Teenage Car Insurance Average Cost: Everything You Need To Know (2024)

As your teenager approaches driving age, you should think about getting them car insurance coverage. People in this age group pay significantly more for an auto insurance policy than older drivers, mainly because of the risk of insuring an inexperienced driver. Insurance companies consider many factors when calculating insurance rates for teenagers, and it's a good idea to understand what they are before you get a new policy or add a teen driver to an existing one. Fortunately, there are ways to reduce the cost of car insurance for teens that can help you save on your monthly premium.

What Is the Average Cost of Car Insurance for a Teenager?

Car insurance costs vary widely among individuals and providers, so it's hard to know exactly what you may pay when you get an insurance policy for a student driver. However, research data from Investopedia indicates that 16-year-old drivers pay an average monthly premium of $250 when you add them to an existing policy. Teenagers should expect to pay more if they get their own coverage. The national average insurance cost for a middle-aged adult who qualifies for discounts is $726 for a six-month policy. Adding a teen driver to this policy will increase the six-month premium to $1,848.

As teenagers gain experience behind the wheel, they become less risky to insure. This can result in a gradual decline in car insurance rates. For example, high school students with a driver's license will pay more for auto insurance than college students who drive. Policyholders will see the most savings on their car insurance premiums in their 20s, with the most significant drop in price coming when they reach the age of 25.

Why Is Car Insurance More Expensive for Teenagers?

Car insurance is more expensive for teenage drivers because this age group poses a greater risk to insurance companies than older, more experienced drivers. The Centers for Disease Control and Prevention reports that drivers between the ages of 16 and 19 are three times more likely to be in a fatal crash than drivers aged 20 and older. Some of the factors that the Insurance Institute for Highway Safety contributes to the higher likelihood of teens getting in an accident include:

• Driver error.
• Speeding.
• Loss of control.
• Teenage passengers.
• Nighttime driving.

Many states have graduated driver licensing programs that put restrictions on new drivers 18 years old and younger to help limit the number of accidents for drivers in this high-risk age group. The most common of these limitations are:

• Minimum age for unsupervised driving.
• Restrictions on driving after dark.
• Restrictions on the number and ages of passengers allowed in the vehicle.

With these limitations, teen drivers can focus on learning good driving habits without too many distractions.

Which Factors Affect the Cost of Auto Insurance for Teens?

Various factors go into calculating insurance rates, and the information insurers use for young adult drivers is the same information they collect for teens. So, when you gather auto insurance quotes for a teenager, you'll need to provide the agent with the following:

Age

Age plays a large part in how much insurance costs since younger people have less experience, making them a higher risk. While 16-year-olds pay the most of any age group for auto coverage, seniors over 60 will also see an increase in their annual car insurance premiums. Drivers in their 50s typically have the best annual car insurance premiums thanks to their experience and safer driving habits.

Gender

A teen's gender will affect how much they pay for car insurance coverage in all but a few states. Young male drivers are statistically more likely to be in an accident than young female drivers. This means that teenage boys pay higher annual car insurance rates than girls. According to The Zebra, the average annual car insurance premium for a 16-year-old male is $6,701, whereas a female of the same age will pay an average of $5,969. At 20 years of age, females pay an average car insurance rate of $3,129 per year, while 20-year-old males pay $3,602.

Vehicle Type

The type of vehicle a teen drives is another factor that insurance providers use to set their rates. Some cars are more likely to be in accidents, and others are just not ideal for young people for a variety of reasons, including having too much horsepower. An older car with safety features is a good option for a driver still getting comfortable behind the wheel. Having the right vehicle can not only help prevent teenage drivers from getting in accidents but also help you save money on your annual insurance bill.

ZIP Code

Where a teenager lives will affect their auto insurance rate, and Carinsurance.com has data for rates in each state based on gender for this age group. A young woman driver on her parent's policy will pay the most for auto insurance in the following states:

• Louisiana: $7,081 per year.
• Florida: $6,178 per year.
• California: $4,919 per year.
• Nevada: $4,858 per year.
• Michigan: $7,781 per year.

Auto insurance rates for young male drivers will cost the most in these states:

• Louisiana: $8,014 per year.
• Florida: $6,639 per year.
• Michigan: $7,781 per year.
• Missouri: $5,858 per year.
• Nevada: $5,148 per year.

Per the insurance expert Jerry, the least expensive states to insure young adults are:

• Iowa: $1,612.68 per year.
• Alabama: $2,273.52 per year.
• North Carolina: $2,312.40 per year.
• Indiana: $2,370.96 per year.
• California: $2,438.16 per year.

Driving History

An insurance company uses your driving history to help them determine the risk involved when providing car insurance products. Because younger drivers have little experience, they lack a clean driving record to provide to an insurance company when getting insurance quotes. Young drivers are statistically more likely to be in an accident, so insurance companies charge them higher rates for auto coverage. The longer you go without an accident or traffic violation, the more likely you will get the best car insurance rates.

Which Providers Have the Cheapest Car Insurance Rates for Teens?

Auto insurance premiums vary widely, but you can easily obtain free quotes from providers such as State Farm, GEICO, Progressive, and most other auto insurance companies. Many large insurance companies have mobile apps and websites that make it quick and easy to get car insurance estimates. Business Insider lists the best cheap insurance companies for teens as:

• Erie: Young men and women can find the cheapest car insurance rates overall from Erie.
• USAA: Teen drivers with military family members can get cheap car insurance from USAA.
• Nationwide: If you're adding a teen to your car insurance policy and have other insurance policies, you can save by bundling all your insurance with Nationwide.
• State Farm: For the best discounts on car insurance for a teenager, consider getting a quote from State Farm.
• GEICO: Those with a low credit score can get the best car insurance rate through GEICO, which may affect parents of teens more than teens themselves.

You can expect to pay the following average annual premiums for adding teenagers to your policy:

• Erie: $2,532.
• USAA: $2,588.
• Nationwide: $3,406.
• State Farm: $5,176.
• GEICO: $3,432.

Which Cars Are the Cheapest to Insure for Teens?

The most expensive cars to insure are sports cars and luxury vehicles because of their high values and repair costs, and these are not the best options for a teenage driver. Older vehicles are often the better option for teens because they are less expensive to insure, and you won't worry as much about property damage if something happens to the car. Here's a list of vehicles to consider if you're going to be adding a teenager to your policy:

• Mazda MX-5 Miata: $2,640 average annual premium.
• Subaru Outback: $2,735 average annual premium.
• Volkswagen Golf GTI: $2,740 average annual premium.
• Mini Countryman: $2,766 average annual premium.
• Volkswagen Routan: $2,769 average annual premium.
• Smart Fortwo: $2,776 average annual premium.
• Fiat 500L 19: $2,786 average annual premium.
• Honda Odyssey: $2,788 average annual premium.
• Subaru Legacy: $2,792 average annual premium.
• Mini Paceman: $2,807 average annual premium.

How to Reduce the Cost of Insurance for a Teenager

If you want to lower your car insurance bill, it's important to understand the best ways to do so, especially when adding a teen to your policy. Use these tips to get the best deal on teen car insurance:

Obtain Several Car Insurance Quotes

Getting free car insurance quotes is easier than ever, thanks to user-friendly websites, and many companies have a mobile app that provides quick and easy quotes for new policies. When you have quotes from multiple auto insurers, you can compare the rates and options to get the coverage that suits you best. Even if you want to add your teen driver to your current auto policy, you should still get quotes from other companies. You may be able to get a better rate if you switch insurers.

Maintain a Clean Driving Record

Teaching your teen good driving habits can help them keep their driving record clean and free of accidents and traffic violations. Each year that your teen is free of accidents and tickets will help them get cheaper car insurance rates. As your teen becomes a more experienced driver, your insurance company will see them as more responsible, resulting in lower car insurance rates.

Get Good Grades

Having at least a B average and getting good grades consistently can qualify high school and college students for car insurance discounts. A new driver with good grades demonstrates a more responsible nature to an insurance company. Your insurance provider may require a copy of your child's transcripts or report card to prove they have a high grade-point average.

Add Them to Your Policy

A standalone policy for a teenager will cost significantly more than adding a teen driver to your policy. Although your monthly bill will increase when you add a teenager to your car insurance policy, the cost will still be cheaper than if they get a separate policy of their own. Teenagers can have the same coverage as adults, including liability insurance, comprehensive coverage, and collision coverage, so you won't have to adjust your coverage types or limits when you add a young driver to an existing policy.

Take a Defensive Driving Course

Many insurance companies offer a discount to those who participate in a defensive driving course. Even if your insurance company doesn't provide this discount, having teenagers complete a defensive driving course can help them learn how to drive safely. Over time, the benefits of taking this type of course will pay off because students learn to be better, more responsible drivers.

How to Add a Teen Driver to a Car Insurance Policy

To add your teenager to your car insurance policy, you can contact your independent insurance agent or go online to your insurance provider's website. You'll need to provide the required information for your teen and let the agent know which vehicle they'll be driving. If you have more than one car, put them on the least expensive one to insure. Your teenage driver should get coverage the same day you let your insurance company know you want them added to your policy.