What Is the Cheapest Car Insurance for Young Drivers?

Last Updated on January 30, 2026

Young drivers almost always pay the highest car insurance rates because they have less experience and are statistically more likely to be in crashes. In many cases, drivers under 25 pay two to three times more than drivers in their 30s for the same coverage. The good news? Modern insurers now offer more flexible tools—like usage-based tracking and good-student rewards—to help responsible young drivers pay a lot less.

If you’re a teen, college student, or driver in your early 20s, you’re not stuck with sky-high prices forever. Below, we explain how to get the cheapest car insurance as a young driver, which coverage limits you can safely reduce, and when it’s worth paying more for better protection.

Key Takeaways

• Young drivers often pay two to three times more for car insurance than older drivers, but choosing minimum liability coverage can dramatically reduce monthly costs.
• Staying on a parent’s policy is usually cheaper than buying your own, even though it can significantly increase your parents’ premium.
• Good student discounts, defensive driving courses, and app-based telematics programs can easily shave 10% to 30% or more off a young driver’s rate.
• The cheapest strategy is to combine minimum required coverage, family policies, discounts, a safe inexpensive car, and clean driving habits—then let your rates drop naturally as you get older.

How Much Does Car Insurance Cost for Young Drivers?

Costs vary by state, vehicle, and driving record, but young drivers almost always pay more than average:

• Teens and new drivers (16–19) on their own policy often pay hundreds of dollars per month for full coverage.
• Young adults (20–24) still pay well above average, though rates begin to drop each year you drive without tickets or accidents.
• By your late 20s and early 30s, your rates are much closer to what experienced drivers pay—especially if you’ve built a clean record and good credit.

What you pay also depends heavily on coverage level. For a young driver, a minimum liability policy can cost less than half of what a full-coverage policy (with collision and comprehensive) would cost. That’s why choosing the right coverage is the fastest way to lower your bill.

The Cheapest Car Insurance Is a Basic Liability Plan

Every state requires drivers to have some type of liability coverage. This type of insurance pays for injuries and property damage you cause to others in a crash.

If you want the absolute cheapest legal car insurance as a young driver, there’s nothing wrong with getting basic liability coverage that meets your state’s minimums. It allows you to drive legally without paying for extra protections you might not need yet.

What Basic Liability Coverage Includes

Bodily Injury Liability Coverage: This coverage pays for other people’s medical bills, lost wages, and related damages when you cause an accident. It does not pay for your medical bills.

Property Damage Liability Coverage: This coverage pays to repair damage you cause to someone else’s property—like another driver’s car or your neighbor’s fence.

Certain states have additional minimum requirements. Drivers in North Carolina, for example, must carry uninsured and underinsured motorist coverage, which protects you if you’re hit by a driver who has no insurance or not enough insurance.

By matching your state’s minimum requirements, you can drive legally while paying the lowest possible premium. For many young drivers with older cars and tight budgets, this is the starting point for the cheapest coverage.

To keep costs down, compare basic liability quotes from both traditional and digital insurers. GEICO, USAA, Progressive, Lemonade, Hugo, and Clearcover often compete for the best rates among young drivers, depending on your state and profile.

You can also explore pay-per-mile and app-based plans like Metromile or Root, which base your rate on how safely and how often you drive—ideal for students or remote workers who drive less than average.

The Downside of Basic Liability Coverage

The big catch with minimum liability coverage is that it doesn’t protect your own car. You’re saving money on premiums, but you’re giving up important protections:

No Collision Coverage: Collision coverage pays to repair or replace your vehicle after an accident, regardless of fault (up to your policy limits). Without collision coverage, you pay out of pocket if you hit another car, a pole, or a guardrail—especially painful when you’re on a student budget.

No Comprehensive Coverage: Comprehensive coverage pays to repair or replace your vehicle after non–collision events, such as theft, vandalism, hail, or a tree branch falling on your windshield. If your car is involved in a hit-and-run or damaged by a fallen tree, you’d typically file a comprehensive claim. With minimum liability only, those repairs are on you.

These extra coverages are particularly important if you:

• Drive a newer or higher-value car
• Have a loan or lease (your lender will almost always require full coverage)
• Can’t afford to replace your car out of pocket

However, they’re less critical for older, cheaper cars. If your vehicle is only worth a few thousand dollars, then it may not be worth maintaining collision or comprehensive coverage. After even a moderate accident, your insurer may declare the vehicle a total loss anyway.

Pros and Cons of Sticking With Basic Liability Only

As a young driver, carrying basic liability coverage is one of the cheapest ways to get insured. But it’s not right for everyone.

Pros

• Lowest premiums: It offers the cheapest possible legal car insurance.
• Meets state requirements: You’re legal to drive as long as you meet your state’s minimum limits.
• Great for older cars: You avoid paying extra to insure a vehicle that isn’t worth much.

Cons

• No protection for your car: It does not cover your own vehicle for accidents, theft, vandalism, storm damage, etc.
• Lawsuit risk: If you cause a serious accident, your state’s minimum limits may not be enough, leaving you personally responsible for the rest.
• Very low minimums in some states: Certain states have low liability minimums that can leave you dangerously underinsured.

Overall, it’s up to you to decide how much financial risk you’re comfortable with. Maintaining basic liability coverage can save you thousands per year, but it also means you’re accepting the risk of paying out of pocket if something happens to your car.

Get Listed Under Your Parents’ Policy to Save Money

One of the single biggest ways for a young driver to save is to stay on a parent’s insurance policy instead of buying your own.

In fact, most car insurance companies require you to be listed as a named driver on your parents’ policy as long as you’re living at home and regularly driving their vehicles.

Your parents are (hopefully) experienced drivers with a longer insurance history. They may have additional discounts available – like safe driving discounts or bundling discounts for home and auto.

As a young driver, being added to your parents’ policy will increase their premium—but it’s usually far cheaper than buying your own policy. Recent industry analyses show that adding a teen can increase a family’s bill by roughly the cost of a couple hundred dollars per month, while a separate teen policy can cost several hundred per month on its own.

For example, your parents might pay around the national average for a full-coverage policy. Once you’re added, their premium could jump significantly—but your share of the combined bill will usually be less than taking out your own separate policy, which for a teen or 18-year-old can easily run into the thousands annually.

If you are away at college and rarely drive, make sure your parents tell the insurer. Many companies offer a special “student away” discount when you live a certain distance from home and don’t keep a car on campus.

No matter what age you are, if you still share a household and vehicles with your parents, you’ll almost always get cheaper coverage by being on their policy instead of buying your own.

Take Advantage of Young Driver Insurance Discounts

Car insurance companies offer dozens of discounts, and many are designed specifically for teens, college students, and 20-somethings. Make sure you’re asking about all of these.

Good Grade Discounts

Many insurers reward academic performance with Good Student Discounts of roughly 10% to 25% off certain coverages. If you’re a full-time student with at least a 3.0 GPA (B average), you can usually qualify. Several insurers also offer “student away” discounts for college students living more than 100 miles from home who rarely drive their parents’ cars.

Defensive Driving Course Discounts

Did you complete a driver’s ed or safety course? Many companies offer discounts of 5% to 15% for taking an approved defensive driving course or driver training program. These classes reduce crash risk, and insurers are happy to share a bit of the savings with you.

Driver Tracking Device & App Programs

Nearly all major insurers now offer telematics programs that track your driving via an app or plug-in device. Programs like DriveEasy (GEICO), SmartRide (Nationwide), and Drivewise (Allstate) can offer sizable discounts to safe drivers.

Newer companies—like Root, Mile Auto, and Lemonade Car—build your rate around this data from day one. If you mostly drive during the day, avoid hard braking and speeding, and keep your annual mileage low, these programs can be a powerful way for young drivers to pay less than traditional averages.

Important: some telematics programs can raise your rate if they see a lot of risky behavior. If you sign up, commit to truly safe driving—especially at night and on weekends.

Good Driver / Claims-Free Discounts

Are you a good driver? You can earn a discount for every year you go claims-free and ticket-free. As a young driver, these discounts may take a few years to build (typically 3 to 5 years), but once active, they can save you hundreds per year.

Paid-in-Full & Automatic Payment Discounts

Some young drivers split car insurance into manageable monthly payments. Others get a small discount for paying their car insurance in full. You can often save around 3% to 5% by paying the entire six-month or annual premium upfront. Many insurers also offer a small discount for automatic bank payments.

Equipment and Safety Feature Discounts

Driving a newer vehicle with advanced safety features can also lower your bill. If you have the latest safety features—such as automatic emergency braking, lane-keep assist, or extra airbags—you may save 5% to 10% or more on certain coverages. Many young drivers use older vehicles with fewer features, but if you do drive a newer car, ask about available safety discounts.

Other Ways Young Drivers Can Lower Their Rates

• Choose the right car: Modest, older sedans and hatchbacks are usually cheaper to insure than sports cars, luxury models, or heavily modified vehicles.
• Raise your deductibles: If you carry collision or comprehensive, choosing a higher deductible (like $500–$1,000 instead of $250) can noticeably lower your premium—as long as you can afford that amount if you have a claim.
• Drive fewer miles: If you don’t drive much (for example, you walk to class and only drive on weekends), ask your insurer about low-mileage, pay-per-mile, or usage-based plans.
• Share a car instead of owning your own: Many families keep costs down by having a teen or college student share a family vehicle rather than insuring a separate car just for them.
• Keep tickets off your record: Speeding tickets, DUIs, and at-fault accidents hit young drivers especially hard. Staying citation-free for a few years is one of the most powerful “discounts” you can earn.

Wait to Get Older (Seriously)

There are only so many things you can do to get cheaper car insurance as a young driver. At some point, your rate is as low as it’s going to get for your age. That’s why one of the best “strategies” is simply to wait to get older.

As you age and maintain a safe driving record, your premiums can drop dramatically. Once you reach your late 20s and early 30s, your car insurance rates are fairly close to the lowest they’ll ever be. You pay the highest rates between ages 16 and 25, but your costs usually fall a bit every year you stay accident- and ticket-free.

Which Companies Offer the Cheapest Car Insurance to Young Drivers?

Some insurance companies actively compete for young drivers, while others would rather focus on older, lower-risk customers. That’s why switching insurers can sometimes save a young driver hundreds per year—for the exact same coverage.

Certain companies are known for offering competitive prices to drivers of all ages. GEICO, USAA, and Nationwide, for example, all tend to offer cheap premiums in many markets. In some states, regional insurers or smaller companies beat the big names for teen and college-age drivers.

However, rates vary widely by ZIP code, vehicle, and driving history—especially for young drivers. The company that’s cheapest for your friend might be expensive for you. That’s why we always recommend comparing at least three to five quotes before deciding.

FAQs on Cheap Car Insurance for Young Drivers

Final Word on Cheap Insurance for Young Drivers

The cheapest way for young drivers to stay insured is usually to meet your state’s minimum liability requirements, stay on a parent’s policy when possible, and stack every discount you can find.

Use driver-tracking apps, good student discounts, and bundled family policies to cut costs even further. Choose an inexpensive, safe vehicle, keep your record clean, and revisit your quotes every year or two.

Most importantly, remember: your rate won’t be this high forever. Every year of safe driving moves you closer to affordable, full-coverage insurance—and long-term savings that stick with you well past your 20s.