A Guide to Affordable Car Insurance for new Drivers
New drivers usually end up spending more for insurance because their lack of experience makes them more prone to getting into accidents on the road. So, buying affordable auto insurance for new drivers can be a bit of a challenge.
Even though being a new driver comes with higher costs, there are ways for young and inexperienced drivers to cut down on insurance expenses.
FrugalInsurance is here to share tips for new drivers seeking more affordable coverage. We’ll also break down the various factors that can raise those insurance rates.
Just got your driver’s license and on the hunt for wallet-friendly coverage? You’re in luck! Our article will teach you how to get cheap car insurance for new drivers.
Who is a new driver?
When we talk about new drivers, teenagers often top the list. Though they make up a significant portion of inexperienced drivers, there are other demographics that also fall into this category. Newly licensed drivers, individuals with gaps or lapses in their auto insurance history, new immigrants, and foreign drivers all fall into the category of those considered new and inexperienced drivers.
Since these groups typically lack substantial driving history, insurance companies tend to perceive them as riskier to insure, leading to higher coverage costs for them. Keep reading our article as we give you more details on cheap car insurance for young drivers.
What is the cost of car insurance for new drivers?
Here are the car insurance costs for new drivers based on age and driving experience, as gathered from various price comparison and insurer websites that FrugalInsurance.com explored:
Affordable auto insurance for new drivers: rates by age
| Age | Minimum coverage | Full coverage |
|---|---|---|
| 16 | $3,108 | $7,452 |
| 17 | $3,096 | $7,224 |
| 18 | $3,024 | $7,080 |
| 21 | $1,752 | $4,356 |
| 25 | $1,200 | $2,988 |
| 35 | $1,020 | $2,580 |
| 45 | $1,008 | $2,496 |
| 55 | $948 | $2,316 |
You might’ve noticed that car insurance is expensive for people aged 16 to 18. Insurers label this age group as the riskiest to insure.
The good news is that rates usually take a dip as you enter adulthood. Once you hit 25, you can anticipate a significant drop in premiums. However, they might increase a bit again as you enter the senior age bracket.
It’s worth noting that 16- and 17-year-olds are minors and can’t legally enter into contracts like car insurance. Normally, they are included in their parents’ policies as soon as they get their driver’s licenses.
Unless their cars are officially registered under their names (since parents can’t insure a vehicle not in their name) or they’ve managed to pull off emancipation, 16- and 17-year-olds usually ride on their parents’ policies.
Affordable car insurance coverage for new drivers: A breakdown of premiums based on driving experience:
AVERAGE ANNUAL COST OF CAR INSURANCE FOR NEW DRIVERS (YEARS OF DRIVING EXPERIENCE)
| Year licensed | Minimum coverage | Full coverage |
|---|---|---|
| 0 | $1,104 | $2,745 |
| 1 | $888 | $2,552 |
| 2 | $852 | $2,365 |
| 3 | $840 | $2,267 |
| 4 | $828 | $2,215 |
| 5 | $768 | $1,920 |
Breaking it down, full coverage premiums are over twice the cost of minimum coverage, no matter the driving experience. Interestingly, drivers with less than a year under their belts pay roughly 40% more for basic coverage than their five-year-experienced counterparts.
Given the high rates of auto insurance for new drivers, the temptation to opt for minimal coverage is real. Yet, industry experts advise going for full coverage if you can swing it, especially since the risk of accidents is higher in the early days of driving.
How to find cheap car insurance for new drivers
New drivers inevitably face higher premiums due to the associated risks, but fear not—there are ways to trim those costs. Check out these simple and practical tips for scoring affordable car insurance for new drivers:
1. Shop around and compare quotes
Since car insurance premiums hinge on personal factors, pinpointing the policies that save you the most can be tricky. The fastest route to uncovering the best deal? Shop around and compare car insurance quotes—efficiency at its finest.
When you compare quotes, you’re not just looking at premiums but also weighing the features and benefits each auto policy brings to the table. It’s your ticket to finding the policy that perfectly aligns with your needs at the most reasonable price.
2. Continue with your parents’ policy
Opting for a family plan is way more budget-friendly than getting personal auto insurance. Stick with your parents’ policy, and you could cut your premiums by a cool 60%, depending on how old you are.
But here’s the catch: you can only pull off this move if you’re under 25 and still living in your parents’ house. If the car is registered in your name, no shortcuts—you’ve got to buy your own auto insurance policy.
3. Be careful with your choice of car
Your choice of car is a big deal in the insurance game. The insurance companies consider your car’s value, make, model, and age to determine your premium. If you drive a car that has expensive or theft-prone parts, brace yourself for higher auto premiums. Choose your set of wheels wisely; it’s a premium game changer.
4. Choose a higher deductible
Here’s an easy trick for new drivers looking to get cheap auto insurance: increase your deductible. This means that your auto insurer takes on less risk, get cheap premiums.
But make sure your insurance deductible is within reach, because that’s the amount you’ve got to pay from your own pocket before your insurer kicks in. Find the sweet spot for your wallet.
5. Take advantage of discounts
New drivers, listen up! Car insurers have several ways to reduce your premiums. They hand out discounts based on how you drive (your driving habits), your school performance, group affiliations, and even the type of car you drive. Grab those money-saving perks!
Here’s a top tip for new drivers chasing affordable insurance: get those multi-vehicle discounts, especially if you’re still under your parents’ roof. It’s a way of saving on your car insurance.
Here is a list of popular auto insurance discount options available to young and inexperienced drivers:
- Good Student Discounts: Get rewarded for reading your books and getting good grades.
- Multi-Vehicle Discounts: Save big by bundling with family rides.
- Safe Driver Discounts: Prove you’re a smooth operator on the road.
- Defensive Driving Course Discounts: Learn the ropes and watch your premiums drop.
- Anti-Theft Device Discounts: Keep your wheels safe and your wallet happier.
- Low Mileage Discounts: Drive less, pay less – it’s that simple.
- Affiliation Discounts: Being part of certain groups can score you some savings.
- Usage-Based Discounts: Let your driving habits do the talking.
- Bundling Discounts: Combine your policies and watch the costs shrink.
6. Drop unwanted coverages
Car insurance companies give you different coverage choices for maximum protection, but keep in mind that some of these extra policies might come with additional charges.
When getting car insurance, it’s smart to think about exactly what types you truly need. This ensures won’t pay for coverage you could easily go without.
For instance, if you’re sure about your driving skills and see yourself as a safe driver, you might want to pass on the accident forgiveness feature in your policy if it increases your premiums.
7. Limit your mileage
The longer you’re on the road, the more likely you are to encounter accidents, and this can push up your car insurance costs.
To keep your rates in check, consider using your vehicle only when essential, if possible. Opting for pay-per-mile insurance can also be a money-saver, as you’ll only pay for the time you’re actually driving.
8. Think about usage-based insurance
Usage-based insurance, or UBI, is like having your insurance company use fancy gadgets or a cool app (also known as telematics) to keep an eye on how you drive. Then, based on that info, they give you a reward (in the form of discounted premiums) for being a safe driver.
9. Pay your premiums annually
When you pay all your premiums in one go, you will avoid paying the interest that comes with monthly payments. Plus, since it lowers the chance of missing payments, insurance companies often reward individuals who pay annually with some nice discounts.
10. Drive carefully
Keeping your driving record squeaky clean is a great strategy for getting affordable car insurance as a new driver. It tells your insurer you drive responsibly, not as a risk-taker, which usually translates to lower premiums.
If you manage to go a long while without filing a claim, your insurance company might reward you with a discount. Keeping your record clean could reduce your yearly premiums by about 10% to 25%.
The Impact of Driving Experience on car Insurance Rates
Your age, driving experience, and even gender play a big role in shaping your car insurance costs. Typically, the younger and less experienced you are, the higher the chance of an accident, and the stats support this.
The risk is highest for drivers aged 16 to 19, who are almost three times more likely to have fatal accidents per mile compared to other age groups. It’s surprising, considering teens make up just 4% of all US drivers, as per the latest fatality facts report from the Insurance Institute for Highway Safety (IIHS).
The institute’s data highlights that over two-thirds (68%) of the teen crash fatality rate is attributed to male drivers.
Once you hit the big 25, keep an eye out for a drop in your car insurance premium. It’s a trend that usually continues as you age, especially if your driving record stays clean and your auto insurance score remains solid.
Enjoy the downhill trend in your premiums until you hit senior age, when they might start increasing again. It’s less about your driving habits and more due to age-related factors that come into play.
For affordable rates, no matter your driving experience, you can buy cheap car insurance online. It’s a straightforward move that often saves you some cash.
Is cheap car insurance for new drivers worth it?
Opting for the cheapest premiums might be tempting for young and inexperienced drivers due to the high costs, but it could be a risky move. It may end up costing you more in the long-run especially if the coverage falls short of covering the full cost of an accident.
For the best car insurance coverage, don’t just focus on the price tag; take a deeper look to ensure the policy gives you the protection you really need.
Car insurance is one of the biggest expenses that comes with owning and operating a vehicle. But there are ways to lower your premiums. This guide to cheap car insurance gives you simple and practical tips on how to cut insurance rates.
Owning a vehicle can be expensive, and car insurance is a big chunk of that expense. Check out this guide on cheap car insurance for new drivers for practical tips on slashing those premiums.
