Becoming a licensed driver can seem overwhelming. Buying a car and getting it insured is a lot of responsibility. If you’re over 18, a licensed driver and have the funds available to purchase a vehicle (and insurance coverage), you’re definitely free and clear to do so. But if you’re a younger teen, just having a license and the cash isn’t enough. In most states, minors aren’t allowed to own property on their own, and you must recruit a parent (or other trusted adult) to co-sign your purchase. When in doubt, consult your state’s DMV.
Adding a young driver to a family car insurance policy is cheaper than purchasing insurance on your own: you will likely pay 20% more than the increase to your family’s premiums would be by having your own separate plan.
The good news is that if you do need to strike out on your own and pay out for your own insurance policy, the difference in premiums will become lower year by year as you grow into an older and more experienced driver.
We teamed up with QuinStreet to bring you the following car insurance offers. Below, you'll find our picks for the best options for teen and young-adult drivers:
Best Car Insurance for Teens & Young Adults of 2020
- Erie Insurance: Best Overall
- American Family Insurance: Runner-Up, Best Overall
- State Farm Insurance: Best Good Student Discount
- Geico Insurance: Best Direct Insurance Company
- Nationwide Insurance: Best Policy Perks
- Progressive Insurance: Best for a Student Driver on Their Own
- Allstate: Best When Away At College
- USAA: Best Insurance for Newly Enlisted Military
Best Overall: Erie Insurance
If you live in Illinois, Indiana, Maryland, New York, North Carolina, Ohio, Pennsylvania, Tennessee, Virginia, West Virginia, or Wisconsin, you should definitely call an Erie agent. It is easily one of the most affordable companies for teen and college-aged drivers. They offer discounts of up to 20% for drivers who live at home and are under 21, for each year they spend under the same policy, for taking a driving class, and even for participating in their competitive program that offers prizes to students who are the most engaged with safe driving. Neat, huh?
Erie Insurance is well-known for its competitive price and excellent claims service. They are rated A+ by A.M. Best, which is considered an Excellent rating. A.M. Best ratings are in relation to the financial stability of the carrier and the likelihood of your claim getting paid.
Runner-Up, Best Overall: American Family Insurance
This reputable company has a free Teen Safe Driver program that can provide up to 10% discounts off of premiums after the driver completes either 3,000 driving hours or one year using the app, which tracks driving behavior and provides feedback. If you share a vehicle with your teen driver, don’t worry—you can remove trips from the log if someone else was the driver.
Consider driving a slightly older vehicle. Premiums are often lower for older vehicles—and certainly are lower than they are on the latest model of sports car. But given that the crash rate for teen drivers is almost twice that of other adult drivers, don’t skimp on safety: really old cars can sometimes lack the safety features that are essential to protect new drivers on the road in the event of an accident. At the minimum, make sure the vehicle has working airbags and a recent safety inspection from a reputable mechanic.
Best Good Student Discount: State Farm Insurance
State Farm comes with competitive premiums and is a great option for those who live outside of major metro areas and states not covered by smaller insurance carriers. They also have a sweet discount of 25% for good grades until the age of 25 and are known for their awesome customer service.
State Farm is the largest insurance company in the U.S. since they insure more cars and homes than any other carrier. In some states, State Farm offers a Steer Clear and Drive Safe & Save programs that offer discounts based on driving habits while helping young drivers learn to drive safely. Check with an agent in your area to see if these options are available.
Best Direct Insurance Company: Geico Insurance
Geico is also available in 50 states and even gives a discount for using your seatbelts, as well as for ensuring your vehicle has safety features such as anti-lock brakes, airbags and anti-theft protection. They also offer a Family Pricing Program that gives a lower rate to teens who stay on their parent’s insurance policies and later switch to their own Geico plan. If you drive between home and college often, you might want to spring for the company’s mechanical breakdown coverage, which covers the cost of repairs you need because of normal wear and tear rather than just serious accidents.
Geico is bought and sold directly online, which means you will not be going into an agent's office. Direct insurance is not new and is continuously growing in popularity. You can speak with a licensed agent with a simple phone call. Some look at it as skipping the middleman with a little extra savings in your pocket. It does help to have some familiarity with car insurance before buying it online.
Best Policy Perks: Nationwide Insurance
Like the others on this list, Nationwide offers a good student discount. But it also offers accident forgiveness even for teen drivers, ensuring rates won’t increase even more after the first at-fault accident. They also offer 24/7 roadside assistance. If you’re willing to have your driving monitored at all times, their SmartRide program can qualify you for some steep discounts after a year of use. You can also combine discounts on a family plan, so if your parents qualify for a discount for being accident-free, you will, too.
Take driver’s ed, even if it’s not mandatory—and even if it doesn’t lower your premiums. It will still reduce your chances of causing a costly and premium-raising accident, so it will very likely save you money and pain in the long run.
Best for a Student Driver on Their Own: Progressive Insurance
With Progressive’s multi-car discount, you can offset the cost of insuring a teen or young person by getting a lower rate for covering many vehicles under the same policy. But, that is not always an option. If you are buying a policy on your own as a young driver, Progressive will take care of you.
Progressive's website is rated as one of the best overall. Comparison shopping is made easy with their comparison tool. Remember, it’s always a good idea to shop around for insurance, ask about discounts, and never take the first offer. Whatever policy you eventually choose, just remember that you won’t be paying high-prices forever!
Best When Away At College: Allstate
Unmarried students under the age of 25 can get major savings if they are enrolled full-time and getting good grades, attend school at least 100 miles away from home (and their car) or complete a teenSmart driver’s ed program.
Allstate provides local agents to walk you through the insurance process. Always ask about discounts. Safe driver discounts, good grade discounts, discounts for installing a safe driving app…the list is limitless, and it always pays to talk to your insurance agent.
If you’re going off to school but your car won’t be coming along for the journey, you should ask your family insurance agent about a lower premium. If you’re not driving the vehicle year-round, then there’s no reason you should have to pay top dollar for year-round coverage. But definitely don’t just cancel your policy—you want to make sure that if your vehicle is stolen or damaged by an act of nature (or vandals) that you are covered.
Best Insurance for Newly Enlisted Military: USAA
If you join the military right after high school or college graduation and need car insurance, you’re in luck, because USAA offers great policies that are only available to military members, veterans and their families. They often have the best customer service and price ratings in the industry.
Expect to find coverage for all of your insurance needs. Car insurance, motorcycle, boat, renters and even homeowners insurance are all available. USAA does not provide local agents but you will be able to reach a representative 24 hours per day, seven days a week.
USAA understands military life. They know moving often is part of the deal. They know your home state might be different than the state you currently reside. So look no further than USAA.