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The cheapest car insurance for 21-year-olds can be found at USAA for $134 per month or $1,609 per year for full coverage policies
Lowest Insurance Rates For Young Drivers
Written by: Daniel Robinson, Written by: Daniel Robinson Author Daniel is a Guide team writer and has written for numerous automotive news sites and marketing firms across the US, UK and Australia, specializing in car finance and car care topics. Daniel is a Guides team authority on car insurance, loans, warranty options, car services and more.
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Edited by: Rashawn Mitchner Edited by: Rashawn Mitchner Managing Editor Rashawn Mitchner is a Guide team editor with more than 10 years of experience covering personal finance and insurance topics.
Finding cheap car insurance as a 21-year-old can be difficult. Monthly and annual premiums tend to be expensive because younger drivers pose more risk to insurance companies. In this article, we at the Guide Team rank the best car insurance for 21-year-olds and show you how to get affordable rates.
Cheapest Car Insurance For Young Adults Car Insurance Discount Best Car Insurance Companies Average Cost Of Car Insurance
The Guide Team is committed to providing reliable information to help you make the best decision possible about insuring your vehicle. Because consumers rely on us to provide objective and accurate information, we have created a comprehensive rating system to formulate our ranking of the best car insurance companies. We collected data on dozens of auto insurance providers to rate the companies on a wide range of ranking factors. After 800 hours of research, the end result was an overall rating for each provider, with the insurers that achieved the most points at the top of the list.
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According to our rate estimates, 21-year-olds pay an average of $2,786 per year or $232 per month for full coverage auto insurance. That’s about 56% more expensive than the average for 35-year-old drivers, which is $1,785 a year or about $149 a month. Typically, car insurance rates are much more expensive for 21-year-olds than for older drivers.
Car insurance costs for 21-year-old drivers are determined based on several factors, including driving history, location and credit score. Gender also plays a role in calculating your premiums, especially as a teenager or young adult. For example, young men have disproportionately higher accident rates, causing them to pay more for coverage than young women. However, some states do not allow insurance companies to use gender in calculating insurance premiums.
Compared to older drivers, 21-year-olds have less driving experience and are more likely to be involved in accidents. Car insurance companies compensate for these risk factors by charging this age group higher rates.
According to the AAA Foundation for Traffic Safety, drivers between the ages of 20 and 24 were 74% more likely to be involved in a crash than drivers in their 30s in 2015. Below you can see crash rates for each age group.
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High-risk drivers pay higher rates on average, and young drivers usually fall into this category. You can see below how average costs by age correlate with the crash data above.
The cheapest car insurance for 21-year-olds is USAA, which offers average rates of $134 per month. However, USAA is only available to military members, veterans and their immediate families. Geico is the cheapest company available for any 21-year-old driver, with average rates of $154 per month. Other affordable companies include Auto-Owners Insurance, Erie Insurance and Nationwide.
The best car insurance for 21-year-olds isn’t necessarily the cheapest, but cheap rates certainly help. Below you can see how 11 popular providers rank on car insurance costs for 21-year-olds.
*Auto insurance estimates are based on full coverage policies with $50,000 bodily injury per person, $100,000 bodily injury per accident, $50,000 property damage per accident and a $500 deductible for collision coverage and comprehensive coverage.
Cheapest Car Insurance Companies, Rates & Quotes (october 2023)
Location is one of the factors that affects what you pay for car insurance, and rates can vary significantly by state. Below are each state’s cheapest auto insurance companies for full coverage for 21-year-olds. In our estimates, USAA and Geico are the cheapest providers in many states.
While 21-year-olds pay an average of $232 a month nationwide, drivers in some states pay much less. For example, insurance in North Carolina is $129 per month for the age group.
Whether it’s because of population density or insurance regulations, some states are much more expensive for 21-year-olds than others. Michigan, Connecticut and Massachusetts top the list.
Our top five picks for the best car insurance for 21-year-olds are Geico, USAA, State Farm, Nationwide and Auto-Owners Insurance. When comparing car insurance companies, our team considers cost, reputation, coverage, availability and customer experience. We found these companies to be affordable on average for young adult drivers.
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Geico is our overall pick for the best car insurance for 21-year-olds. Its car insurance rates for 21-year-olds are around 34% cheaper than the market average for the age group. Geico also offers a good student discount of 15% and a discount of up to 22% for those with five years of accident-free driving.
The company has been around since 1936 and has an A+ rating from the Better Business Bureau (BBB).
USAA offers the cheapest car insurance for 21-year-olds on average, with rates about 42% below the market average. However, we didn’t call it the best car insurance for 21-year-olds because it’s not available to everyone. You can only qualify if you are enlisted in the military, are a veteran, or have a parent who is a member of the USAA.
USAA not only has low fares for 21-year-olds, but is also known for reliable customer service. The company has an A+ rating from the BBB and has scored the highest in nearly every region in the country in the J.D. Power 2022 U.S. Auto Insurance Study ℠.
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State Farm is another national provider that offers affordable auto insurance premiums for 21-year-old drivers. Our estimates show that State Farm’s average rates are about 17% cheaper than the national average for this age group.
State Farm also offers discounts for younger drivers, including a generous student discount of up to 25% for maintaining a B average. Younger drivers can also save money with State Farm’s Steer Clear® program, an app-based driving course for drivers under 25.
On average, 21-year-old drivers save around 23% with Nationwide compared to the national average. One thing that makes Nationwide unique is that it offers two usage-based telematics insurance options. SmartRide® can award discounts of up to 40% based on a person’s driving habits by tracking acceleration, braking, night driving and more. The other option, SmartMiles®, is a pay-per-mile insurance program that can help people who don’t drive very often save money.
Nationwide has a solid reputation in the industry, earning an A+ financial strength rating from AM Best and an A+ rating from the BBB.
Getting Cheap Car Insurance For New Drivers
Another affordable car insurance company for 21 year olds is Auto Owners. Our estimates show that 21-year-olds pay about 26% less than the national average with car owners. The company offers a good student discount of up to 20% and a discount for students who are away from school and leave their cars at home. However, Auto Owners is only available in 26 states.
Fortunately, age isn’t the only thing that determines car insurance rates. There are a few things you can do to find cheap rates on the best car insurance for 21 year olds. We recommend thinking about your coverage level and deductible, comparing providers, keeping a clean driving record and finding discounts.
To save money, you can reduce the amounts covered by options such as comprehensive and collision insurance. You can also drop full coverage and only get minimum coverage levels of bodily injury liability and property damage liability. However, make sure you can handle any costs that your minimum coverage won’t pay for if you’re at fault in an accident.
You can lower your payments by increasing your deductible, which is the amount you pay out of pocket if you file a claim. However, make sure you can afford the deductible.
Average Cost Of Car Insurance (2023)
One of the easiest ways to get a better rate is to compare companies. We recommend that you compare rates each time your car insurance policy is renewed. The cheapest companies for teenage drivers aren’t necessarily the cheapest for drivers in their early 20s, so it pays to check rates as you get older.
Getting a speeding ticket or causing an accident are surefire ways to get higher rates, and 21-year-old drivers already pay more than average. A clean driving history keeps your rates as low as possible.
Not all companies offer the same discounts or the same savings on similar discounts. In our picks for the best car insurance for 21-year-olds above, you can see that State Farm, Geico, and Auto Owners offer different discount amounts for good students.
Compare quotes online to find the right discount for your situation. You can also work with an insurance agent to make sure you get all applicable discounts.
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Another way for 21-year-old drivers to save money
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