Best Cheapest insurance companies for young drivers & Age Affects

Best Cheapest insurance companies for young drivers & Age Affects

Younger drivers pay significantly more for car insurance than older drivers, but rates also rise after the age of 60.

When calculating a car insurance quote, one of the primary factors insurance companies consider is age. A driver’s age is used by auto insurance companies to assess their driving experience and accident risk.

Car insurance rates by age

According to a ValuePenguin analysis, the youngest and oldest drivers pay significantly more than the middle-aged drivers. Rates drop dramatically between the ages of 16 and 25, then begin to rise again after the age of 60.

Here are the average car insurance costs by age:

Cheapest insurance companies for young drivers & Age Affects
Cheapest insurance companies for young drivers & Age Affects

Find Low-Cost Auto Insurance in Your Area

Quotes for teenagers are three times the cost of quotes for drivers in their mid-30s and nearly four times the cost of quotes for drivers in their mid-50s. When young drivers reach the age of 25, their car insurance costs drop by approximately 33%.

With each birthday, costs generally decrease. Drivers will see their best rates when they reach the age of 50. However, around the age of 60, auto insurance costs begin to rise and compare to what drivers see in their 40s.

Insurance companies with the lowest rates for young drivers

Choosing the right insurance company as a young driver can result in significant savings. The annual difference between companies can be more than $10,000.

Because the best insurer changes each year, we recommend getting multiple quotes whenever your policy is up for renewal.

The most affordable car insurance for 16-year-olds

Farm Bureau has the lowest rates for 16-year-old drivers, with an average annual premium of $3,003. That’s less than Erie ($3,111) and USAA ($3,935).

Although Erie is only available in 12 states, it also provides numerous discounts to young drivers. Farm Bureau offers a young driver safety program, but coverage options vary depending on where you live.

The most affordable car insurance for 17-year-olds

In addition, Farm Bureau has the lowest rates for 17-year-old drivers, followed by Erie, USAA, and State Farm. Farm Bureau’s annual rate of $2,660 is less than half the national average, saving you more than $3,000 per year.

The most affordable car insurance for 18-year-olds

Farm Bureau, Erie, and USAA have the most affordable rates for 18-year-old drivers. These three companies have average rates that are 47% lower than the national average for drivers of that age.

The majority of drivers do not have access to SAA or Erie, and Farm Bureau’s options vary depending on where you live. If you want the security of a national insurer, Travelers has a lower-than-average annual rate of $3,219, with accident forgiveness options and several discounts for young drivers.

How does gender influence car insurance rates?

Gender also has an impact on car insurance costs. Men will pay approximately 9% more than women over their lifetime, though the price difference varies by age.

Men, for example, pay an average of 13% more than women until the age of 21. This disparity narrows after the age of 30, when a female driver’s rates are less than $20 per year lower until her mid-60s.

Why do young and old drivers pay different rates for car insurance?

Teenagers pay more because statistics show that they are inexperienced, making them more likely to be involved in car accidents than other age groups.

The Insurance Institute for Highway Safety states:

  • Drivers aged 16 to 19 are four times more likely than older drivers to be involved in a car accident.
  • Drivers between the ages of 15 and 20 accounted for 7% of all fatal accidents in 2019.

As a result, because your insurer believes you’re more likely to crash when you’re young, your rates will be higher. Experienced drivers in their mid-30s to late-50s typically have better driving skills and road maturity, resulting in lower accident rates.

However, once drivers reach their 60s, the trend begins to reverse as age and slower reflexes begin to impact driving. Seniors are typically charged the highest rates by insurers once they reach the age of 70. An 80-year-old driver pays slightly more than a 25-year-old.

How to Save Money on Car Insurance Whether You’re Young or Old

Shopping around, applying for discounts, and joining someone else’s policy are the most effective ways for young and elderly drivers to save money on auto insurance.

shopping around

When it comes to insurance costs, shopping around is the most effective way to save money.

We recommend getting quotes from at least three different companies. Most large insurers allow you to start a quote online, making price comparison easier.

Discounts

Discounts are a simple way for younger and older drivers to save money on their insurance premiums.

Maintaining good grades (for young drivers still in school) and taking defensive-driving courses can reduce car insurance costs by up to 10%.

Companies like Allstate offer a “55 and Retired” discount, in which safe, retired drivers over the age of 55 automatically qualify for a 10% discount. Some companies also offer discounts to drivers over the age of 55 who complete defensive driving courses.

Adhering to your parents’ policy

We discovered that joining your parents’ auto policy costs about 62 percent less than starting your own as an 18-year-old driver.

Because your parents are bearing some of your risk as a young driver, insurance companies are more willing to offer a lower rate.

However, be aware that your parents’ rate will skyrocket. It’s a surefire way to get a lower rate if they’re still willing to add you.

Sources and methodology

We examined two sample drivers to determine the rates for each age group:

  • A man and a woman
  • Our test drivers drove a 2015 Toyota Camry.
  • Each of them drove 12,000 miles per year.
  • The drivers were covered by 50/11/25 liability insurance, as well as collision and comprehensive coverage.

ValuePenguin collected quotes from every ZIP code in Illinois, Pennsylvania, Texas, and Georgia.

Quadrant Information Services was used to collect rate data. Rates should only be used for comparison purposes, so your quotes will differ. Rates are obtained publicly from insurer filings.

The Insurance Institute for Highway Safety provided statistics on teen accidents.

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