Cheap Car Insurance for Young Drivers

Finding cheap car insurance for young drivers can be difficult but it’s not impossible. Young drivers pay higher rates due to their high level of risk but can qualify for teen auto insurance discounts for good grades, good driving records, and taking defensive driving courses. Read our guide below to learn more and compare free quotes to find cheap auto insurance for young drivers from local companies.

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Natasha McLachlan is a writer who currently lives in Southern California. She is an alumna of California College of the Arts, where she obtained her B.A. in Writing and Literature. Her current work revolves around insurance guides and informational articles. She truly enjoys helping others learn more about everyday, practical matters through her work.

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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

UPDATED: Jul 16, 2021

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After a long wait, you finally have your driver’s license in hand and you are ready to hit the road. But, there is one thing you need to do before you begin your adventures as a driver: get insurance.

Depending on the carrier your parents use for their auto insurance, you may have already been added to their policy when you had a learner’s permit. However, many insurance companies will not add a teenager to a policy until they have an actual driver’s license. So for most teens, now is the time to get coverage.

Even if your parents are going to handle your car insurance for a few years, it is a good idea to get acquainted with the ins and outs of auto insurance coverage sooner than later. So what is the first thing to know? Let’s take a look at the basics of auto insurance.

How Does Insurance Work?

Insurance is something a lot of people struggle to understand since it is not a physical product that can be seen or touched. So, you should not be embarrassed if there are aspects you do not understand. Basically, an auto insurance policy is a contract between you and your insurer that says they agree to pay for certain types of damage that occur under specific circumstances. Be aware that not all types of damage are covered under standard auto insurance policies.

Factors That Impact Rates

It can be difficult to understand why two people who seem to be fairly similar can have such drastically different insurance premiums. Although policyholders often blame this on the insurance company, there are several factors that affect the price you pay for car insurance. These factors determine your risk factor. Since teens are automatically considered to be high-risk drivers due to the frequency at which they cause car accidents, you will want to do everything possible to keep your risk factor from increasing. What does an insurance carrier look at to determine a risk factor?

  • Age
    Both teens and elderly drivers tend to have higher insurance prices since they cause a disproportionate amount of car accidents.
  • Gender
    Young men and teenage boys often pay more for their car insurance since they are more likely to engage in dangerous behavior, such as street racing.
  • Driving History
    Each accident or speeding ticket you receive can negatively affect your insurance rate.  Also, since younger drivers have less history to review, they do not get the same benefits as other drivers with a longer record of safe driving.
  • Marital Status
    Young drivers skew heavily towards being single and insurance companies typically proivde married couples with better rates since insurance companies see them as less likely to perform risky behavior.
  • Credit Score
    Believe it or not, your credit score can hurt or help your insurance rate. Insurers expect people with high credit scores to be more financially stable and therefore more reliable in making insurance payments and reporting claims.
  • Type of Car
    For teens, older cars usually cost less to insure than newer cars since their market value is lower. However, if you own a sports car, you may see high rates even if the vehicle several years old. For lower rates, stick with sedans or other “family” vehicles.

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Your First Insurance Policy

For most teens, the first insurance policy they will be covered under belongs to a parent or other relative. Despite what many think, it is possible for a teen to purchase his or her own policy, but this is rarely the best course of action. What is the difference in purchasing your own policy versus getting coverage under a parent’s policy?

Pros and Cons of Using a Parent’s Policy

Some teenagers view having their own insurance policy as a mark of independence. But others see it as a bill they would prefer to avoid. Since you may not have the option of purchasing your own policy, you should check to see which option is best for you. Here are a few pros and cons of staying on your parents’ auto insurance policy:

  • Your parents will be offered better insurance rates than a brand new driver could receive since they probably have an established auto insurance policy that has been in force for several years. Because of this, it is usually less expensive to be listed as a driver on an existing policy rather than create a new policy.
  • In many states, teens are not able to legally sign a car title until they are 18 years old. Unless your name is on the title, you cannot take out your own insurance policy, so it would be necessary to go on the owner’s policy.
  • If one or both of your parents have a particularly bad driving record or drive extremely expensive cars, it may be cheaper to get your own policy instead of being rated as a driver on a parent’s vehicle.
  • Most major insurers offer multi-car discounts, which you will not qualify for if you have your own policy. However, this discount will be an option if you stay on your parents’ policy.

What Coverage Do Teens Need?

Not only do coverage needs vary from city to city and household to household, but they also vary amongst drivers within a household. The coverage that your parents, roommates or siblings have on their vehicles may not be appropriate for you. Because of this, you should thoroughly review your insurance needs before you take out a policy.

Regardless of your vehicle’s age, full coverage insurance is always a good idea if you know that it would be difficult for you to obtain a new car in the event your current one was totaled. If full coverage insurance is not something you can handle financially, you may be able to purchase a liability only policy instead.

To qualify for a liability only policy, your car should be paid off. While there are a few lien holders who do not require full coverage insurance, most will require you to keep comprehensive and collision coverage on your policy until the car is paid off. Additionally, most people tend to drop full coverage to liability only once their car is five to ten years old since the market value of the car depreciates so much during that timeframe.

If you want more coverage than a simple liability policy (which will only cover other drivers) consider a sort of hybrid policy that will give you some coverage for your vehicle without breaking the bank. How? If your insurer does not automatically include it, look at adding Uninsured Motorist coverage (this coverage will pay for damage to your vehicle and passengers if you are the victim of a hit-and-run or get hit by a driver without insurance). It may also be possible to add comprehensive coverage to your policy so that damage to your car that is caused by an animal or hailstorm will be covered.

Discounts for Young Drivers

Although it is usually quite expensive to get insurance as a teenager, insurance companies try to combat this by offering discounts that are only available to teenagers. Here are a few:

  • Good Student Discount
    If you maintain a good GPA (usually a 3.0), you may qualify for this discount until you graduate from college.
  • Defensive Driver School
    Did you take a driving course at school? Take your completion certificate to your insurance agent in order to get a discount on your policy.
  • Discounts for Resident Students
    Some colleges do not allow freshmen who stay on campus to use their cars. Should you find yourself in this situation, notify your insurer so that they can place the appropriate discount on your policy.

There are many other ways to get cheaper car insurance, but many teens and young drivers may not qualify for them.  However, parents of teen drivers can utilize these tips to help reduce their overall insurance premiums.

Additional Information on Buying Your First Policy

Car Insurance for College Students

Some teens are able to avoid making changes to their auto insurance when they start college, but this is not the case for everyone. If starting college means moving out of state, renting an apartment, or buying a new vehicle, you should review your insurance policy.

Reviewing Your Policy

How does one go about reviewing an insurance policy? It is simple. Start by talking to your insurance agent about the changes you face as you go off to college. If you are moving out of state with no plans to return until you have completed your bachelor’s or master’s program, you may need to transfer your policy to another state. For students who plan on staying locally but have opted to move out of their parents’ home, it may be beneficial or even necessary to write a new policy.

Luckily, there is not much you will need to do if it is necessary for your policy to undergo major changes at this time. Your insurance agent will take car of most or all of the changes for you. Generally, the policy changes will boil down to paperwork on the agent’s end of things.

Choosing to Stay on Your Parents’ Policy

Not sure whether you should keep your coverage as-is or start your own policy? Here are some signs that you would be better off staying on your parents’ auto insurance.

  • You plan on going to college nearby and will not be moving out of your parents’ home.
  • You will be living on campus in a dorm at an in-state college or university.
  • You are moving to an out-of-state college, but will be living on campus and plan to move back home during the winter and summer breaks.
  • You have enrolled in a college that does not allow freshmen to have cars on campus.

Learn More About Insurance for College Students:

  • Companies Offering Cheap Car Insurance for College Students from NerdWallet
  • Affordable Car Insurance for College Students by State Farm
  • Get Cheap Car Insurance for Students by Nationwide

Safe Driving Tips for Teenage Drivers

The driver’s handbook is a great tool for new drivers who are learning the basics. While you should keep all of the essential rules of driving at the forefront of your mind, here are a few safety points to remember:

  • Helping friends out who need a ride is a great courtesy. However, you should keep your eyes on the road and try to keep distractions to a minimum.
  • Until you are comfortable driving after dark, you should avoid driving late at night since most fatal crashes happen during that time.
  • While you may be tempted to explore new routes home from school, you should choose one course and stick with it. Doing so will reduce your likelihood of getting lost or ending up in a dangerous area.
  • Drinking and driving is never okay. Even if you have only had one drink, never get behind the wheel.
  • Hang up and drive. Not only is texting while driving illegal in 46 states, there are also 14 states that prohibit talking while driving unless you use a hands-free device. The truth is, distracted driving can cause fatal mistakes.

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Accident Guide for New Drivers

You probably will not use your auto insurance until you are in an accident. When that time comes, it is best to have an understanding of how the claims process works and what to expect from your insurer. Here is a basic rundown of what you will go through when you need to file a claim.

First Steps to Take

As soon as you are in an accident and it is safe to do so, check to make sure that all involved parties are okay. If anyone has serious injuries, immediately call 911. For accidents that occur on a roadway, call the local law enforcement so a police report can be filed. Once police arrive, they may instruct you to move your vehicle out of the way of traffic if your vehicle is drivable. Simply move your car to the shoulder of the road or a nearby parking lot so the officer can take your information. Do not leave the accident at this time!

After speaking with the police officer, talk to the other driver/s involved in the accident and get their full name, phone number, and insurance information. You should do this whether you were at fault or not. You will need this information later. If you have a smartphone handy, it is a good idea to take a picture of the other driver’s insurance ID card so you do not lose their information. Once the police have left, you can call your insurance agent to report the accident and file a claim.

The Claim Process

When you file a claim on your insurance, you are asking the insurance company to pay for the repairs or replacement of something you own that was damaged. Alternatively, you may file a claim for damage that you accidentally caused to someone else’s property. So, what should you do if you cause an accident?

  • First, call your insurance agent and let them know the accident happened. Do this immediately after the accident occurs; do not wait.
  • Next, explain what happened to your agent. He or she will need to know where you were, what time of day it was, who was riding with you, etc. Then, you will need to give your agent all of the information for the driver you hit.
  • After a day or two, you and the other driver will be contacted by a claim adjuster or manager. He or she will take a statement from you detailing what happened.
  • Then, appointments will be made to have the vehicles inspected and repaired. If you have collision coverage, your insurance carrier will cover the damage to your vehicle as well as the other driver’s car. However, you will need to pay your deductible to the body shop.

More Resources on What to Do After an Accident

What To Do If You Get Pulled Over

No one really enjoys getting pulled over. But for teenagers who have not been driving for long, it can be especially stressful. Here are some tips if you find yourself in that situation:

  • Stay calm and do not get angry with the officer. Yelling or making threats will not help.
  • Do exactly what the officer asks you to do. Do not make any sudden movements or give him or her any reason to believe you may be pulling out a weapon.
  • Do not get out of the vehicle unless you are asked to do so.
  • If you wind up getting multiple tickets, it may be necessary to attend traffic school in order to prevent your driving record from being adversely affected.
  • Remember distracted driving is as serious an offense as speeding; nearly half a million people were hurt in car wrecks involving distracted drivers in 2014 alone.

Common Misconceptions Young Drivers Have

Think you know everything there is to know about car insurance? Think again. You may be falling victim to one of the many misconceptions teens believe about insurance. Do you know the truth about these myths?

Myth: Red cars cost more to insure.

Truth: Many insurers will not even ask for the color of your vehicle when they write your police. Despite what you may have heard about the color red causing people to become angry, red vehicles do not cost more to insure than any other color.

Myth: You cannot get pulled over for doing less than five over the speed limit.

Truth: Not all police officers will ticket drivers who are going slightly over the speed limit. However, the posted speed limit is the legal limit you may drive on that stretch of road and you can in fact be pulled over and ticketed for going faster than the limit, even if you are only two miles over.

Myth: Crying will get me out of a ticket.

Truth: Police officers have seen every possible reaction from traffic violators and they are no strangers to tears. Although the waterworks may get you out of a ticket once, if a cop sees that you have had multiple tickets or warnings, you probably will not be so lucky.

Myth: I will save a lot of time by speeding.

Truth: Some drivers are under the impression that they can make up lost time by speeding when they are running late. However, the truth is that speeding may not help you get to your intended destination as quickly as you thought. For example, if you have thirty miles to travel, and decide to go 65 mph, 10 miles over the posted speed limit of 55 mph, you would only shave 5 minutes off your drive time. In other words, the little amount of time you save probably is not worth the speeding ticket you could receive if you get caught.

Myth: Texting and driving is not a big deal. Everyone else does it.

Truth: While you may not see texting and driving as a major safety concern, the government would disagree with you. In fact, all but 4 states in the US have made texting while driving illegal. The statistics back up the law: according to the National Safety Council, over 1.6 million crashes every year are caused by cell phone use while driving. Do not put your fellow motorists’ lives or your own life in danger; the text can wait until you are off the road.

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Advice for Parents of New Drivers

Once your teen finally has his or her driver’s license in hand, you may feel that your job as a driving instructor is over. Truthfully, the reality is quite the opposite: now is the time to supervise your child and ensure their driving habits are excellent. Since car accidents are the number one cause of death for teens, it is absolutely essential that your child have a wealth of safe driving knowledge. Here are some tips to help you along:

  • Be patient. Your son or daughter is learning a new skill and they are bound to slip up. Try not to be too harsh when honest mistakes are made.
  • Set firm, realistic expectations and consequences. When rules are broken, stick to the agreed upon punishment.
  • Make sure your child has a safe vehicle to drive. Regularly check the condition of the tires, brakes, etc.
  • Lead by example. If you have told your teen not to text or talk on their cell while driving, or always buckle up before going anywhere, you should exhibit these same behaviors when you drive. “Do as I say not as I do” is never a good teaching tool.
  • Share the cost of driving. Teens who have to help pay for their gas, car insurance, oil changes, or car note tend to be more cautious when driving.
  • Restrict nighttime driving. The majority of fatal accidents occur late at night, so it is a good idea to limit or completely prohibit your teen’s time behind the wheel after dark.
  • Limit passengers. Although your teen may be excited to give their friends a ride, the more passengers riding in a vehicle translates to more distractions for your teen.
  • Talk about drowsy driving. Your child may not be aware of the dangers of driving while drowsy. Let him or her know that they should never get behind the wheel if they feel sleepy, and talk about alternative options to get to their destination.
  • Offer gentle criticism when necessary. Kids can take it pretty hard when their parents are overtly critical of their driving. If you do not think that you can delicately critique your child when they make a driving error, it may be a good idea to hire a driving instructor instead of doing the job yourself.

Looking for Even More Safe Driving Resources? Start Here:

More Information for Teenage Drivers

Receiving a driver’s license is one of the greatest privileges teens anticipate. However, that privilege is also a huge responsibility, as you must constantly ensure the safety of your passengers, fellow motorists, and yourself. While you may be tempted to ignore your parents’ teachings, remember that they truly want to keep you safe and are not imposing rules with the sole intention of ruining your fun. Here are a few tips to help you stay safe as you navigate the road:

  • Enroll in a Safe Driver program. While you may not be required to take a driving course, it can sometimes be easier to handle than having a parent teach you the ropes. Plus, your insurance company may give you a discount once you have completed the course.
  • If you have your driver’s license, you have probably been told more than once to avoid driving while intoxicated by drugs or alcohol. Additionally, you should also make sure to never ride with someone who has been drinking or doing drugs. If you have any doubts about your driver’s sobriety, find another ride.
  • Distracted driving is a real thing and the consequences are not pretty. Seventeen percent of all car wrecks are connected to distracted driving. In addition to texting or talking on you phone while driving, you should also avoid listening to loud music, refrain from carrying several passengers, and keep your eyes on the road– do not multi-task.
  • Always buckle up. Avoiding your seat belt because it does not seem cool could have fatal consequences. According to the National Highway Traffic Safety Administration, the majority of young drivers who were killed in car accidents were not wearing seatbelts. The facts do not lie: seatbelts save lives, so always make sure you are wearing one.
  • Stick to the speed limit. Not only is speeding dangerous, but it also does not help as much as you might think. If you notice you frequently tend to speed in order to get to destinations on time, you may need to plan on leaving earlier so that you can arrive in a timely fashion.
  • Lock up your stuff. You should never leave valuables out in plain sight, even at night. Theft is not always covered under auto insurance so you could be the one paying to replace your personal items that were stolen.
  • Stick to roads you know. It can be tempting to explore different routes from what you normally travel, but doing so could be dangerous. Going out of your comfort zone could result in getting lost or even getting into an accident if you wind up in a high traffic area.
  • Mind the weatherman. Even the best drivers can have problems when the weather is bad. Whenever possible, avoid driving in inclement weather. If you absolutely must be on the road, go slow and be extra cautious.

More Tips for Teen Drivers:

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