Car Insurance for 21-Year-Old Drivers

Trade insurance for 21-year-old business owners is available. It's different from car insurance for 21-year-olds, but it's necessary when running a vehicle-related business.

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Chris Tepedino is a feature writer that has written extensively about home, life, and car insurance for numerous websites. He has a college degree in communication from the University of Tennessee and has experience reporting, researching investigative pieces, and crafting detailed, data-driven features. His works have been featured on CB Blog Nation, Flow Words, Healing Law, WIBW Kansas, and C...

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Written by Chris Tepedino
Insurance Feature Writer Chris Tepedino

Laura Walker graduated college with a BS in Criminal Justice with a minor in Political Science. She married her husband and began working in the family insurance business in 2005. She became a licensed agent and wrote P&C business focusing on personal lines insurance for 10 years. Laura serviced existing business and wrote new business. She now uses her insurance background to help educate...

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Reviewed by Laura Walker
Former Licensed Agent Laura Walker

UPDATED: Jun 28, 2022

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The Rundown

  • 21-year-olds pay almost $1,000 more than the national average for insurance.
  • Trade insurance is different from car insurance, and is necessary when running a vehicle-related business.
  • One way to save money on car insurance is to take a voluntary driver improvement course.

Whether you’re looking to cover yourself or your business with trade insurance, it may be difficult to find car insurance for 21-Year-Old drivers.  Trade insurance for 21-year-old drivers doesn’t have to be impossible to find. However, it isn’t cheap. They pay premiums for limited driving history and youthful recklessness. Even though they might have been driving for at least a few years, car insurance companies still charge them higher premiums because they are inexperienced drivers and are more likely to drive recklessly.  

We’ve put together this guide to help you find cheap car insurance when you’re considered a road risk to insurance companies. If you’re ready to start comparing car insurance rates for 21-year-old drivers, use our FREE company tool.

How much is car insurance for a 21-year-old?

The average car insurance rate for a 21-year-old is roughly $1,500, which is nearly $1,000 more than the national average.

When you’re under the age of 25, your average cost is going to be expensive. In fact, 21-year-olds are paying more than almost anyone else in their early 20s. Those who are 20 though will see far higher insurance costs than those 21 and older.

The table below shows the average costs of insurance for 17-year-old, 25-year-old, and 35-year-old males and females from top insurance companies.

Average Annual Auto Insurance Rates by Age and Gender
GroupAverage Annual Auto Insurance Rates for a Single 17-year-old FemaleAverage Annual Auto Insurance Rates for a Single 17-year-old MaleAverage Annual Auto Insurance Rates for a Single 25-year-old FemaleAverage Annual Auto Insurance Rates for a Single 25-year-old MaleAverage Annual Auto Insurance Rates for a Married 35-year-old FemaleAverage Annual Auto Insurance Rates for a Married 35-year-old Male
Allstate$9,282.19$10,642.53$3,424.87$3,570.93$3,156.09$3,123.01
American Family$5,996.50$8,130.50$2,288.65$2,694.72$2,202.70$2,224.31
Farmers$8,521.97$9,144.04$2,946.80$3,041.44$2,556.98$2,557.75
Geico$5,653.55$6,278.96$2,378.89$2,262.87$2,302.89$2,312.38
Liberty Mutual$11,621.01$13,718.69$3,959.67$4,503.13$3,802.77$3,856.84
Nationwide$5,756.37$7,175.31$2,686.48$2,889.04$2,360.49$2,387.43
Progressive$8,689.95$9,625.49$2,697.73$2,758.66$2,296.90$2,175.27
State Farm$5,953.88$7,324.34$2,335.96$2,554.56$2,081.72$2,081.72
Travelers$9,307.32$12,850.91$2,325.25$2,491.21$2,178.66$2,199.51
USAA$4,807.54$5,385.61$1,988.52$2,126.14$1,551.43$1,540.32
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The average car insurance for 21-year-old females and males will vary based on many factors, such as location. In Florida, the average annual cost of car insurance for 21-year-olds is $5,500 and in Georgia, about $4,314.

There are more expensive places, too. How much is car insurance for a 21-year-old in Michigan? Annually, $12,875.

See what is available in your area by entering your ZIP code.

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What’s the cheapest car insurance solution?

If you still live at home, you can be covered under the insurance of your mom or dad. To do this, you must live at home or be enrolled in college and the vehicle has to be registered in the name of the parents whose insurance you will be listed on.

If the car is registered in your name, you are responsible for purchasing insurance. Similarly, if you do not live in the same home or attend college, you are considered emancipated and responsible for your own insurance.

Your choice of vehicle can save you money on insurance.

What are some car-related savings?

A four-door sedan is less expensive to insure than a two-door version of the same car. This is because two-door vehicles are considered sports cars, and sports cars are statistically more likely to be involved in serious accidents.

Other car-related discounts include airbags, anti-lock brakes, and electronic stability control.

In addition, you may be eligible for many auto insurance discounts (e.g. student discounts). 

Furthermore, if you buy a cheap older car, you can avoid having collision coverage, and that will knock a large portion of your premiums.

How to take a driver improvement course

Another way to save money on car insurance is to take a voluntary driver improvement course. Because taking an interest in being a better driver translates into being less of a risk for the auto insurance company, you can get an insurance discount for doing so.

Keep in mind that the course cannot have been ordered by a judge or the Department of Motor Vehicles.

Can student grades save you money?

If you are still in college, your grades can save you money on car insurance.

Most insurance companies offer affordable car insurance for students who maintain a 3.0 or higher GPA, in recognition of taking on more responsibility for themselves, another statistical indication of reduced risk to the insurer.

Keep your grades up, and they will help make your car insurance premiums more affordable.

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How much is liability car insurance for 21-year-olds?

Most states require at least some liability car insurance for 21-year-olds (or anyone) to drive. That said, liability coverage is the same as other, more expansive policies: 21-year-olds will most likely pay more for their auto insurance coverage.

Basic auto policies include bodily injury liability, personal injury protection, property damage liability, collision, comprehensive and uninsured/underinsured motorists, according to the Insurance Information Institute.

How do I get trade insurance for a 21-year-old?

Auto trade insurance for a 21-year-old business owner is possible to obtain, though you may need to do a little research.

Companies such as Tradex for U.K. readers offer insurance to anyone who is buying and selling or mending or cleaning cars for trade. These can be car sales lots, mechanics, body shops, car jockeys. Etc.

When speaking with a possible insurance provider about their traders insurance requirements, remember that you will need to provide proof of your business. Other insurance requirements may include disclosure of drivers, among other things.

Can I get trade insurance at 21?

Yes. Although there may be increased auto insurance premiums as those under the age of 25 are classified as “high risk.” So for those of you who are younger, asking if you can get trade insurance at 20: Yes, but expect to pay more.

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What insurance coverage can you get if you’re under 25?

The most coverage available is always recommended. But at minimum, drivers need road risk insurance. This car insurance covers you and the vehicles you own or the vehicles you are in possession of concerning your business.

There may be more hoops to jump through for those who are under 23.

What’s the bottom line?

Those who are under the age of 25 and looking for either their personal car insurance or trade insurance are high risk, but keep yourself organized and drive safely and there are surely some discounts in your future.

Ready to buy car insurance for 21-year-old drivers? Enter your ZIP code to find car insurance quotes for 21-year-old drivers.

 

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