The Best Cheap Auto Insurance for Teens

Finding the best cheap auto insurance for teenagers is a matter of degree. The age and type of car, whether the teen is covered by their parents' insurance, the teen's age, gender, and academic performance are all factors.

However, there are numerous ways for teenagers to save money on insurance. Joining a parent's existing policy, for example, is usually much less expensive. Teens can also demonstrate responsibility and low risk by maintaining good grades, completing driver education courses, and practicing safe driving habits, all of which lead to lower rates.

Of course, price isn't everything; you don't want your teen driving with a rudimentary insurance policy. We'll look at teen car insurance premiums, cost factors, and how to save money on teen car insurance. We'll also discuss our top five auto insurance companies for teenagers.

The 5 best cheap car insurance for teens

• Great Overall: Geico
• Great Policies: Nationwide
• Great Customer Service: State Farm
• Great for Careful Driving: Progressive
• Great for New Driving: Erie Insurance

Great overall – GEICO

Teens on a tight budget will benefit from Geico's low-cost car insurance policy.

Geico is an excellent choice for young drivers on a tight budget. The company has some of the lowest rates and several discounts for teenagers. When your teen reaches the age of majority and is ready for their own policy, they can take advantage of the Family Pricing Program, which could reduce the cost of their first individual policy. Geico doesn't skimp on policy options, either — from emergency roadside assistance to mechanical breakdown coverage, you can tailor your policy to fit your needs, even if you're on a tight budget. You and your teen driver will also have access to a highly rated app that makes managing your and your teen's policy simple.

Great policies – Nationwide

Many teenagers can benefit from Nationwide's accident forgiveness program in their early driving days.

Nationwide provides a variety of coverages that can be beneficial to a teen driver, such as roadside assistance and accident forgiveness. In fact, we discovered that Nationwide has one of the most coverage options, with 15. Furthermore, the SmartRide program allows you to install a device in your teen's car to monitor safe driving habits, encouraging your teen to stay safe and potentially lowering your insurance rate. Other options for rate reductions include good student and accident-free discounts.

Great customer service – State Farm

Obtaining car insurance as a young driver can be difficult, but with a State Farm policy, you can work with helpful agents or use online support tools to simplify the process.

State Farm provides excellent customer service and claims management. In fact, J.D. Power ranks this auto insurance provider in the top five in nearly every region of the United States, including first in the Mid-Atlantic with a score of 855 out of 1,000. State Farm, on the other hand, does not always offer the best deal. But don't worry, there are still plenty of discounts available for teens, including a significantly reduced rate if your teen attends school for the majority of the year without a vehicle. If your teen drives safely, they can sign up for the Steer Clear® program and potentially save money.

Great for careful driving – Progressive

Progressive is our recommendation for young drivers who practice safe driving habits both with and without their parents in the car.

Progressive is a great car insurance company for teen drivers who drive safely. Progressive, like Nationwide, offers a safe driving device called Snapshot, which has a $145 average discount. GAP insurance is also available from the provider, which may be useful for teens who are driving a newer car that has not yet been paid off. When you share your Progressive policy with your teen driver, he or she will have access to the same policy limits and coverage options as you, including liability limits, roadside assistance, and disappearing deductibles. In addition, if you add a teen driver, your policy may be eligible for the teen driver discount.

Great for new driving – Erie

New drivers who have recently obtained their license may benefit from Erie's young driver discount and comprehensive coverage options.

J.D. Power ranks this insurance company highly for customer satisfaction in the regions where it is available, which include the Mid-Atlantic, North Central, and Southeast. The company offers the Youthful Driver Discount to young drivers under the age of 21 who live with their parents. Another teen-related discount is a driver training course for drivers under the age of 21. In addition, Erie offers the Youthful Longevity discount, which allows unmarried young drivers to receive a credit for consecutive years spent insured under another Erie auto policy (such as a parent's policy). Erie also provides a variety of coverage options that are ideal for teen drivers, such as first-accident forgiveness and a rate lock guarantee.

How much does teen car insurance cost?

You may have heard that auto insurance costs less as you get older when you're under 25, but there is an unintended consequence of getting older when you're in that age group. If you leave your parents' insurance when you reach the age of 18, your premiums may skyrocket. The premiums listed below are the average annual full coverage premiums for men and women of various ages.

*Students were on parents’ insurance.

Bankrate utilizes Quadrant Information Services to analyze 2021 rates for all ZIP codes and carriers in all 50 states and Washington, D.C. Rates were determined by adding a 16- or 17-year-old teen to a 40-year-old married couple’s policy. The parent driver rates were calculated with a clean driving record and good credit.

Why is there such a disparity? It's partly because of inexperience. According to the Centers for Disease Control's teen driver fact sheet, the following are some of the factors that make teen drivers a risk to insurance companies:

• Inexperience. Teens frequently struggle to recognize potentially dangerous situations.
• Nighttime and weekend driving. The CDC reports that in 2018, 37% of motor vehicle crash deaths among teen drivers and passengers ages 13–19 occurred between 9 p.m. and 6 a.m., and 52% occurred on Friday, Saturday, or Sunday.
• Seat belts were not worn. According to the National Occupant Protection Use Survey Controlled Intersection study, people aged 16 to 24 were consistently less likely to wear seat belts than adults aged 25 and older from 2010 to 2019.
• Driving while distracted. According to the 2019 U.S. High School Youth Risk Behavior Survey, 39 percent of high school students reported texting or emailing while driving.
• Speeding. According to the CDC, teens are more likely than older drivers to speed and allow for shorter headways (the distance from the front of one vehicle to the front of the next).
• The use of alcohol. According to the Youth Risk Behavior Survey, 5.4 percent of teens reported driving under the influence in 2019, while 16.7 percent reported riding with a drunk driver.

The CDC advises parents to warn their teen drivers about the following:

1. Inexperienced driver
2. When driving with a teen passenger
3. Driving at night
4. Seat belts are not worn.
5. Driving while distracted
6. Driving While Drowsy
7. Dangerous driving
8. Driving while intoxicated

How to get cheaper car insurance for a teen  

Join a parent’s policy

Adding a teen to an existing parent's policy may be a way to save money on a teen's car insurance policy. Even if your teen has graduated from high school and you own or co-own their vehicle, you should consider keeping your adult child on your insurance because your multi-car or multi-driver discount can reduce their costs.

Use all available discounts

You can also save money by asking about specific discounts that teens may be eligible for. Discounts like:

• Discounts for good students: If your student gets good grades, your car insurance provider may be willing to offer them a lower rate in exchange for demonstrating responsibility. Geico, for example, provides discounts to students with a B average or higher.
• Student away discounts: Does your teen spend the majority of the school year away from home, unable to use the family's vehicles? If this is the case, notify your insurance provider. Many companies will reduce your rates when your teen is not actively driving.
• Low-mileage discounts: Although almost anyone can qualify for a low-mileage discount, teens are usually a better fit for this type of discount because they don't drive as far as most adults. If your teen only drives to and from school, ask your insurance provider for a discount.
• Discounts for safe driving: Technology is transforming the automobile insurance industry. Many service providers offer smartphone apps or devices that can track your teen's driving habits. Not only will this encourage your teen to be more cautious on the road, potentially lowering their risk of an accident, but your provider may also reduce their insurance rate.

Pick a cheap car to insure

The car your teen drives has an impact on the policy's rates as well. You can reduce the impact on your premiums by selecting a car that is less expensive to insure. According to Kelley Blue Book (KBB), the Honda Odyssey LX, Jeep Wrangler Sport, and Subaru Outback are the least expensive cars to insure.

How much coverage does a teen need?

Every state has a minimum amount of insurance that all drivers are required to carry. Florida, for example, requires 10/20/10, whereas Alaska requires 50/100/25. (In Florida, this means coverage must include up to $20,000 in total liability in an accident [middle number], subject to a limit of $10,000 for liability for each person [first number], and $10,000 for property damage liability [last number].)

Having said that, there are some optional coverages that can be useful. Teens should think about the following types of insurance:

• Collision: Collision coverage pays for damage to your vehicle after a collision if you are at fault or collide with an object.
• Comprehensive: Comprehensive coverage pays for vehicle damage caused by events other than an accident. Consider adding this coverage if you live in an area prone to extreme weather or animal crossings.
• Uninsured/underinsured motorist coverage: This type of coverage protects a driver if they are involved in an accident with someone who is not insured or has insufficient insurance to cover their losses. This coverage extends to hit-and-run incidents as well.
• Medical payments: Medical payments coverage will help pay for a driver's or a passenger's injuries after an accident, regardless of who is at fault.
• Accident forgiveness: Accident forgiveness is often an optional coverage, but if your provider provides it, it can be a lifesaver for a young driver.

Factors that affect premiums

When determining auto insurance premiums, insurance companies consider a variety of factors, including:

• Age: Younger drivers have less driving experience and are statistically more likely to be involved in an accident, which increases their risk to insurers.
• Driving record: Because teenagers don't have much of a driving record, insurance companies can't predict how safely they'll drive, so they charge more to compensate.
• Credit score: Creditworthiness is used as a measure of responsibility and has been linked to the likelihood of a driver filing a claim. Teens are once again at a disadvantage in this situation because they have little or no credit history to demonstrate their responsibility.
• Where you live: Expect higher rates if you live in an area with a high risk of car theft, for example. Auto insurance premiums in cities are generally higher than in rural areas. Rates are also affected by the coverages mandated by your state.
• Your mode of transportation: Vehicles with high safety ratings and safety equipment, such as anti-lock brakes or an anti-theft device, can help you save money on auto insurance.
• Describe your gender: Although some states have prohibited the use of gender in rating policies, statistics show that women are less likely to be involved in an accident than men, so they are typically quoted lower rates, particularly during their adolescence. Sorry about that, guys!
• Marital status and education level: Having a college degree and being married both lower car insurance rates because of a lower perceived risk. Unfortunately, most teenagers will suffer as a result of this.
• Your level of coverage: You can expect to pay more if you choose higher coverage limits or optional coverages such as accident forgiveness or rental car reimbursement over the state minimum.