How to save on car insurance for new drivers

Table of Contents Who is considered a new driver?What influences the price of insurance? Car insurance rates by age and credit ratingCar insurance rates by providerCar insurance for teenagersCar insurance for first-time drivers Getting car insurance after moving to the U.S. Tips to save money on car insurance for new driversCompare companiesLook for […]

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Being inexperienced behind the wheel of a car usually leads to higher insurance rates, but doing some homework on prices can yield savings. Just like for any other driver, finding the best car insurance for new drivers means doing research and comparing prices from multiple providers.

This guide will give an overview of what new drivers can expect when paying for car insurance, who qualifies as a new driver and what factors shape the price of an insurance policy. Enter your zip code below to start comparing free quotes from top providers in your area.

In this article:

  • Who is considered a new driver?

  • Car insurance for teenagers

  • Car insurance for first-time drivers

  • Getting car insurance after moving to the U.S.

  • Tips to save money on car insurance for new drivers

  • Some options for car insurance for new drivers

  • Frequently asked questions

  • Our methodology 

Who is considered a new driver?

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. Here are some examples of people that could be considered new drivers:

  • Teen drivers

  • Older individuals without a driving record

  • People who immigrate to the U.S.

There’s also no specific car insurance policy for new drivers. You’ll be expected to purchase at least your state’s minimum required coverage, which typically includes bodily injury and property damage liability car insurance. Some states also require uninsured/underinsured motorist coverage and personal injury protection.

What influences the price of insurance? 

Car insurance companies review a number of factors when giving estimates for coverage. Some center around the auto policy itself, but many others have to do with a driver’s demographics and driving record. Age and driving experience are two factors that insurers weigh heavily, as they’re key indicators of how likely a driver is to get into an accident.

Here are some of the main factors that influence car insurance quotes:

  • Age

  • Gender

  • Marital status

  • Location

  • Vehicle make, model and mileage 

  • Credit score

  • Driving history  

  • Coverage limits

Car insurance rates by age and credit rating

Building good credit before you start driving is a good way to get cheaper car insurance as a new driver. On the other hand, a poor score can make your rate go up. Here’s how car insurance rates compare between two different age groups and across three credit ratings according to our cost estimates.

Credit Rating

Annual Cost For 24-Year-Old

Annual Cost For 35-Year-Old

Good

$2,377

$1,711

Fair

$2,957

$2,102

Poor

$4,419

$3,191

Car insurance rates by provider

Car insurance for new drivers can vary widely depending on where you shop. Below are a few popular providers with the annual cost for a 24-year-old with a good credit rating and driving record.

Car Insurance Company

Annual Cost For 24-Year-Old

USAA

$1,417

Geico

$1,645

State Farm

$1,755

Progressive

$2,016

Allstate

$3,000

Car insurance for teenagers

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 likely won’t stir any smiles. As mentioned, age is one of the main things insurance companies look at when putting prices together.

Part of the reason insurance companies hike rates for younger drivers is the increased likelihood of an accident. Car crashes are the second-highest leading cause of death for teenagers in the U.S., according to the Centers for Disease Control and Prevention. Additional reporting from the Insurance Institute for Highway Safety shows that nearly two out of every three teenagers killed in crashes in 2019 were males.

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 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

Remember that young drivers can’t purchase their own policies unless they no longer have the same permanent address as their parents and also own their own cars. Also, 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.

Car insurance for first-time drivers 

Teenagers aren’t the only ones driving for the first time. A person at any age who has lived in a large city and primarily relied on public transportation or who hasn’t had the means to purchase a car could also be considered a new driver.

As we mentioned above, things like the vehicle you choose, your age, location and credit score will all impact the price of car insurance for new drivers. Even though you may not have experience on the road, if you’re over 25, you may see lower rates than new teen drivers.

Another thing to consider is that if you live in an area that has public transit or you don’t plan on driving much, there are alternatives to traditional insurance, like usage-based insurance. Also known as pay-per-mile insurance, this type of coverage measures things like 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 National Association of Insurance Commissioners.

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.

Getting car insurance after moving to the U.S. 

Immigrants and foreign nationals can be classified as new drivers when they first enter the U.S. This is because car 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 States.

Being an immigrant can make it harder to purchase car insurance. Many car insurance companies will turn down applicants without a valid driver’s license. If you don’t have the proper government paperwork, you may still be able to get a license depending on where you live.

According to the National Conference of State Legislatures, 16 states and the District of Columbia allow undocumented immigrants to obtain a driver’s license if they can produce items like a foreign birth certificate, valid foreign passport or proof of residency in the state.

Some states that offer driver’s license services to undocumented immigrants include:

  • California

  • Delaware

  • Hawaii

  • Maryland

  • New Jersey

  • New Mexico

  • Virginia

Tips to save money 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 lower rates. We recommend using the following strategies if you’re purchasing car insurance for new drivers.

Compare companies

No two insurance companies will give you the same price on coverage. Taking time to compare car insurance quotes will give 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 trying to decide 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.

Look for discounts

We mentioned earlier that several car insurance companies offer discounts for young drivers and students, but you can save money through other means too. Bundling policies like homeowners insurance with your auto coverage can lower your premium, so check to see if your insurer offers a multi-policy discount.

Here are some common discounts offered by insurance providers:

  • Safe driver discount

  • Multi-policy discount 

  • Multi-vehicle discount

  • Military discount

  • New vehicle discount

  • Vehicle safety feature discount

Adjust your coverage

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 overall lower premiums, but it does mean paying more upfront 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. Remember that you’ll still have to pay for liability insurance if you decide to drop the rest of your full coverage policy.

Some options for car insurance for new drivers

Whether you’re a new driver or have been driving for decades, researching and comparing quotes from several providers is a great way to find the best rate. Some of the big names in the business include Geico, State Farm and Liberty Mutual. Read on to learn more about these providers, or use the tool below to start getting free quotes from top insurers in your area.

Geico

Geico offers a wide range of coverage and discount options. Students can get discounts up to 15%, and if you have multiple vehicles on your policy, you can get savings up to 25%. Geico also has a positive reputation for customer service and sound business practices, earning an A+ rating from the Better Business Bureau (BBB).

State Farm

If your student driver holds at least a B average in school or is away at college and only uses their car sparingly, State Farm has a number of discounts that can help you lower your premiums. This includes programs like Steer Clear® for drivers under the age of 25. Plus, its network of local agents can come in handy if you’re not sure how much coverage to purchase as a new driver.

Frequently asked questions

Is car insurance higher for new drivers?

New drivers are more expensive to insure due to the lack of a driving record. Younger drivers are more likely to be in an accident, which also raises car insurance rates.

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

Ways to find affordable auto insurance rates include comparing quotes from multiple 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 also comes with higher insurance requirements.

*Data accurate at time of publication.

Jacquelin Burkhammer

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