Finding affordable car insurance as a new driver can be challenging. Insurance companies often charge higher premiums for new drivers due to their lack of experience, which statistically increases the likelihood of accidents.
However, there are ways to find cheaper car insurance even if you are new to driving. This comprehensive guide will walk you through the process of finding the most affordable car insurance, offer tips on reducing your premiums, and explore various insurance options available for new drivers.
What is Cheap Car Insurance?
Cheap car insurance typically refers to auto insurance policies that offer low premiums while still providing adequate coverage for drivers. However, it’s important to note that the term “cheap” can be subjective and may vary depending on factors such as the driver’s location, driving history, age, type of vehicle, coverage needs, and the insurance provider’s policies.
Cheapest Car Insurance for New Drivers
Below are some of the cheapest car insurance providers for new drivers:
Nationwide
Average Monthly Cost: $139
Average Annual Cost: $1,663
Nationwide is a well-established insurance company that offers a wide range of insurance products, including auto insurance. Founded in 1926, Nationwide has grown to become one of the largest insurance providers in the United States.
Coverage Options
- Liability Coverage: Nationwide offers liability coverage to protect drivers against bodily injury and property damage liability.
- Collision Coverage: Collision coverage is available to cover the cost of repairing or replacing your vehicle in the event of a collision.
- Comprehensive Coverage: Nationwide offers comprehensive coverage to protect against non-collision-related incidents, such as theft, vandalism, or natural disasters.
- Personal Injury Protection (PIP): PIP coverage is available to cover medical expenses and lost wages for you and your passengers, regardless of fault.
Discounts and Benefits
- Multi-Policy Discount: Nationwide offers discounts for bundling multiple insurance policies, such as auto and home insurance.
- Safe Driving Discount: Drivers with a clean driving record may qualify for discounts based on their safe driving habits.
- Accident Forgiveness: Nationwide offers accident forgiveness programs that prevent rate increases after the first at-fault accident.
Travelers
Average Monthly Cost: $141
Average Annual Cost: $1,694
Travelers is a leading insurance company with a long history of providing reliable coverage to drivers. Founded in 1853, Travelers has a strong reputation for excellent customer service and comprehensive insurance solutions.
Coverage Options
- Liability Coverage: Travelers offer liability coverage to protect drivers against bodily injury and property damage liability.
- Collision Coverage: Collision coverage is available to cover the cost of repairing or replacing your vehicle in the event of a collision.
- Comprehensive Coverage: Travelers offer comprehensive coverage to protect against non-collision-related incidents, such as theft, vandalism, or natural disasters.
- Uninsured/Underinsured Motorist Coverage: Travelers provide coverage to protect you in case you are involved in an accident with a driver who has insufficient insurance coverage.
Discounts and Benefits
- Safe Driver Discount: Travelers offers discounts for drivers with a clean driving record and no recent accidents or traffic violations.
- Multi-Policy Discount: Customers who bundle their auto insurance with other Travelers policies, such as homeowners or renters’ insurance, can qualify for additional savings.
- Driver Training Discount: Young drivers who complete an approved driver education or defensive driving course may be eligible for discounts on their premiums.
Erie Insurance
Average Monthly Cost: $150
Average Annual Cost: $1,796
Erie Insurance is a regional insurance company that operates in several states in the Mid-Atlantic and Midwest regions of the United States. Founded in 1925, Erie Insurance is known for its personalized service and competitive rates.
Coverage Options
- Liability Coverage: Erie Insurance offers liability coverage to protect drivers against bodily injury and property damage liability.
- Collision Coverage: Collision coverage is available to cover the cost of repairing or replacing your vehicle in the event of a collision.
- Comprehensive Coverage: Erie Insurance offers comprehensive coverage to protect against non-collision-related incidents, such as theft, vandalism, or natural disasters.
- Personal Injury Protection (PIP): PIP coverage is available to cover medical expenses and lost wages for you and your passengers, regardless of fault.
Discounts and Benefits
- Multi-Car Discount: Erie Insurance offers discounts for insuring multiple vehicles on the same policy.
- Safe Driver Discount: Drivers with a clean driving record and no recent accidents or traffic violations may qualify for discounts on their premiums.
- Young Driver Discount: Erie Insurance offers discounts for young drivers who complete an approved driver education or defensive driving course.
Geico
Average Monthly Cost: $151
Average Annual Cost: $1,807
Geico is one of the largest auto insurance companies in the United States, known for its catchy advertising campaigns and competitive rates. Founded in 1936, Geico has grown to become a household name in the insurance industry.
Coverage Options
- Liability Coverage: Geico offers liability coverage to protect drivers against bodily injury and property damage liability.
- Collision Coverage: Collision coverage is available to cover the cost of repairing or replacing your vehicle in the event of a collision.
- Comprehensive Coverage: Geico offers comprehensive coverage to protect against non-collision-related incidents, such as theft, vandalism, or natural disasters.
- Personal Injury Protection (PIP): PIP coverage is available to cover medical expenses and lost wages for you and your passengers, regardless of fault.
Discounts and Benefits
- Good Student Discount: Geico offers discounts for students who maintain a high GPA.
- Defensive Driving Discount: Drivers who complete an approved defensive driving course may be eligible for discounts on their premiums.
- Multi-Vehicle Discount: Customers who insure multiple vehicles with Geico can qualify for additional savings.
USAA
Average Monthly Cost: $152
Average Annual Cost: $1,825
USAA (United Services Automobile Association) is a financial services company that caters to military members and their families. Founded in 1922, USAA offers a wide range of insurance products, including auto insurance, to its members.
Coverage Options
- Liability Coverage: USAA offers liability coverage to protect drivers against bodily injury and property damage liability.
- Collision Coverage: Collision coverage is available to cover the cost of repairing or replacing your vehicle in the event of a collision.
- Comprehensive Coverage: USAA offers comprehensive coverage to protect against non-collision-related incidents, such as theft, vandalism, or natural disasters.
- Personal Injury Protection (PIP): PIP coverage is available to cover medical expenses and lost wages for you and your passengers, regardless of fault.
Discounts and Benefits
- Military Discount: USAA offers special discounts and benefits for military members and their families.
- Safe Driver Discount: Drivers with a clean driving record and no recent accidents or traffic violations may qualify for discounts on their premiums.
- Multi-Policy Discount: USAA offers discounts for bundling multiple insurance policies, such as auto and homeowners’ insurance.
State Farm
Average Monthly Cost: $163
Average Annual Cost: $1,952
State Farm is one of the largest insurance providers in the United States, offering a wide range of insurance products, including auto insurance. Founded in 1922, State Farm has a long history of providing reliable coverage and excellent customer service.
Coverage Options
- Liability Coverage: State Farm offers liability coverage to protect drivers against bodily injury and property damage liability.
- Collision Coverage: Collision coverage is available to cover the cost of repairing or replacing your vehicle in the event of a collision.
- Comprehensive Coverage: State Farm offers comprehensive coverage to protect against non-collision-related incidents, such as theft, vandalism, or natural disasters.
- Personal Injury Protection (PIP): PIP coverage is available to cover medical expenses and lost wages for you and your passengers, regardless of fault.
Discounts and Benefits
- Drive Safe & Save Program: State Farm offers discounts for safe driving habits through its Drive Safe & Save program. Customers who enroll in the program and demonstrate safe driving behaviors can save on their premiums.
- Steer Clear Program: State Farm offers discounts for young drivers who complete its Steer Clear program. This program includes educational modules and a driving log to help young drivers develop safe driving habits.
- Multi-Policy Discount: State Farm offers discounts for bundling multiple insurance policies, such as auto and homeowners’ insurance.
American Family
Average Monthly Cost: $169
Average Annual Cost: $2,023
American Family Insurance is a reputable insurance provider that offers various insurance products, including auto insurance. Founded in 1927, American Family has a strong presence in the Midwest and operates in 19 states across the United States.
Coverage Options
- Liability Coverage: The American Family offers liability coverage to protect drivers against bodily injury and property damage liability.
- Collision Coverage: Collision coverage is available to cover the cost of repairing or replacing your vehicle in the event of a collision.
- Comprehensive Coverage: American Family offers comprehensive coverage to protect against non-collision-related incidents, such as theft, vandalism, or natural disasters.
- Personal Injury Protection (PIP): PIP coverage is available to cover medical expenses and lost wages for you and your passengers, regardless of fault.
Discounts and Benefits
- Multi-Vehicle Discount: American Family offers discounts for insuring multiple vehicles on the same policy.
- Bundle Discount: Customers who bundle their auto insurance with other American Family insurance products, such as homeowners’ or renters’ insurance, can qualify for additional savings.
- Safe Driver Discount: American Family rewards safe driving habits with discounts for drivers with a clean driving record and no recent accidents or traffic violations.
Auto-Owners Insurance
Average Monthly Cost: $173
Average Annual Cost: $2,076
Auto-Owners Insurance is a mutual insurance company that has been providing coverage since 1916. Headquartered in Lansing, Michigan, Auto-Owners Insurance operates in 26 states and offers a variety of insurance products, including auto insurance.
Coverage Options
- Liability Coverage: Auto-Owners Insurance offers liability coverage to protect drivers against bodily injury and property damage liability.
- Collision Coverage: Collision coverage is available to cover the cost of repairing or replacing your vehicle in the event of a collision.
- Comprehensive Coverage: Auto-Owners Insurance offers comprehensive coverage to protect against non-collision-related incidents, such as theft, vandalism, or natural disasters.
- Personal Injury Protection (PIP): PIP coverage is available to cover medical expenses and lost wages for you and your passengers, regardless of fault.
Discounts and Benefits
- Multi-Policy Discount: Auto-Owners Insurance offers discounts for bundling multiple insurance policies, such as auto and homeowners’ insurance.
- Safety Features Discount: Customers who equip their vehicles with safety features, such as anti-lock brakes or airbags, may qualify for discounts on their premiums.
- Paid-in-Full Discount: Auto-Owners Insurance offers discounts for customers who pay their premiums in full upfront rather than in monthly installments.
Progressive
Average Monthly Cost: $187
Average Annual Cost: $2,243
Progressive is a leading insurance company known for its innovative approach to auto insurance. Founded in 1937, Progressive has grown to become one of the largest auto insurers in the United States, offering competitive rates and a wide range of coverage options.
Coverage Options
- Liability Coverage: Progressive offers liability coverage to protect drivers against bodily injury and property damage liability.
- Collision Coverage: Collision coverage is available to cover the cost of repairing or replacing your vehicle in the event of a collision.
- Comprehensive Coverage: Progressive offers comprehensive coverage to protect against non-collision-related incidents, such as theft, vandalism, or natural disasters.
- Personal Injury Protection (PIP): PIP coverage is available to cover medical expenses and lost wages for you and your passengers, regardless of fault.
Discounts and Benefits
- Snapshot Program: Progressive offers discounts for safe driving habits through its Snapshot program. Customers who enroll in the program and demonstrate safe driving behaviors can save on their premiums.
- Multi-Policy Discount: Progressive offers discounts for bundling multiple insurance policies, such as auto and homeowners’ insurance.
- Good Student Discount: Progressive offers discounts for students who maintain a high GPA.
Allstate
Average Monthly Cost: $247
Average Annual Cost: $2,958
Allstate is one of the largest insurance companies in the United States, offering a wide range of insurance products, including auto insurance. Founded in 1931, Allstate has a strong reputation for reliability and customer service, making it a popular choice for drivers across the country.
Coverage Options
- Liability Coverage: Allstate offers liability coverage to protect drivers against bodily injury and property damage liability.
- Collision Coverage: Collision coverage is available to cover the cost of repairing or replacing your vehicle in the event of a collision.
- Comprehensive Coverage: Allstate offers comprehensive coverage to protect against non-collision-related incidents, such as theft, vandalism, or natural disasters.
- Personal Injury Protection (PIP): PIP coverage is available to cover medical expenses and lost wages for you and your passengers, regardless of fault.
Discounts and Benefits
- Safe Driving Bonus: Allstate offers a Safe Driving Bonus for drivers who maintain a clean driving record. This bonus rewards safe driving habits with a discount on your premium for every six months of accident-free driving.
- Drivewise Program: Allstate’s Drivewise program monitors your driving habits through a mobile app or plug-in device, offering discounts for safe driving behaviors such as avoiding harsh braking and maintaining safe speeds.
- Multi-Policy Discount: Allstate offers discounts for bundling multiple insurance policies, such as auto and homeowners’ insurance. Bundling your policies can result in significant savings on your premiums.
Factors that Affect Car Insurance Rates
Age
Age is a significant factor in determining car insurance rates. Generally, younger drivers, particularly those under the age of 25, tend to pay higher premiums due to their lack of driving experience and higher likelihood of being involved in accidents.
Insurance companies consider younger drivers as higher risk because they may engage in riskier driving behaviors or lack the skills to handle various driving situations.
Gender
Historically, gender has been a factor in determining car insurance rates, with young male drivers typically paying higher premiums than young female drivers. This is because statistical data has shown that young male drivers are more likely to be involved in accidents and engage in risky driving behaviors compared to their female counterparts.
However, in recent years, some jurisdictions have prohibited the use of gender as a rating factor in setting insurance premiums, leading to more gender-neutral pricing in some regions.
Marital Status
Marital status can also impact car insurance rates. Married individuals tend to receive lower insurance premiums compared to single individuals. This is because married couples are perceived as more stable and responsible, leading to fewer accidents and lower claims rates.
Additionally, married couples may be eligible for multi-car or multi-policy discounts by bundling their insurance policies together, further reducing their premiums.
Location
Where you live plays a significant role in determining your car insurance rates. Urban areas with high population densities and increased traffic congestion tend to have higher insurance premiums compared to rural areas with fewer vehicles on the road.
Additionally, certain neighborhoods may have higher rates of vehicle theft, vandalism, or accidents, which can also impact insurance rates. Furthermore, areas prone to severe weather events, such as hurricanes or hailstorms, may have higher comprehensive coverage rates.
Vehicle Make, Model, and Mileage
The type of vehicle you drive, including its make, model, and mileage, can influence your car insurance rates. Generally, vehicles with higher horsepower, luxury features, or a higher value tend to have higher insurance premiums because they may be more expensive to repair or replace in the event of an accident.
Additionally, vehicles with a history of being stolen or involved in accidents may also have higher insurance rates. Conversely, vehicles with advanced safety features, such as anti-theft systems or collision avoidance technology, may qualify for discounts on insurance premiums.
Credit Score
In many jurisdictions, insurance companies use credit scores as a factor in determining car insurance rates. Studies have shown a correlation between credit scores and the likelihood of filing insurance claims.
Individuals with higher credit scores are perceived as more financially responsible and less likely to file claims, leading to lower insurance premiums. On the other hand, individuals with lower credit scores may be charged higher premiums as they are considered higher risk
Driving History
Your driving history, including your record of accidents, traffic violations, and claims, is one of the most significant factors in determining car insurance rates. Drivers with a clean driving record, meaning no accidents or traffic violations, typically receive lower insurance premiums as they are perceived as lower risk.
Conversely, drivers with a history of accidents or traffic violations may face higher premiums as they are considered higher risk. Insurance companies use this information to assess the likelihood of future claims and adjust premiums accordingly.
Coverage Limits
The amount of coverage you choose for your car insurance policy, known as coverage limits, directly impacts your insurance rates. Higher coverage limits, which provide more extensive protection in the event of an accident or loss, generally result in higher premiums.
Conversely, lower coverage limits, while offering less protection, typically result in lower premiums. It’s essential to carefully evaluate your coverage needs and financial situation to determine the appropriate coverage limits for your car insurance policy.
Tips to Find the Cheapest Car Insurance
Shop Around and Compare Quotes
One of the most effective ways to find affordable car insurance is to shop around and compare quotes from different insurers. Use online comparison tools to get multiple quotes quickly. This not only helps you find the best price but also allows you to compare the coverage options and customer service ratings.
- Online Comparison Tools: Websites like Insure.com, The Zebra, and NerdWallet offer tools to compare quotes from various insurers.
- Directly Contacting Insurers: Sometimes, directly contacting insurance companies can yield better deals or uncover exclusive offers.
Take Advantage of Discounts
Insurance companies offer various discounts that can significantly reduce your premium. As a new driver, you should explore all possible discounts to maximize your savings.
- Telematics and Usage-Based Discounts: Some insurers offer discounts if you install a telematics device in your car. These devices monitor your driving habits, such as speed, braking, and mileage, and provide discounts for safe driving behavior.
- Defensive Driving Course Discount: Completing a state-approved defensive driving course can demonstrate your commitment to safe driving and earn you a discount. These courses teach advanced driving techniques and safety practices.
- Multi-Policy Discount: Bundling your car insurance with other policies, such as renters or home insurance, can lower your rates. This is often referred to as a multi-line discount.
- Good Student Discount: If you’re a student with good grades (typically a B average or higher), you may qualify for a discount. This is based on the assumption that responsible students are also responsible drivers.
Choose a Higher Deductible
Opting for a higher deductible can lower your monthly premium. However, it’s essential to ensure you can afford the deductible amount in case you need to file a claim.
- Understanding Deductibles: The deductible is the amount you pay out of pocket before your insurance coverage kicks in. Higher deductibles mean lower monthly premiums but higher out-of-pocket costs in the event of a claim.
- Balancing Risk and Savings: Carefully assess your financial situation to determine a deductible that balances monthly savings with affordable out-of-pocket expenses.
Maintain a Clean Driving Record
As you gain more driving experience, maintaining a clean driving record without accidents or traffic violations can help reduce your premiums over time.
- Safe Driving Habits: Adopting safe driving habits, such as obeying speed limits, avoiding distractions, and practicing defensive driving, can help you avoid accidents and traffic violations.
- Accident Forgiveness Programs: Some insurers offer accident forgiveness programs that prevent your rates from increasing after your first at-fault accident, provided you have a clean record.
Consider the Type of Car You Drive
The make and model of your car can significantly impact your insurance rates. Generally, cars with high safety ratings and lower repair costs are cheaper to insure. Before purchasing a vehicle, check its insurance rates to avoid surprises.
- Safety Ratings: Cars with advanced safety features and high crash-test ratings are often cheaper to insure because they are less likely to result in severe injuries or expensive repairs.
- Cost of Repairs: Vehicles with readily available, inexpensive parts and straightforward repair processes typically have lower insurance premiums.
FAQs
Do I Need Car Insurance If I Don’t Own a Car?
Even if you don’t own a car, you may still need car insurance if you frequently drive rental cars, borrow cars from friends or family, or use ride-sharing services like Uber or Lyft. Non-owner car insurance provides liability coverage when driving vehicles you don’t own.
What Factors Can Cause My Car Insurance Rates to Increase?
Car insurance rates may increase due to:
- Accidents: Being at fault in an accident can lead to higher premiums.
- Traffic Violations: Speeding tickets, DUIs, and other violations can result in rate hikes.
- Moving to a New Area: Relocating to an area with higher accident or crime rates may increase premiums.
- Adding a Teen Driver: Adding a young or inexperienced driver to your policy can raise rates.
- Filing Claims: Filing multiple claims within a short period may lead to higher premiums.
Can I Switch Car Insurance Companies Mid-Policy?
Yes, you can switch car insurance companies at any time, even if your policy hasn’t expired. However, you may have to pay a cancellation fee if you cancel before the policy term ends. It’s essential to compare quotes and consider any potential savings before switching insurers.
