	$351	$4,210
Travelers	$390	$4,678
Nationwide	$400	$4,798

The cheapest auto insurance for a new driver depends on many of the same factors that determine the cost for other drivers in the U.S. Rates may vary based on individual drivers’ locations, vehicles and other factors.

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What Is the Best Car Insurance for New Drivers?

The cheapest car insurance for new drivers is provided by State Farm, according to our rate data. However, our extended list of our top 5 picks for the best car insurance for new drivers are below:

1. State Farm
2. USAA*
3. Geico
4. Erie Insurance
5. Liberty Mutual

*USAA is only available for military members, veterans, and their families

Below, we break each provider down in more detail.

#1 State Farm: Best Customer Experience

Better Business Bureau (BBB) Rating: C-
Our Score: 9.2/10

Our top pick for new drivers seeking car insurance, State Farm offers usage-based car insurance options and considerable discounts for students in good academic standing. The company also boasts a highly rated mobile app and an impressive service area spanning almost every state. According to the National Association of Insurance Commissioners (NAIC), it’s the largest auto insurance provider in the United States as of 2023.

Why We Like State Farm

• Over 100 years of industry experience
• Outstanding customer service and reviews
• Rates and programs designed for inexperienced drivers

Our Ratings: State Farm

Read more: State Farm Insurance Review

#2 USAA: Best for Military Members

BBB Rating: NR
Our Score: 9.2/10

USAA provides insurance for active and retired military members and their immediate families. Now the fifth-largest private auto insurance provider in the U.S., USAA offers lower-than-average rates for a wide selection of coverage options, all backed by outstanding customer reviews.

Why We Like USAA

• Affordable coverage rates
• Insurance add-ons available
• Insurance designed for active-duty military, veterans and their families

Our Ratings: USAA

Read more: USAA Insurance Review

#3 Geico: Best for Budget-Conscious Drivers

BBB Rating: A+
Our Score: 9.4/10

As the country’s third-largest auto insurance provider, Geico offers competitively low rates for most new drivers. The company also boasts a straightforward claims process and a user-friendly mobile app. Geico’s DriveEasy program, a usage-based insurance add-on, incentivizes new drivers to maintain a good driving record in exchange for rate discounts.

Why We Like Geico

• Easy-to-use mobile app
• Rates lower than the national average
• Usage-based insurance discounts are available

Our Ratings: Geico

Read more: Geico Car Insurance Review

#4: Erie Insurance: Best for Basic Insurance Coverage

BBB Rating: A+
Our Score: 9.2/10

Though Erie insurance products are only available in 12 states and Washington, D.C., the company has grown into the 13th largest provider of auto insurance in the U.S according to the NAIC. Erie offers a young driver discount, car safety equipment discounts and reduced usage discounts, making it an excellent choice for new drivers in the company’s coverage areas.

Why We Like Erie Insurance

• Strong industry reputation
• Erie Rate Lock^® helps prevent rate increases
• Diminishing deductible and a wide range of discounts available

Our Ratings: Erie Insurance

Read more: Erie Insurance Review

#5 Liberty Mutual: Good Programs for Young Drivers

Better Business Bureau (BBB) Rating: A-
Our Score: 9.1/10

Rounding off our top five insurance providers for new drivers, Liberty Mutual offers discounts for good students and students away from home. The company’s usage-based programs allow young drivers to turn good driving habits into savings, while other coverage options guarantee vehicle repairs. 

Why We Like Liberty Mutual

• Large service area
• Wide selection of coverage types and add-ons
• Great discounts for young or inexperienced drivers

Our Ratings: Liberty Mutual

Read more: Liberty Mutual Insurance Review

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How Does Car Insurance Work for New Drivers?

There’s no specific auto insurance policy for new drivers. Each state sets its own minimum auto insurance requirements, and car insurance for new drivers will look the same as any other driver’s policy. While a lack of driving experience doesn’t change how much insurance you need, it will impact the price.

How Long Are You Considered a New Driver for Insurance?

For insurance purposes, you’re considered a new driver until you have at least three years of U.S. driving experience. However, these limitations may vary. Some providers consider those with less than nine years of U.S. driving experience new drivers.

First-time drivers aren’t just teens and college-aged young adults. In fact, according to the Federal Highway Administration, there were almost 8,000 more licensed drivers between 25 and 29 years old than drivers aged 19 and under in 2022.

Auto insurance companies typically classify the following driving profiles as new drivers:

• Teen drivers (new young drivers)
• First-time adult drivers
• Immigrants and visiting international drivers
• Drivers with a lapse in insurance coverage

Car Insurance for International Drivers

As mentioned above, car insurance for first-time drivers in the U.S. includes more than just teens. In fact, international drivers who emigrate or visit the U.S. for an extended period must have car insurance if they drive on the open road.

According to the Center for Immigration Studies (CIS), emigrants moving to the U.S. are, on average, 31 years old.

Lapse in Insurance Coverage

A lapse in coverage occurs when a driver owns a vehicle while simultaneously not having any car insurance coverage. A lapse in coverage happens one of two ways: a driver is dropped by their insurance company, or they forget to pay their premium.

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Average Cost for New Driver Insurance

Based on full coverage rate estimates, the average cost of car insurance for new drivers is $5,055 per year or $421 per month. Our rate estimates are based on data from Quadrant Information Services.

New Driver Insurance Cost

Rates are higher for new drivers, especially teenage and younger drivers, which are highlighted in the table below:

Age	Monthly Car Insurance Average	Annual Car Insurance Average
16	$519	$6,226
17	$499	$5,989
18	$472	$5,669
19	$433	$5,192
21	$349	$4,186
25	$256	$3,070

Why Is Car Insurance So Expensive for New Drivers?

New drivers can pay as much as $5,000 per year or more for car insurance, depending on the company. New drivers are more expensive to insure due to their lack of a driving record. Younger drivers are more likely to be in an accident, which also raises car insurance rates.

Part of the reason insurance companies hike rates for younger drivers is because of the increased likelihood of an accident. In fact, the Centers for Disease Control and Prevention (CDC) states that drivers between the ages of 16 and 19 are more likely to be in car accidents than any other age group. The CDC also notes that car crashes are the leading cause of death for U.S. teens.

Insurance Quotes for New Drivers

The best way to ensure you get the lowest rates possible as a new driver is by reaching out to multiple providers for car insurance quotes. Car insurance companies review a number of factors when giving estimates for coverage. Some center on the auto policy itself, but many others have to do with a driver’s demographics and driving record.

Here are some of the main factors that may influence car insurance quotes, depending on the state in which you live:

• Age
• Gender
• Marital status
• Location
• Vehicle make, model and mileage 
• Credit score
• Driving history  
• Coverage limits

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How To Save on Car Insurance for New Drivers

There’s no one surefire way to find the best price for auto insurance, but there are a few things you can do to get a lower car insurance premium. We recommend using the following strategies if you’re purchasing car insurance for new drivers.

1. Compare Insurance Companies for New Drivers

No two insurance companies will give you the same price. Taking time to compare car insurance quotes will provide you with a baseline idea of what you can expect to pay when adding someone to an existing policy — or how much you could save by switching providers.

When you’re deciding between two companies, it may also help to read comparisons like our Allstate vs. Progressive review or State Farm vs. Geico review. These break down each company’s discount offerings and customer reviews side by side.

2. Improve Your Credit Score

Because having a poor credit score can make your rates go up in most states, building good credit before you start driving is a smart way to get cheaper car insurance as a new driver.

Improving your credit can seem like a daunting task, but there are many things you can start doing today to raise your credit score. Here are  seven simple steps to start raising your credit so you can get lower rates on your car insurance.

If you’re looking to save and have a new driver on the road, adjusting your current auto policy might give you a better rate. Opting for a higher deductible usually leads to lower premiums, but it does mean paying more up front if you file an insurance claim.

Another option is dropping coverage you don’t need. If one of your cars is older and you own it outright, you can likely stop paying for collision insurance and comprehensive coverage. In most states, you’ll still have to pay for liability insurance if you decide to drop the rest of your full coverage policy.

5. Try Usage-Based Insurance

Also known as pay-per-mile insurance, usage-based car insurance coverage measures driving behaviors and mileage and uses this data to set rates. By linking the monthly bill to the actual time on the road and good driving habits, usage-based insurance policies usually end up costing customers less than traditional auto insurance, according to the NAIC.

Usage-based policies may not be available in every state. They’re also not a good option if you drive often or have a long commute, and people with poor driving habits may actually see their rates increase.

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Cheap Car Insurance for First-Time Drivers

No matter how long you’ve been driving, you can get cheap auto insurance fast by comparing rates. In the sections below, we’ll look at some of the specifics of getting car insurance for each group.

Cheap Car Insurance for Young Drivers

It can be exciting for a teen to start driving on their own for the first time, but the cost of car insurance for new drivers is typically high. As mentioned, age is one of the main factors insurance companies consider when calculating prices.

Usually, the best way for young drivers to get cheap car insurance is to stay on their parents’ policies. Car insurance companies typically offer families several discounts to save money on insurance coverage, including:

• Safe driving discounts
• Good student discounts (must have B average grades or higher)
• College student and student-away-at-school discounts
• Defensive driving course discounts

Young drivers can’t purchase their own policies unless they own their own cars and no longer have the same permanent address as their parents. Keep in mind that drivers under the age of 25 usually pay much higher rates. Adding a young driver to an insurance policy will still increase your premiums substantially, but the amount will depend on your insurance company, the vehicle and where you live.

How To Get Auto Insurance After a Lapse in Coverage

If you happen to have a lapse in car insurance coverage, whether intentional or not, it can be costly. This could be due to accidentally missing a policy renewal, or maybe you haven’t driven or owned a car in several years. Luckily, our team has researched what to do if you find yourself in this situation.

To get auto insurance after a lapse in coverage, follow the steps below:

1. Contact your provider: The best and first step you should take to getting car insurance after a lapse in coverage is by contacting your car insurance provider to find out where you stand.
2. Reinstate your policy: After contacting your provider, the preferable resolution is to simply reinstate your auto insurance policy. However, depending on the reason your coverage lapsed, your provider may not be willing to reinstate your policy.
3. Compare car insurance for new drivers: If your provider isn’t willing to reinstate your policy, then we recommend comparing car insurance quotes from different providers to find the cheapest rates and best coverage for you and your vehicle.

Car Insurance for New Immigrants

Immigrants and foreign nationals can be classified as new drivers when they first enter the U.S. This is because auto insurance companies usually check domestic driving records, so you can have a clean driving record in another country and still be considered an inexperienced driver after moving to the U.S.

Being an immigrant can make it harder to purchase car insurance. Many car insurance companies will reject applicants who don’t have valid driver’s licenses. Depending on where you live, you may still be able to get a license if you don’t have the proper government paperwork.

According to the National Conference of State Legislatures, Washington, D.C. and the 19 states below allow undocumented immigrants to obtain driver’s licenses if they can produce items like a foreign birth certificate, valid foreign passport or proof of residency in the state.

California	Colorado	Connecticut	Delaware	Hawaii
Illinois	Maryland	Massachusetts	Minnesota	Nevada
New Jersey	New Mexico	New York	Oregon	Rhode Island
Utah	Vermont	Virginia	Washington

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Best Insurance for New Drivers: The Bottom Line

New drivers can expect to pay significantly more for car insurance than experienced drivers. However, there are ways to keep car insurance costs down by comparing car insurance companies and looking for appropriate discounts.

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Car Insurance for New Drivers: FAQ

Below are frequently asked questions about car insurance for new drivers:

What is the best way to insure a new young driver?

The best way to insure a new young driver is to compare rates from different car insurance companies online. New drivers can save money on car insurance by comparing rates between providers, looking for discounts and dropping unnecessary coverage.

What insurance do I need for my new car?

You will be required to carry the state minimum insurance based on where you live. Most states require liability insurance (bodily injury liability and property damage liability) at a minimum. But this will only cover other people and their passengers in accidents that you cause. If you want to protect yourself and your passengers, you may want to consider purchasing a full coverage car insurance policy, which includes liability, collision and comprehensive coverage.

What car insurance is best for a new driver?

Our picks for the best car insurance for new drivers are State Farm and Geico. Both of these companies offer policyholders ways to save with student discounts and savings for insuring multiple cars.

How much is car insurance for a new driver?

Car insurance for a new driver can range from about $2,000 per year to $6,000 and above. Depending on the state, costs may depend on the new driver’s vehicle, location, driving record (if any), credit and more.

Should I add my 16-year-old to my car insurance policy?

In most cases, you’ll save money by adding a 16-year-old to your policy rather than paying for a separate policy. Keep in mind that a 16-year-old can only get their own policy if the car is registered in their name. Most states don’t allow minors to register vehicles.

What’s the cheapest way to insure a new driver?

Ways to find affordable auto insurance rates include comparing quotes from providers, looking for discounts and dropping unnecessary coverage. It’s generally best for young drivers to stay on their parents’ policies too.

What is the cheapest car for a 17-year-old to insure?

Older cars with higher mileage are usually less expensive to insure because they have less cash value than newer vehicles. Financing a vehicle typically comes with higher insurance costs, as most lenders will require full coverage.

Other Types Of Insurance To Consider

Compare Car Insurance For New Drivers: Our Methodology

Because consumers rely on us to provide objective and accurate information, we created a comprehensive rating system to formulate our rankings of the best car insurance companies. We collected data on dozens of auto insurance providers to grade the companies on a wide range of ranking factors. The end result was an overall rating for each provider, with the insurers that scored the most points topping the list.

Here are the factors our ratings take into account:

• Coverage (30% of total score): Companies that offer a variety of choices for insurance coverage are more likely to meet consumer needs.
• Cost and Discounts (25% of total score): Auto insurance rate estimates generated by Quadrant Information Services and discount opportunities are both taken into consideration.
• Industry Standing (20% of total score): Our research team considers market share, ratings from industry experts and years in business when giving this score.
• Customer Experience (15% of total score): This score is based on volume of complaints reported by the National Association of Insurance Commissioners (NAIC) and customer satisfaction ratings reported by J.D. Power. We also consider the responsiveness, friendliness and helpfulness of each insurance company’s customer service team based on our own shopper analysis.
• Availability (10% of total score): Auto insurance companies with greater state availability and few eligibility requirements score highest in this category.

Our credentials:

• 800 hours researched
• 130+ companies reviewed
• 8,500+ consumers surveyed

*Data accurate at time of publication.