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There’s no bigger milestone in the teen years than getting a driver’s license, but the excitement can quickly wear off when you learn the cost of the premiums.
Car insurance companies base their premiums on risk and the lack of experience new drivers have is enough for most companies to hike up the rates. Fortunately, there are a few things you can do to lower the cost of car insurance for a 16 year old.
How much does car insurance for a 16-year-old cost?
The exact cost of car insurance for your 16-year-old varies based on your location, their gender, the make/model of the vehicle, and if your teen is on the policy with you or by themselves.
Tip
It’s generally cheaper to put a teen on your policy as an additional driver. They are able to take advantage of your lower rates as an experienced driver, plus any other discounts you’ve earned.To give you an idea of how much you may have to pay for an individual policy for a 16-year-old male or female, here’s a quick summary from two major insurers based on quotes received in August 2024.
Average car insurance cost for 16-year-old males and females
For the quotes below, drivers were newly licensed 16-year-olds living in Delray Beach, Florida, with a clean driving record. They drove a two-wheel-drive 2020 Mazda CX-5 Sport. These quotes are for teenage drivers on their own policies.
Full coverage car insurance quotes had limits of 10/20/10 with $500 deductibles for comprehensive coverage and collision coverage. The 10/20/10 numbers represent coverage limits of $10,000 for bodily injury coverage for one person, $20,000 for bodily injury coverage for all people, and $10,000 in property damage liability coverage.
| Company | Insurance cost for 16-year old male | Insurance cost for 16-year old female |
| Geico | $2,957.56 per six months | $2,949.92 per six months |
| Progressive | $2,437 per six months | $2,737 per six months |
Why car insurance for teenagers is so expensive
Overall, teenagers can be riskier to insure than other groups. The National Highway Traffic Safety Administration (NHTSA) says, “Teen drivers have a higher rate of fatal crashes, mainly because of their immaturity, lack of skills, and lack of experience. They speed, they make mistakes, and they get distracted easily.”
The Insurance Institute for Highway Safety (IIHS) also states that fatal crashes are about three times as likely for 16- and 17-year-olds than drivers ages 20 and older. With these jarring statistics, it’s easy to see why car insurance is typically so expensive for teenagers.
What factors impact the cost?
Because teen drivers don’t have a driving history, car insurers base their premiums on several other factors. They mostly use data from other 16-year-old drivers in similar circumstances to price the policies.
Here’s what affects most car insurance premiums for teens.
Gender
Like it or not, gender impacts car insurance costs. This is likely due to information from the Insurance Institute for Highway Safety showing that male drivers aged 16 to 19 have an almost two times higher fatal passenger motor vehicle crash rate per mile driven than female drivers in the same age group.
Car accidents cause insurance companies money, and fatal accidents are often even more expensive due to the nature of the incident. Each car insurance company has different rates for male vs female teens, but it’s not unusual to see rates as much as 20% higher for males.
Teen policy vs. parent policy
There are several reasons to consider adding your teen to your policy versus purchasing one in their name.
- Secondary driver: When you add your teen to your policy, they become a secondary driver, especially if you have more drivers than cars. A secondary driver is less risky than a primary driver because ultimately, they drive less frequently.
- Lower rates: Because you’ve established a driving history already, your teen can piggyback off the history and secure lower rates. An individual policy doesn’t offer that option since there’s no driving history for a new driver.
- Discounts: You may be eligible for more discounts than your teen would on his/her own. For example, you may get bundled or multi-vehicle discounts.
Location
Your location plays an important role in your teen driver’s insurance rates, for several reasons:
- State laws: Each state has different minimum insurance requirement laws. The more insurance you need, the higher the premiums.
- Type of area: Where your teen will be driving affects their insurance premiums. For example, congested cities are often much more expensive than rural towns.
Tip
If you live in an area with a large number of uninsured drivers or high tourist rates, as a few examples, insurance companies will charge more overall to make up for the risk, which can greatly affect a teen’s insurance premiums.Coverage level
Beyond the state’s minimum requirements, you have options regarding how much coverage you purchase for your teen. Of course, the higher the coverage amount, the higher the cost, but you must look at the big picture.
Let’s say for example you purchase only the state minimum coverage of $25,000 liability for bodily injury/property damage and your teen causes an accident that incurs $50,000 in medical bills. The victims could sue you for the difference, so carrying adequate coverage likely makes more sense as it will cost much less than the damages caused to another person or property.
Vehicle type
The make and model of the vehicle your teen drives will affect the premiums. Every insurance company has different rates for different vehicles. Before buying a car for your teen, I recommend contacting a couple of insurance companies to find out the estimated premiums first.
Newer cars may have lower premiums because of the advanced technology and newer safety features, but you don’t know until you get a quote. How a car drives and protects its occupants in a crash might also impact rates. For example, minivans aren’t known for excellent acceleration, but they generally protect their occupants fairly well. Similarly, a Honda Civic is an economical sedan designed to get people around town affordably. These factors could potentially result in lower rates than insuring a performance-oriented, convertible sports car, such as a Corvette or a BMW.
Also, keep in mind that the more expensive a car is, the more an insurance company may have to pay out in an accident, assuming you have enough coverage. If your family owns multiple cars, it’s a good idea for your teen to drive the least expensive one.
How to save money on your teen’s car insurance
Fortunately there are several ways to save money on car insurance for your teenager. In addition to adding your teen to your policy, you might lower costs by increasing the deductibles on the car insurance plan. You will likely have to pay more money out of pocket after an accident if you do this, though, so make sure you can cover the car insurance deductible cost you choose.
Here are some additional ways to save money on teen car insurance.
Good grades
Many insurance companies reward students who maintain good grades. These students are generally seen as more responsible at school and as drivers. Each car insurance company might have its own definition of a good student, but many seem to use the B average (3.0 GPA) or better as a benchmark.
Driver education
Some insurance companies offer discounts if teens take additional courses besides the basic driver’s ed course. For example, they may lower the rate if your child takes a defensive driving course, or another course they offer to reduce the risk of an accident. For instance, Allstate allows you to take the teenSMART driver education program as one of three options to qualify for a discount.
Student away at school
When a student attends school away from home and doesn’t bring a car, insurance companies may offer a discount because they aren’t driving the vehicle. Check with your insurance company regarding the number of miles away the school must be to qualify.
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FAQs
Getting car insurance for teenagers can feel overwhelming. Here are answers to some frequently asked questions.
What's the cheapest car insurance for a 16-year-old?
The cheapest car insurance depends on many factors including the vehicle’s make/model, your location, the teen’s gender, and the amount of coverage purchased. I found that Progressive offers some of the lowest rates for a 16-year-old driver in Delray Beach, Florida, but that can differ in other areas.
Should you add your teen to your auto insurance policy?
Adding a teen driver to a family insurance policy is often much cheaper than purchasing their own car insurance policy. However, it’s not right for every family. I suggest obtaining quotes for a teen-owned policy and adding him/her to your policy and compare the differences.
Does your 16-year-old need car insurance?
Not all 16-year-olds need car insurance. If your teenager doesn’t have a driver’s license or never drives and doesn’t own a car, there might be no need for insurance. However, almost every state requires all drivers, including 16-year-olds, to have the state’s minimum auto insurance coverage before driving a vehicle.
The bottom line
Car insurance for 16-year-olds isn’t cheap. While you probably want the best coverage for your new driver, you must take into account the overall cost. Adding your teen to your policy is your best bet at keeping rates down, while also shopping around for the best car insurance companies for teen drivers. I encourage you to ask for any and all discounts, including classes your child can take to keep the rates low.
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