Best Cheap Car Insurance for 21-Year-Old Drivers (2023)

How much is car insurance for a 21-year-old?

On average, 21-year-olds pay just under $100 per month for liability-only coverage, Insurify data shows. But their monthly rates can reach as high as $422. Full coverage is even pricier, with average premiums ranging from $162 to $495.

Find Affordable Car Insurance for 21-Year-Olds

Enter your ZIP codeGet My Quotes

Secure. Free. Easy-to-use.

Based on 3,806+ reviews

4.8/5

Factors that affect car insurance rates for 21-year-olds

“Youthful drivers cost more on their insurance policy due to driving record history as a demographic. Even with a clean driving record, younger drivers historically have more accidents due to lack of driving experience,” says Dom Frey, a licensed insurance agent in Ohio with Hitchings Insurance Agency.

Insurers also consider the following factors when determining your car insurance rates:^[2]

• Driving record: Insurance companies see your driving record as an indicator of how likely you’ll have a future incident. A history of accidents, traffic violations, or DUIs can result in higher insurance rates.

• Credit score: Drivers who keep their credit scores up are more likely to be responsible behind the wheel. Insurers use credit scores to set rates about 95% of the time.

• Gender and marital status: Younger drivers — particularly male drivers — have more accidents, leading to higher premiums.

• Vehicle type and how you use it: The make and model of your vehicle, as well as how often and how far you drive, affect your rates.

• Location: Where you live and park your car plays a role. Drivers in urban areas may see higher rates because accidents and auto thefts are more frequent than in rural areas.

• Insurance history: If you don’t have auto insurance when you apply for coverage, most insurers will charge you more. You might also face higher premiums if you carry only state-minimum coverage.

• Liability limits: Your choice of coverage affects your cost. Higher policy limits come with better financial protection, but you’ll pay higher rates.

• Policy deductible: Going with a higher deductible can get you lower premiums since you agree to pay more out of your pocket when you file a claim.

Cheapest car insurance companies for 21-year-old drivers

The insurance company you choose can influence the car insurance rates you’ll pay, so it’s important to compare car insurance rates. Plymouth Rock Assurance offers the most affordable liability-only policy, for $94, while Allstate charges 112% more for liability coverage, according to Insurify data.

You’ll notice a similar trend for full-coverage policies — Kemper Preferred has the cheapest full-coverage policy for 21-year-olds, at $148, and National General’s rate of $363 is 145% higher.

Plymouth Rock Assurance

Plymouth Rock Assurance is a solid option for drivers in the northeastern United States. Annual policies are available, and paying in full can net you a 4% discount.

Other discounts you might be eligible for include:

• Safe driver discount

• Anti-theft device discount

• eDocuments discount

You’ll find optional coverages to customize your policy, such as accident forgiveness, full glass coverage, new-car replacement, loan/lease gap coverage, towing and labor, and roadside assistance.

Kemper Preferred

Kemper is a great company if you’ve had trouble getting insurance coverage in the past. It has different coverage options to fit your policy to your needs and budget. Check out Kemper Preferred for even more options if you have a clean driving history.

To help you save money, look for these discounts:

• Good student discount

• Military discount

• Advanced quote discount

• Proof of prior insurance discount

• Paid-in-full discount

• Defensive driving course discount

If you don’t have a license or need SR-22 insurance, Kemper can help. You can add roadside assistance or choose an annual policy to lock in your rate for the entire year.

Auto-Owners

Auto-Owners Insurance is another good option for 21-year-olds who value personal relationships with insurance agents. Its independent agents give you a point of contact to take care of your insurance business.

Discounts to consider for 21-year-olds include:

• Good student discount

• Student away at school discount

• Safety features discount

• On-time payments discount

• Paid-in-full discount

• Advanced quote discount

• Paperless billing discount

Auto-Owners has a wide range of coverages available in six-month terms. Besides the basic coverages you’d expect, you can get rental car coverages, gap insurance, accident forgiveness, and deductible waiver.

Erie

Erie might be your best bet if customer satisfaction is important to you. It’s one of the top choices in customer satisfaction in the 2022 J.D. Power U.S. Auto Insurance Study, with 893 out of 1,000 points. Paying in full for the year can qualify you for a discount.

Other discounts you might benefit from include:

• College student discount

• Vehicle storage discount (if you go away to college)

• Rate lock discount

• Accident forgiveness discount

• Diminishing deductible discount

• Safety features discount

Erie policies can cover your travel expenses if your car becomes disabled, as well as pets if they’re injured while you’re traveling. You can also get accident forgiveness after you’ve been claims-free for three years.

USAA

USAA is a popular car insurance company for military members and their families. The company has a strong reputation for customer service. It ranks in one of the top spots in the industry, according to the J.D. Power 2022 U.S. Auto Insurance Study.

If you get a quote from USAA, ask about discounts that can lower your premiums, such as:

• Good student discount

• Clean driving record discount

• Military base or installation discount

• Anti-theft devices discount

USAA’s coverage can help protect you and others on the road with liability, comprehensive, and collision options. You also have the option to customize your policy with roadside assistance and rental reimbursement.

Average car insurance rates by age and gender

Car insurance costs vary considerably by age and gender, with males paying more than females on average.

“The reason male drivers might pay more is because statistically they are involved in more accidents, especially under the age of 25,” says Ashley Jantovsky, licensed insurance agent for Perfect Price Insurance Agency in Livonia, Michigan.

Men tend to engage in riskier driving behaviors than women, including driving under the influence, driving without a seatbelt, and speeding, according to the Insurance Institute for Highway Safety (IIHS). From 1975 to 2020, men had a 136% higher chance of being involved in a fatal crash on average, according to IIHS data on motor vehicle crashes.^[3]

The table below illustrates that male drivers pay higher monthly liability-only and full-coverage automobile insurance rates.

Find Affordable Car Insurance for 21-Year-Olds

Enter your ZIP codeGet My Quotes

Secure. Free. Easy-to-use.

Based on 3,806+ reviews

4.8/5

Average car insurance rates by state for 21-year-olds

“Each state is governed by its own set of insurance laws. As a result, insurance coverage is different, and experiences with claims are different, so the overall rates end up being different, too,” says Jantovsky.

You’ll also find cost differences between urban, suburban, and rural areas. Urban and suburban areas tend to have higher rates due to increased traffic, more vehicles on the road, and higher crime rates.

The table below shows a significant variation in monthly state car insurance premiums for 21-year-olds. For instance, 21-year-old drivers in North Carolina pay the lowest car insurance premiums, while New York’s average rates are up to 900% higher.

Cheapest states for car insurance for 21-year-olds

Your state’s minimum liability insurance requirements and whether you live in a no-fault or at-fault state can significantly affect your car insurance costs. States with higher liability minimums tend to have higher insurance premiums.^[4] Additionally, insurers in no-fault states take on more risk because they cover medical expenses and lost wages regardless of fault.

Some states allow insurers to use credit as a rating factor, which means your credit score can affect your insurance premiums.^[5] Below are the cheapest states for car insurance for 21-year-olds. Young drivers in North Carolina pay nearly 58% less for a monthly liability-only policy than drivers in Iowa.

Most expensive states for car insurance for 21-year-olds

Teen drivers and drivers younger than 25 are statistically more likely to be in accidents, especially males.^[6] Insurers charge higher premiums to offset the higher risk. However, different states can also have different rates because of weather-related hazards.

States with a higher likelihood of hailstorms, hurricanes, or tornadoes need to account for the potential damage to vehicles, resulting in higher insurance rates. 

Insurance is most expensive in the following five states for 21-year-olds:

Best auto insurance discounts for 21-year-olds

Auto insurance discounts allow policyholders to reduce their premiums. They’re like rewards for meeting specific criteria, such as being a safe driver or having a low-risk vehicle. Some discounts are specifically for young drivers, such as:

• Good student discount: This discount is for students who maintain a certain grade point average or higher.

• Away-at-school discount: If you attend college or live away from home for an extended period, you may be eligible for this discount.

• Bundling discount: If you own or rent your own place, or if you’re on your parent’s policy and they own a home, ask about bundling your policies to save on your car insurance.

• Safe driver discount: This discount is best if you have a clean driving record with no accidents or violations.

• Multi-car discount: If you and your family have more than one car, you can save money on your insurance by getting a multi-car discount.

• Pay-in-full discount: Some insurers offer savings if you pay your premium in full rather than making monthly payments.

• Defensive driving course discount: Completing a certified defensive driving course can qualify you for a discount with some insurers.

• Telematics: These programs offer young drivers an opportunity to save on car insurance premiums by monitoring their driving behavior through an app or device.

  

How to get cheap car insurance for a 21-year-old

Generally, you’ll pay more for car insurance when you’re 21 than your older peers, but several options are available to reduce your overall costs.

Comparison shop

To ensure you’re getting the best deal on car insurance, shopping around to compare quotes from multiple insurers is essential. Different insurers will offer different rates based on various factors, such as the type of car you drive, your driving history, and where you live. By comparing quotes, you can find the best price for the coverage you’re looking for.

Choose the right car model

The type of car you drive can have a big effect on your insurance rates. Generally, newer or more expensive vehicles will be more expensive to insure. If you’re looking to save money on car insurance, consider choosing a car that’s less expensive or has a good safety rating. Vehicles with a high safety rating and lower cost of repairs can help you lower your rates.

Opt for a high deductible

A higher deductible can help you save money on your car insurance premiums. A deductible is the amount you pay out of pocket before your insurance kicks in to cover the rest of the costs.

By selecting a higher deductible, you’ll be responsible for paying more out of pocket if you get into an accident, but you’ll also pay lower premiums each month.

Maintain a clean driving record

A clean driving record is one of the best ways to keep your car insurance rates low. Avoiding accidents, traffic violations, and DUIs can help keep your insurance costs down.

If you get into an accident or receive a violation, your insurance rates will likely go up, so driving safely and responsibly is important.

Keep a good credit score

Your credit score can also affect your car insurance rates. Depending on your state, insurers may use your credit score as a factor when setting your premiums. To maintain a good credit score, it helps to pay your bills on time and keep your credit utilization low.

Go (or stay) on a parent’s policy

“If a 21-year-old lives at home, they can stay on their parent’s policy, and I’d recommend that,” says Frey. “They likely receive a multi-car discount and auto-home discount — two large discounts they likely miss if they are on their own policy. Now, if they do not live at home and are not a full-time student, then most carriers will require them to be on their own policy.”

However, there’s a catch. “Parents should be forewarned that having their name on their child’s vehicle title opens them up to liability, and, in the event that a young driver has a claim, it can have an adverse effect on their overall household insurance premiums going forward,” Jantovsky says.

Find Affordable Car Insurance for 21-Year-Olds

Enter your ZIP codeGet My Quotes

Secure. Free. Easy-to-use.

Based on 3,806+ reviews

4.8/5