Teenagers and young adult drivers pay some of the highest rates for car insurance. The high car insurance rates from your teen years may not start dropping significantly until you reach your mid-20s. However, purchasing your own policy can come with benefits, such as access to more discounts.
Most states require at least liability coverage by law, though having a more complete policy is strongly recommended. Since budget is likely a big factor in your decision when buying car insurance, it's helpful to shop around and compare rates from several reputable companies.
A local independent insurance agent can do this for you and help you find the best affordable car insurance. Using a car insurance calculator can also give you a better idea of how much you can expect to spend on your policy.
Whether you value cheap rates or digital tools, here are some of the best car insurance options for young adult drivers, broken down by category.
The 6 Best Car Insurance Companies for Young Adult Drivers in 2025
- Best Car Insurance for Young Adults for Low Rates: USAA
- Best Car Insurance for Young Adults for Discounts: Auto-Owners Insurance
- Best Car Insurance for Young Adults for Customized Policies: Nationwide
- Best Car Insurance for Young Adults for Digital Tools: Progressive Insurance
- Best Car Insurance for Young Adults for Local Agencies: Safeco
- Best Car Insurance for Young Adults for Accident Forgiveness: Liberty Mutual
Best Car Insurance for Young Adult Drivers for Low Rates: USAA
When it comes to reliably low base rates for young adults, USAA is second to none. The carrier offers car insurance policies to young adults starting at just $161 per month or $1,936 annually.
With over a century of experience and an "A++" rating from AM Best, USAA has plenty to offer. Its mobile app and website simplify coverage management and claims filing experiences. However, USAA's coverage is only available to military members and their families.
USAA earned the top spot for low rates compared to many other carriers we studied. It offers ample discounts, including new vehicle, multi-car, annual mileage, and vehicle storage. If your parents previously had a USAA policy, you might even be eligible for a family discount.
| Pros: | Cons: |
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Affordable premiums
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Not BBB-accredited
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Numerous discounts
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Some mixed customer feedback
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"A++" AM Best rating
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Coverage is only available to military members and their families
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Best Car Insurance for Young Adult Drivers for Discounts: Auto-Owners Insurance
Auto-Owners was founded in 1916 and has an "A+" rating by AM Best. The carrier also offers a long list of discounts for young adults, as well as three savings programs specifically designed for young drivers. Good student discounts, student-away-at-school discounts, and more are available.
The insurance company also offers a teen monitoring discount, which evaluates driving habits using a GPS system in the car. Good driving behavior is rewarded with monthly savings. A 20-year-old driver can expect to pay an average of $3,006 annually for coverage. The drawback to Auto-Owners insurance is that it's only available in 26 states and D.C.
| Pros: | Cons: |
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Numerous discounts
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Coverage is only available in 26 states and D.C.
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Numerous endorsements
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Premiums may be higher than other carriers
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Rewards for good driving behavior
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Below-average ratings from J.D. Power for digital experience
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Best Car Insurance for Young Adult Drivers for Customized Policies: Nationwide
If you're a fan of customized coverage, Nationwide could have the perfect solution for you. Since 1926, Nationwide has provided comprehensive coverage options, and it’s been BBB-accredited since 1955. The company has strong financial ratings across the board, including an "A+" from AM Best.
Nationwide offers numerous add-on coverage options for young drivers to customize their policies, including gap insurance and roadside assistance. Young drivers can also score discounts if they enroll in the carrier's SmartRide program, which monitors driving behaviors and offers a 10% discount just for signing up.
Savings of up to 40% are available for good driving habits. Nationwide can also help infrequent young drivers save money with its SmartMiles pay-per-mile program.
| Pros: | Cons: |
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Numerous endorsements
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No coverage available in Alaska, Hawaii, Louisiana, or Massachusetts
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Financially stable carrier
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Lower-than-average claims satisfaction scores on a recent J.D. Power survey
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Multiple savings programs
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Best Car Insurance for Young Adult Drivers for Digital Tools: Progressive Insurance
Progressive Insurance is another long-standing, reputable carrier, with over 80 years of experience and an "A+" rating from AM Best. The company originally focused on auto insurance, and that legacy is reflected in features such as Progressive’s Name Your Price® tool and guarantee-backed repairs from in-network shops.
With a robust website, a powerful mobile app, and the Snapshot program, Progressive provides a complete digital experience. The app allows you to file and track claims, request changes, pay your bill, and more. In addition, the Progressive website includes useful calculators and detailed insurance information.
| Pros: | Cons: |
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Almost fully digital experience from start to finish
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Only available in 40 states
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Plenty of discounts to offset higher premiums
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Poor BBB rating
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Ranked third in customer satisfaction for digital experiences from J.D. Power
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Lower-than-average customer satisfaction rating from J.D. Power
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Best Car Insurance for Young Adult Drivers for Local Agencies: Safeco
Backed by a century of experience and an excellent rating from AM Best, Safeco has an expansive network of local agents and a solid standing with the BBB. Owned by Liberty Mutual, Safeco offers customizable options, affordable rates, an online customer portal, and 24/7 claims reporting.
If you value local agents, Safeco is the place to go. The company works exclusively with independent insurance agents to help guarantee a knowledgeable experience custom-tailored to your needs, particularly those unique to your geographic area.
| Pros: | Cons: |
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Works solely with independent agents
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Poor customer reviews
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Fewer than 1,000 complaints through BBB over past year
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Missing information on website (reviews, customer service hours, claims process, etc.)
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Serves almost all states
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Not available in Hawaii and parts of New England
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Best Car Insurance for Young Adult Drivers for Accident Forgiveness: Liberty Mutual
With Liberty Mutual, you only pay for the coverage you need. And for teens and young adult drivers just starting out, every penny counts. This insurance provider offers more than 110 years of experience, 24/7 claims reporting, and strong ratings from AM Best and BBB. Discounts are also available for going paperless, paying online, successfully completing their RightTrack driver safety program, and more.
Young adults can be high-risk drivers. With its accident forgiveness program, Liberty Mutual keeps your premium the same after an accident. To qualify, drivers under age 25 must have five consecutive years of incident-free driving to have their first accident forgiven.
| Pros: | Cons: |
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Customizable coverage and discounts
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Stringent accident forgiveness requirements
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Drivers under 25 may be eligible for accident forgiveness
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Only covers first accident
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Highly experienced, well-rated national insurer
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Below average customer satisfaction ratings for digital experiences from J.D. Power
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What Factors Influence Car Insurance Rates for Young Adults?
Several factors can influence young adults’ car insurance rates depending on the state in which they're insured. Not all rating factors, such as credit score, are allowed in all locations. Common factors that can influence car insurance rates are:
- Driver age: Drivers younger than 25 typically have higher premiums.
- Vehicle type and age: Valuable or unsafe cars are usually more expensive to insure.
- Credit score: Good credit may lead to more affordable coverage. However, this rating factor is not allowed in all states.
- Driver gender: Females are statistically lower-risk customers than males, so they may pay less for coverage.
- Location: High crime and traffic rates can mean a higher risk of claims, so urban drivers might pay more for coverage.
- Annual mileage: More driving means more chance of accidents and, thus, higher rates.
- Desired coverage: The more coverage you need, the higher your premiums will be.
A local independent insurance agent can help you find affordable car insurance for young adults in your area.
Average Cost of Car Insurance for Young Adults
The average cost of car insurance for young adults is $5,374 per year for a full coverage policy for a 20-year-old driver. However, 25-year-old drivers pay just $3,251 per year for full coverage, which is a significant difference after just five years.
Of course, the cost of your specific policy can vary based on the factors outlined above. Be sure to work with an independent insurance agent to shop and compare quotes.
Life Events Can Affect Car Insurance Rates for Young Adults
Major life changes can also influence your car insurance premiums. Your auto insurance costs reflect aspects like your financial stability, who’s driving your car, and your overall risk level. The following life events could affect your costs:
- Getting married: Married people are generally seen as lower risk, and couples typically move their vehicles to one policy for simplicity. Both may help reduce your premiums.
- Moving in with roommates: Roommates may borrow your car occasionally. Because of this, insurers will typically ask for your roommates to be listed on the policy, resulting in a cost increase. Your roommates may also be excluded from your policy; in which case, your insurance provider may require proof that they have their own insurance.
- Buying your first home: Homeowners are generally seen as financially responsible, which often translates to lower premiums. If you bundle your homeowners insurance and car insurance, you may also get a bundling discount.
If you go through any major life changes, be sure to update your independent insurance agent. They can help update your policy for you and find any new discounts you may qualify for to reduce your premiums.
Car Insurance Discounts for Young Adults
As you age, you'll eventually become ineligible for your parents’ car insurance policy or for discounts, such as if you are a student driver. However, you may become eligible for other discounts, including:
- Multi-car discounts: Insuring more than one vehicle may get you a discount.
- Multi-policy discounts: Bundling insurance policies through one provider typically earns discounts.
- Alumni association discounts: Recent college graduates often get discounts.
- Good student discounts: Many insurers offer discounts for college students with good grades.
- Usage-based discounts: Low annual mileage rates could earn you discounts.
You may also score discounts for enrolling in autopay, paperless billing, or programs that monitor your safe driving habits. Ask your independent insurance agents about all the additional car insurance discounts that may be available to you.
FAQs About Car Insurance for Young Adults
Which car insurance is cheapest for young adults?
Variables like location, eligibility for discounts, and driving history can cause cost differences between individuals, even if their coverage is identical. However, USAA generally offers the most affordable premiums for young adults. USAA's auto insurance is only available to military members and their families, though.
How much car insurance do young adults need?
You should always have the minimum liability coverage and other types of coverage required by your state. However, accidents are expensive. Young drivers’ increased driving risks and probable inability to cover high out-of-pocket costs mean that they could benefit from more robust coverage with higher limits.
Is car insurance cheaper once you are 25 years old?
Once you turn 25, your perceived risk begins to decrease, and your premiums are likely to also. However, changes like being taken off your parents’ policy or aging out of good student discounts could mean increases in your rates.
How can I lower my car insurance rates in my 20s?
Start by finding a provider that offers customizable coverage and discounts that you’re eligible for. Maintaining a safe driving record, taking safe driving courses, and reducing the number of miles you drive could also help lower your rates.
Should I stay on my parent's insurance policy in my 20s?
If you still live with your parents, you may enjoy lower costs on their policy. However, if you move into your own place, it’s often best to get your own coverage.
What gender pays more for car insurance?
Males may have higher premiums because they’re statistically more likely to get into accidents. It’s also more likely for those accidents to be more serious and incur higher costs.
Sources
https://www.bankrate.com/insurance/car/young-drivers/#best-car-insurance-for-young-drivers
https://www.thezebra.com/auto-insurance/driver/age/cheap-car-insurance-young-adults/
