How Much Is Insurance for a New Driver? Everything You Need To Know

How much is insurance for a new driver? If you have a new driver’s license or have not driven for several years, your auto insurance coverage will cost more than for more experienced drivers. Over time, you will qualify for continuous insurance discounts as well as a reduced cost based on your age and driving experience.

How Much Will New Drivers Pay for Auto Insurance?

On average, a 17-year-old female will pay 103 percent more for an auto insurance policy than a 25-year-old woman would pay for a comparable policy. Because teenage boys have a much higher risk of auto accidents than adolescent girls do, they tend to pay much higher auto insurance rates. A 17-year-old male pays about 196 percent more for the same policy than a 25-year-old male would. For most people, auto insurance premiums start to decline when they turn 25. However, you will continue to pay high rates if you have several accidents or claims in your history.

Why Do New Drivers Pay More?

Shorter driving history and less experience mean that insurance companies take a higher risk when offering you auto coverage. In addition, the young age of most new drivers plays a role in the cost. Data shows that teen and young adult drivers have a higher rate of auto accidents as well as higher rates of distracted and impaired driving, according to information reported by Wallet Hub.

Policy Genius compares the higher cost of auto insurance for new drivers to the higher cost of mortgages and other types of loans for drivers with limited credit history. The more expensive premium allows insurers to mitigate their risk, just as lenders lower risk by charging a higher interest rate.

The website The Truth About Insurance lists these factors that go into the calculation of your auto insurance premium:

  • History of having valid auto insurance.
  • Geographic location and ZIP code.
  • Vehicle make, model, and year.
  • Credit score.
  • Driving history, particularly any history of insurance claims or violations.
  • Driver age.

    How Can I Save on Auto Insurance?

    The Zebra blog recommends that drivers of all ages get several quotes from different companies when shopping for an auto insurance policy. For best results, contact both online auto insurance companies and small local insurance agents who work independently so you can compare rates. Remember that large companies using massive TV advertising budgets to attract new clients may dedicate fewer resources to keeping existing clients happy.

    Don’t be shy about asking for discounts. The website Moneyshake notes that you might qualify for a variety of money-saving programs, both through your state and individual insurance companies.

    Good-student discounts commonly help young drivers save on auto insurance. You might qualify if you are not yet 25 and have at least a 3.0 average in high school or college courses. Ask insurance agents about these programs when you shop around for quotes, but be ready to submit an official grade report to save.

    Already in the workforce? There might be a discount for that too, depending on your occupation. Many companies offer more affordable auto insurance for teachers and law enforcement officers based on data that says these groups file claims less often. As with the good-student discount, prepare to provide proof.

    Choose your vehicle wisely if you want to save on auto insurance. Luxury vehicles cost more to insure because they will cost more to repair if damaged or stolen. You’ll pay lower rates with an affordable, safe car that’s a few years old. Taking advantage of available safety features can also decrease your auto insurance premium depending on the company.

    If you’re a teen or young adult, consider staying on a parent’s auto insurance policy if at all possible. Ideally, you will benefit from their driving history, insurance history, and credit rating. In fact, you might save thousands per year compared to the cost of having your own policy. This might not be an option if you are a college student who lives away from home and has a car at school.

    When you have an older car, you may be able to save by opting for the minimum amount of auto insurance in your state. If you finance or lease a vehicle, you will have to pay for costly full comprehensive and collision coverage based on the terms of your loan or lease.

    Choosing the right company can lower your auto insurance premiums. The Zebra reports that USAA, Nationwide, and GEICO usually offer the most affordable new-driver policies.

    When you decide on a policy, selecting a high deductible can lower your premium. The deductible is the amount you pay toward repairs or medical bills if you have an auto insurance claim. For example, the premium you pay for a policy with a $2,000 deductible will be much lower than one with a $250 deductible. Keep in mind, however, that you would have to pay $2,000 out of pocket in this scenario if you have an accident.

    If you have average or poor credit, improving your score can positively impact the amount you pay for auto insurance, even as a young driver. For example, if you have perfect credit, you could pay just 65 percent of the premium cost for a new driver with a spotty credit history. Paying your bills on time eventually will lower your premium.

    Consider a defensive driving course if you struggle to afford the cost of auto insurance. Many insurers offer a discount if you can present proof of completing a safety course. Depending on where you live, your state might even provide incentives for defensive drivers.

    If you own or rent a home, you can potentially save by bundling your homeowner’s or renter’s insurance policy with your auto insurance policy. Some companies might also offer bundles with other policies, such as life insurance.

    The high cost of auto insurance can be daunting for many young drivers. With these strategies, you can potentially save on your car insurance premium even if you just recently earned your license.


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