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Are you a new driver under 25? Then you’re probably starting to look for car insurance – and are worried about how much it’ll cost you.
Well, I’ll be completely honest with you – young drivers do have to invest more in car insurance, so you are likely to pay more than your parents or older friends do.
But there are ways to save on car insurance – even if you’re new to the whole game.
In this post, I’ll list the best car insurance companies for new drivers under 25 – as well as tell you more about what’s likely to impact the cost of car insurance if you’re a new driver, and a young adult.
When it comes to insuring a car for new drivers under 25, there are a few different auto insurance companies that you might want to consider.
Different companies will typically excel in various areas, and as such, which one you go with will ultimately depend on what you are looking for and your circumstances.
9 Companies with the Best Car Insurance for New Drivers Under 25
Allstate offers many options specifically designed for under 25s, one including for those who are full-time students with good grades or have completed driver education programs. Allstate also offers some extras, including accident forgiveness and an app that rewards safe driving, among others.
- Get good grades for discounts on insurance premiums.
- Complete driver education programs.
- Download Allstate’s Drivewise app and drive safe.
Allstate Car Insurance Allstate offers a Smart Student Discount to drivers under the age of 25 if you meet their requirements. You can also get a multiple policy discount if you bundle in your renters insurance with Allstate.
Metromile’s entire business model rests on pay-per-use, where a low monthly base rate is charged over which a per-mile rate is also payable. This kind of model allows you to cut back on usage should you experience some unexpected expenses.
Miles are measured using the Metromile Pulse, which attaches to your car’s ODB port for accurate readings.
- Pay a low base rate + per-mile rate.
- Save an average of $741 per year.
- Applicable rates depend on age, credit history, and type of vehicle, among others.
Liberty Mutual also offers different discounts, including simply asking for a quote before your current policy expires. Doing so can help you save up to 45%. GPAs of B or better are also rewarded with discounts as is good driving behavior.
While most hybrid and electric cars might not draw envy from your friends, Liberty Mutual is more than happy to give you a discount, helping you save the environment and your wallet.
- Drive green and spend less.
- Shop early to get great discounts.
- Pay attention in class and on the road.
Progressive offers many discounts you’ll see when your insurance bill takes on some serious reductions. Do everything online from getting a quote to signing online, and you could be eligible for several discounts.
Take out another policy with Progressive, and you could be entitled to the multi-policy discount, which will help you stick around for the Continuous insurance policy discount. Good grades and safe driving may also entitle you to discounts from this company.
- Combine policies to receive discounts.
- Get your insurance online to save money.
- Stick with Progressive to get loyalty discounts further down the road.
Esurance is an Allstate insurance company that offers discounts on policies, driving habits, and your car’s safety features. Save up to 5% simply but taking out your policy online and save up to 10% if you pay in full instead of monthly.
If you have renters insurance, combine it with your car policy to save 30% on your renters premium. Excellent students with a B average or higher can also save up to 10% on several coverages.
- Combine with renters insurance to reduce your renters insurance premium.
- Improve your grades for better discounts.
- Pay online to save even more.
Travelers offer discounts too, starting with affinity programs. If you are a member of any association, credit union, or if you are an employee, checking if the organization is a member of an affinity program should be your first port of call.
Opting into different payment options can also entitle you to discounts, including EFT and payroll deduction payments. Good students, early birds, and those driving a car that is not older than three years can also get good discounts.
- Ask about affinity programs with organizations you’re a member of.
- Pay on time for up to 15% off.
- Maintain good grades.
USAA auto insurance is a great choice if a family member is already their client. As a new driver, you will benefit from a 10% discount just by following in their footsteps.
They also offer great discounts, such as a good student discount for keeping your grades high, new drivers discount, and many more.
The USAA mobile app allows you to complete most tasks from your smartphone, which can be a great timesaver. Another feature offered by USAA is flexible payments, allowing you to customize your payment plan according to your income without any extra charges.
- 10% off if your parents already have insurance with them.
- Beginner drivers under 21 discount when completing a training course.
- Good student discounts.
State Farm Insurance has a special savings program for youth under 25 years old called Steer Clear. You will qualify if you’ve had your driver’s license for at least three years and caused no accidents, and if you’ve completed a program that includes lessons, videos, and quizzes, plus 5 hours of driving.
The Steer Clear program will teach you good driving habits as well as help you save up to 15%. State Farm also offers a Student Away discount, applicable if you are a student under 25 and only drive when back home and a Good Student discount for those under 25 with good grades.
- 15% discount with Stear Clear
- Student Away at School discount if you only drive when back at home
- Good Student discount up to 25% for good grades
There are many ways to save with Geico car insurance. You can save up to $200 by merely switching to Geico. All students under 25 can also benefit up to 15% by having B grades or better with discounts also applicable when completing a driver’s education program.
Drivers can also benefit from many other discounts, such as good driver discounts, membership and organization discounts (your college might be on the list), and many others.
- Being a good student can save you up to 15%
- Membership and organization discount
- Switch to Geico and save up to $200
Cost Factors of Car Insurance for New Drivers
Several different factors affect how much insurance new drivers under 25 pay. While age is, of course, a factor, it pays to understand which other factors contribute to a higher car insurance cost. Some of these factors are outside of your control, but others can be easily managed, allowing you to take steps in lowering your insurance.
- Your age. Age is a primary factor, and of course, there isn’t much you’re able to change here. Younger drivers have less experience on the road and are thus more susceptible to accidents.
- Your gender. Studies have shown that women are less likely to be involved in a collision. The good news is that it gets more manageable from here on.
- Your driving history. If you have a history of reckless driving, your insurance premium is going to reflect it. If not, the cost of your car insurance is eligible for its first discount. We cannot change history, but remember that today is tomorrow’s history.
- The value of your car. More expensive vehicles demand higher premiums since they are costlier to repair should this be required. A more modest car can save you money on the purchase price and your car insurance, helping you save more cash as you go along.
- Your credit history. With the exception of a few states, insurance companies are allowed to take your credit history into account when working out your car insurance. Pay on time to avoid unnecessary default and insurance costs.
- Other people insured to drive your vehicle. The more people that are insured to drive your car, the higher your insurance cost is going to be. Limit the number of people that can drive your car. Charge them and drive them yourself to save and make money at the same time.
- How many miles you drive. The more miles you drive, the higher the risk of an accident, and your insurance will most likely reflect that. Limit car usage to the absolute necessity and walk or bike wherever you can.
- Where you live. Insurance companies do not like high-risk areas known for car theft, especially if you do not have a garage where to park at night. While moving might not necessarily be an option, security devices such as car alarms and immobilizers can limit the financial pain and keep your car secure.
How To Save Money On Car Insurance For New Drivers Under 25
Now that you know more about which companies to use for car insurance when you’re a young adult let me share with you a few more tips on how to reduce the cost of car insurance when you’re an adult under 25.
With many insurance companies offering sign-up bonuses, shop around to see which ones offer the best deals
Almost all companies offer rewards for safer driving. Not only will driving safer save you money, but it could also save your life.
If you have other policies such as health or renters insurance, you could save money by combining them.
Drive Less to Save More
The more you drive, the higher, the risk with some insurance companies offering lower premiums for driving less. Not only is driving less good for your pocket, but it also has benefits for the environment and your health.
And now – want to know more about how you can save on car insurance? Check out my list of 7 best cheap car insurance companies.