Cheapest Car Insurance for New Drivers [2025]: Auto-Owners Tops the List for Affordability

New drivers pay higher car insurance rates than mature drivers with plenty of experience behind the wheel. Your premiums will decrease over time if you keep a clean driving record, but budgeting for insurance in the meantime may be tough. Full coverage policies for teen drivers cost an average of $366 per month — a significant hit to the wallet no matter which way you look at it.

That may be why more teens are taking the bus or hitching a ride. Just over two thirds of 19 year olds were licensed drivers in 2023, a drop from 74% two decades prior, according to data from the Federal Highway Administration. But even if you wait until your 20s to hit the road, auto insurance companies will still charge you more for your lack of driving experience.

If you're a new driver, make sure to shop around and explore new driver discounts. Some car insurance companies charge more than others, and our top picks — such as Auto-Owners, USAA, and Erie — are cheaper than you think.

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Cheapest car insurance for new drivers

Company name	Best for	Average full coverage cost for teens	Average full coverage cost for drivers in their 20s*
GEICO	Drivers in their 20s	$183	$141
Auto-Owners	Overall affordability	$115	$90
USAA	Military families	$176	$125
Root	Usage-based insurance	$195	$158
State Farm	Discounts	$221	$151
Erie	Customer satisfaction	$176	$125

*Data for drivers in their 20s includes all drivers in that age range without accounting for specific number of years' experience driving.

GEICO

Best for drivers in their 20s

Company Details

AM Best: A++ (Superior)
J.D. Power claims satisfaction: 692/1,000 (study average 697)
BBB: A+ (Not accredited)
NAIC complaints: 0.75 (Private Passenger)

GEICO is among the cheapest car insurance companies for drivers in their 20s. The company's usage-based program, DriveEasy, earned second place in the J.D. Power 2024 U.S. Auto Insurance Study, and you can earn a 15% discount just for enrolling. Young drivers who choose GEICO may also earn a discount for completing an approved driver training course.

If you're just starting out and have poor credit or no credit history, you'll appreciate that GEICO doesn't increase rates as much as some other companies for drivers with low credit scores. GEICO also charges well below the national average premium for teen drivers. In fact, it made our list of the best car insurance companies for its affordable rates.

Pros

Highest financial strength rating from AM Best
Various discounts for young drivers
Cheap premiums for teens and new drivers

Cons

Below-average J.D. Power rating for claims satisfaction
High volume of complaints with the BBB
Few optional coverage add-ons

Learn more in our GEICO review.

Auto-Owners

Best for overall affordability

Company details

AM Best: A+ (Superior)
J.D. Power claims satisfaction: 692/1,000 (study average 697)
BBB: A+ (Accredited)
NAIC complaints: 0.46 (Private Passenger)

Of the major car insurance companies, Auto-Owners offers the cheapest average premiums for drivers who are teens or in their 20s, based on Insurify data. The company also offers several discounts for young drivers, including a good student discount and a teen driver monitoring discount.

Plus, you can add accident forgiveness and roadside assistance to your policy. These options provide peace of mind whether you're handing over the keys to a teen in the family or buying coverage for yourself.

However, Auto-Owners is available in only 26 states, so it might not be an option where you live.

Pros

Cheap premiums and multiple discounts for young drivers
Very low NAIC complaint index
Represented by a network of independent agents

Cons

Available in only 26 states
Doesn't offer usage-based insurance
Mediocre mobile app ratings

Learn more in our Auto-Owners review.

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USAA

Best for military families

Company details

AM Best: A++ (Superior)
J.D. Power claims satisfaction: 726/1,000 (study average 697)
BBB: A+ (Not accredited)
NAIC complaints: 0.96 (Private Passenger)

USAA auto insurance is available only to military members, veterans, certain federal employees, and their families. But if you're a new driver and qualify for membership, USAA might be a good bet. The company is highly rated for both financial strength and claims satisfaction, and it has the fourth-cheapest average premiums for teens and 20-somethings.

USAA also provides some opportunities for new drivers to save money on car insurance. For example, the company offers a driver training discount, a good student discount, and a usage-based insurance program called USAA SafePilot.

Pros

Highly rated mobile app with roadside assistance request
High J.D. Power claims satisfaction rating
Cheaper-than-average premiums for drivers in their teens and 20s

Cons

Fewer general discount options than some competitors
Offers car insurance only to USAA members

Learn more in our USAA review.

Root

Best for usage-based insurance

Company details

AM Best: Not rated
J.D. Power claims satisfaction: Not rated
BBB: A- (Accredited)
NAIC complaints: 1.93 (Private Passenger)

Root calculates premiums based on your driving behavior, so if you're a new driver who's safe and responsible behind the wheel, you may get a better rate with this company. In fact, Roots' average full coverage premium for teen drivers is less than half the national average for all companies.

This insurer offers fewer coverage options than competitors. There aren't many car insurance discount opportunities either, though you can save by bundling coverage or paying in full. However, the company offers roadside assistance coverage with in-app requests.

Pros

Bases rates on how you drive
Excellent Trustpilot rating
Much cheaper-than-average car insurance premiums for teen drivers

Cons

Unavailable in 15 states and Washington, D.C.
Nearly twice as many NAIC complaints as competitors with a similar market share
Doesn't offer student discounts

Learn more in our Root review.

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State Farm

Best for discounts

Title goes here

AM Best: A++ (Superior)
J.D. Power claims satisfaction: 710/1,000 (study average 697)
BBB: F (Not accredited)
NAIC complaints: 0.84 (Private Passenger)

While State Farm is the most expensive auto insurer on this list for young drivers, the company offers some of the best discounts, including a generous good student discount of up to 25% that may last through age 25. State Farm also offers a unique telematics program, Steer Clear, designed for drivers under 25. The program provides training modules to help young drivers learn safe driving skills, and eligible drivers will also earn a discount.

In my experience, State Farm's emergency road service coverage is top-notch, and the service is super fast, which is great for parents worried about their teens getting into trouble on the road. New drivers who lack experience with car insurance may also appreciate having a dedicated agent and an award-winning mobile app.

While State Farm doesn't offer the cheapest premiums, the company still offers more affordable car insurance for new drivers than many of its competitors.

Pros

Highly rated for financial strength and claims satisfaction
Generous discounts for students and young drivers
Excellent roadside assistance coverage

Cons

"F" BBB rating due to many unresolved or unanswered complaints
Not the cheapest company for drivers in their teens or 20s

Learn more in our State Farm review.

Erie

Best for customer satisfaction

Company details

AM Best: A+ (Superior)
J.D. Power claims satisfaction: 733/1,000 (study average 697)
BBB: A+ (Not accredited)
NAIC complaints: 0.82 (Private Passenger)

Erie offers affordable rates for new drivers. It has the second-lowest full coverage premiums for drivers in their 20s (tied with Mile Auto) and the third-lowest full coverage premiums for teens. The regional insurer also offers multiple discounts for young drivers under 21 and a student discount.

Erie takes the cake for customer satisfaction with its third-place J.D. Power ranking for claims satisfaction, low NAIC complaint index, and 24/7 claims support. The company also offers features that may appeal to new drivers worried about accidents — you can add the Rate Lock feature to freeze your premium after a claim, and the company will forgive your first accident in most states if you've been a policyholder for more than three years.

The drawback is that you can get Erie car insurance in only 12 states and Washington, D.C.

Pros

Cheap premiums for teens and new drivers
Highly rated for claims satisfaction by J.D. Power
Multiple discounts for young drivers

Cons

Doesn't offer a telematics discount
Available in only 12 states plus D.C.

Learn more in our Erie review.

Why is car insurance more expensive for new drivers?

Car insurance companies charge higher premiums for new drivers due to their lack of driving experience. New drivers are also more likely to be teens or young adults, and auto insurers tend to charge higher rates for policies that include drivers under the age of 25. That's because young drivers tend to cause more accidents — in particular, teens are more likely to be in a crash than any other age group, according to the Centers for Disease Control and Prevention.

Besides considering your age and driving record, auto insurance companies look at the following factors when setting car insurance rates:

Annual mileage
Location
Marital status
Gender
Make, model and age of the vehicle
Credit score (in most states)
Your coverage choices

How to save on car insurance as a new driver

Aside from getting older and maintaining a clean record, you can lower your car insurance as a new driver with these tips:

Compare car insurance quotes: Every car insurance company prices policies differently. Collect quotes from at least three different insurance companies to ensure you get the lowest premium for the coverage you need.
Buy the right vehicle: The value of your car and its repair costs impact your car insurance premiums. Safe vehicles with security features tend to be cheaper to insure. You may want to get insurance quotes while you're shopping for your first car and choose the right vehicle accordingly.
Only buy coverage you need: While most drivers buy full coverage insurance, it may not be worth the cost if you have an old car worth less than 10 times the premium. You can also save money by opting out of optional coverages like rental car reimbursement.
Look for young driver discounts: Many insurers offer discounts for young drivers, including student discounts and driver training discounts.
Explore other discounts: Consider bundling your auto insurance with your home or renters policy to save on your premiums. You might also take advantage of payment discounts, new vehicle discounts, and other savings opportunities.
Enroll in a usage-based program: Usage-based programs use a telematics device or mobile app to monitor your driving behavior. You can often earn a discount for safe driving.
Consider a high deductible: Raising your deductible will usually lower your monthly premium. Just make sure you have enough cash stashed away to cover your deductible since you'll be responsible for that amount if you need to repair your car after a claim.

FAQs

What is the cheapest insurance company for new drivers?

The cheapest car insurance company for new drivers will depend on your driving history, age, credit score, location, and other factors. On average, Auto-Owners offers the cheapest premiums for drivers who are teens or in their 20s.

How do you get car insurance as a first-time driver?

Start by determining the coverage you need and then evaluating insurance companies that serve your state. Get a few quotes from different companies to compare pricing. Make sure to have important info on hand — like your driver's license number and the make, model, and year of your vehicle — when you go online or call an agent.

What is the best car insurance for new drivers?

The best car insurance company will depend on your demographic information, coverage needs, and budget. If you need a place to start, GEICO and State Farm are national companies that offer great coverage and affordable rates to new drivers. You may also consider USAA if you qualify for membership, or Root, Auto-Owners, or Erie if they're available in your area.

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Bottom line

Driving for the first time comes with benefits (like road trips) and drawbacks (like traffic and high insurance premiums). Fortunately, you can reduce the impact of driving on your finances by choosing a car insurance company that offers affordable rates to new drivers.

This list is a great place to start, but you should also consider your coverage needs and compare customized quotes from a few different companies before buying a policy.

Data throughout provided by Insurify.

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