- Young drivers pay more because, statistically, they crash more. The Insurance Institute for Highway Safety reports that, per mile driven, drivers ages 16–19 are nearly three times as likely as drivers 20 and older to be in a fatal crash.
- Staying on a parent’s policy is usually the cheapest option.
- Good student, telematics, driver training and away-at-school discounts can make a big difference.
- The car you choose affects the premium as much as almost anything you can control.
If you’re a teen, a college student or a driver in your early twenties, your first insurance quote can be a shock. The good news: rates typically fall as you gain experience and keep a clean record, and there are concrete ways to reduce the cost now.
Why insurance costs more under 25
Insurers price policies on the likelihood and cost of claims. Inexperience, higher crash rates and more risky driving behaviors among young drivers mean more claims on average. According to the IIHS, the crash risk is especially high in the first months after a teen gets a license. Rates usually decline gradually through the early twenties and often drop noticeably around age 25, assuming no accidents or violations.
Ways to lower the cost
1. Stay on a parent’s or household policy
Adding a young driver to an existing policy is typically much cheaper than buying a standalone policy. The household may also keep multi-car and bundling discounts. Remember that any claims or tickets affect the whole household’s rates.
2. Earn a good student discount
Many insurers offer a discount to full-time students who maintain good grades, commonly a B average or 3.0 GPA, or who make the honor roll. You’ll usually need to send a transcript or report card.
3. Try usage-based insurance (telematics)
Programs that use a phone app or plug-in device to track braking, speed, time of day and phone use can reward safe young drivers. Ask whether the program can raise your rate as well as lower it.
4. Take a driver training course
Many insurers discount policies for completing an approved driver education or defensive driving course.
5. Use the “student away at school” discount
If a student lives more than a set distance from home (often 100 miles) without a car, some insurers reduce the rate because they’ll drive the family car less.
6. Choose the right car
A modest, used vehicle with strong safety ratings is usually far cheaper to insure than a new sports car or high-horsepower model. Before buying, get quotes for the specific vehicles you’re considering.
7. Pick a sensible deductible
A higher collision and comprehensive deductible lowers the premium, but only if you could pay it after an accident.
Should a young driver carry full coverage?
If the car is financed or leased, the lender will require collision and comprehensive. For an older, low-value car, liability-only coverage may make sense, but young drivers are statistically more likely to be in an at-fault crash, so liability limits should be higher than the state minimum. See full coverage vs liability and how much car insurance you need.
Keep the record clean
One at-fault accident or speeding ticket can raise rates for three to five years. Graduated licensing rules, which limit night driving and teen passengers, exist because they reduce crashes. Following them protects both safety and premiums.
Compare quotes every year
As a young driver’s record and age improve, the cheapest insurer can change. Re-shop each year and after turning 21 and 25. For a full comparison method, read how to find the cheapest car insurance. Brand-new drivers of any age should also see car insurance for new drivers.
Frequently asked questions
Is it cheaper for a young driver to be on a parent’s policy?
Usually yes. Adding a teen or young adult to an existing household policy is typically cheaper than buying a separate policy, and it can unlock multi-car discounts.
At what age does car insurance go down?
Rates usually fall gradually through the early 20s and often drop noticeably around age 25, assuming a clean record.
What grades do you need for a good student discount?
Requirements vary by insurer, but many ask for a B average, a 3.0 GPA, or a spot on the honor roll or dean’s list.