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Cheapest Car Insurance for Drivers Under 25
Drivers in their mid-20s tend to pay more for car insurance than older drivers because they have less experience and are riskier to insure. So where do you find the cheapest car insurance for 25-year-olds? No two people have the exact same driving profile, but some companies are cheaper than others on average.
Cheapest Car Insurance Companies for 25-Year-Olds
Considering cost, availability, coverage, reputation and customer experience, Geico is our recommendation for the best car insurance for 25-year-olds. We’ll break down our top five picks below.
| Car Insurance Company | Overall Rating | Our Award |
|---|---|---|
| 1. Geico | 9.1 | Best for Budget-Conscious Drivers |
| 2. USAA | 9.2 | Best for Military Members |
| 3. State Farm | 9.4 | Best Customer Experience |
| 4. Nationwide | 9.1 | Best for Usage-Based Insurance |
| 5. Erie Insurance | 9.4 | Best for Basic Insurance Coverage |
*The overall rating applies to a standard driving profile, while the ranking order applies to 25-year-old drivers.
How Much Is Car Insurance for a 25-Year-Old?
On average, 25-year-olds pay about $2,336 per year or $197 per month for full coverage car insurance policies. This is about 16% more than the national average for 35-year-old drivers, which is $2,008 per year.
Cheap Car Insurance for 25-Year-Olds
If you’re looking for the lowest rates, Nationwide offers the best car insurance for 25-year-olds, with rates of $1,663 per year or $139 per month on average. Travelers is another cheap option, with average rates of $1,694 year or $141 per month.
25-year-old Quotes for Car Insurance
Below, you can see how 11 popular car insurance companies rank on cost for 25-year-olds. Many additional companies — like Erie Insurance, USAA, Auto-Owners Insurance and State Farm — offer below-average costs for their monthly and annual premiums.
| Car Insurance Company | Monthly Cost Estimate | Annual Cost Estimate |
|---|---|---|
| Nationwide | $139 | $1,663 |
| Travelers | $141 | $1,694 |
| Erie Insurance | $150 | $1,796 |
| Geico | $151 | $1,807 |
| USAA | $152 | $1,825 |
| State Farm | $163 | $1,952 |
| American Family Insurance | $169 | $2,023 |
| Auto-Owners Insurance | $173 | $2,076 |
| Progressive | $187 | $2,243 |
| Market average | $195 | $2,336 |
| Allstate | $247 | $2,958 |
| Farmers | $302 | $3,626 |
*Car insurance estimates are based on full coverage policies with $50,000 bodily injury per person, $100,000 bodily injury per accident, $50,000 property damage per accident and a $500 deductible for comprehensive and collision coverage.
Why Is Car Insurance So Expensive for a 25-Year-Old?
Car insurance companies set rates based on the risk a claim will be filed, and young adults are seen as high-risk drivers. While 25-year-olds are no longer teen drivers, they still don’t have as much experience behind the wheel as older drivers.
According to the AAA Foundation for Traffic Safety, 25- to 29-year-old drivers had 526 accidents per 100 million miles driven in 2014 and 2015, while the next age group, 30- to 39-year-olds, had 328 accidents. Even if a 25-year-old has never had any traffic infractions or accidents, they’re still seen as a higher risk to insure than 35- or 45-year-olds.
| Age Group | Crashes per 100 Million Miles Driven |
|---|---|
| 16–17 | 1,432 |
| 18–19 | 730 |
| 20–24 | 572 |
| 25–29 | 526 |
| 30–39 | 328 |
| 40–49 | 314 |
| 50–59 | 315 |
| 60–69 | 241 |
| 70–79 | 301 |
| 80+ | 432 |
Best Cheap Auto Insurance for 25-year-old Drivers
The best cheap auto insurance for 25-year-olds will depend on your situation. We’ve included details on our top recommendations below.
#1: Geico
Overview
Geico’s average rates for 25-year-olds are about 30% cheaper than the national average, which translates into $50 in savings each month. The company offers a wide range of auto insurance coverage options and a highly rated mobile app, plus discounts with its usage-based DriveEasy program. Geico’s A+ rating from the Better Business Bureau (BBB) reflects its reputation for affordability and good customer service.
Learn more in our Geico insurance review.
#2: USAA
Overview
USAA deserves a spot among the best car insurance companies for 25-year-olds for its cheap rates and reliable customer service. Average rates with USAA are about 36% cheaper than the national average for 25-year-olds. Like Geico, USAA offers multiple discounts, including a safe-driving program called SafePilotTM. Plus, the company consistently earns the highest scores in J.D. Power studies like the 2022 U.S. Auto Insurance Study and 2021 U.S. Auto Claims Satisfaction Study.
Learn more in our USAA insurance review.
#3: State Farm
Overview
State Farm often has some of the best rates for younger drivers. Our estimates show that 25-year-olds tend to pay about 16% less with State Farm than the national average. And if you’re a good driver, you could save up to 30% with the Drive Safe & Save™ usage-based program. Being a safe driver can also help you earn accident-free and good driver discounts from the company.
Learn more in our State Farm insurance review.
#4: Nationwide
Overview
Nationwide makes our list of the best car insurance for 25-year-olds because its average rates are 23% below average for the age group. Nationwide also offers a variety of discounts that include two telematics insurance programs: SmartRide® and SmartMiles®. You can save up to 40% with SmartRide by practicing safe driving habits. If you don’t drive much at all, you can get pay-per-mile insurance with SmartMiles.
Learn more in our Nationwide Insurance review.
#5: Erie Insurance
Overview
Available in 12 states and Washington D.C., Erie Insurance offers very affordable rates for 25-year-olds. Our estimates show this age group pays an average of about 25% less with Erie than with the national average for full coverage car insurance. In addition to standard auto insurance, Erie offers pet coverage, personal item coverage, auto glass repair and more.
Learn more in our Erie Insurance review.
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How To Save on Car Insurance for 25-Year-Olds
Being young doesn’t mean you’re destined to pay outrageous prices for car insurance. There are a number of things you can do to find better insurance premiums and save money.
Compare Car Insurance Companies
There are many factors that affect car insurance rates which are taken into account by providers. By comparing companies, you may find rates that are better than what you’re paying now.
Raise Your Deductible
Increasing your deductible will lower your premium because you’ll pay more out of pocket if you damage your car. As you take on more risk, the insurance company lowers your rate. Be sure you can afford to pay the deductible, of course.
Reduce Your Coverage Amounts
Consider the type of protection you’d want if you got into an accident. The cheapest option would be to get the minimum coverage required in your state. But think about the financial consequences of not having enough coverage when making this decision.
Keep a Clean Driving History
Car insurance premiums are already high for young drivers with good driving records. If you get a speeding ticket or cause an accident, you can say goodbye to affordable rates for years. That’s why it’s so important to have a clean driving record as a young adult. Having a clean record will also help you get accident-free and safe driving discounts.
Look for the Right Discounts
Car insurance companies offer discounts that can make a big difference in your insurance bill, and each provider offers a different list of them. That means the best auto insurance company for one driver might not be the best for another. Take time to find the car insurance discounts that make the most sense for your situation. These may include:
- Multi-policy bundling discount
- Multi-car discount
- Safe driver discount
- Accident-free discount
- Federal employee discount
- Military discount
- Good student discount
- Usage-based insurance discount
If you bundle your homeowners or renters insurance with your car insurance policy, you could qualify for a discount at most insurance companies. If you have good grades or take a defensive driving course, most providers have discounts for this as well. Sometimes just being a new driver or adding special safety features to your car can qualify you for discounts.
Auto Insurance for 25-Year-Olds: The Bottom Line
Even though 25-year-olds generally pay more for coverage than older drivers, there are still cheap companies out there. Comparing car insurance quotes is one of the simplest ways to find cheap car insurance. We recommend comparing at least three quotes each time your auto insurance policy is up for renewal.
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Car Insurance for 25-Year-Olds: FAQ
Below are frequently asked questions about car insurance for 25-year-olds:
Car insurance is not a one-size-fits-all solution. You can purchase higher or lower limits, optional coverage types and enhanced policy features. When determining how much coverage you need, you’ll want to think about your situation and the amount of insurance you’re required to carry in the state you live in.
According to our research, the best car insurance company is State Farm. The company received high marks in our review of the best car insurance companies and scores well across consumer studies.
Car insurance is usually cheaper after you turn 25 compared to car insurance for drivers in their teens and early 20s. On average, 25-year-olds pay about 28% less for full coverage insurance than 21-year-olds. Rates will typically continue to decrease until you turn 35 if you keep a clean driving record.
Our estimates show the average 25-year-old spends about $2,336 per year for full coverage car insurance, which is about 16% more than what 35-year-olds pay. This is because insurance companies see 25-year-olds as high-risk drivers.
Most states require car insurance, so yes, you can insure a 25-year-old car. Car insurance for a 25-year-old vehicle tends to be cheap since you likely only need the basic liability coverage required by your state. But if it’s an antique vehicle with value, you’ll need specialty classic car insurance coverage.
Our Methodology
Because consumers rely on us to provide objective and accurate information, we created a comprehensive rating system to formulate our rankings of the best car insurance companies. We collected data on dozens of auto insurance providers to grade the companies on a wide range of ranking factors. The end result was an overall rating for each provider, with the insurers that scored the most points topping the list.
Here are the factors our ratings take into account:
- Cost: Auto insurance rate estimates generated by Quadrant Information Services and discount opportunities were both taken into consideration.
- Coverage: Companies that offer a variety of choices for insurance coverage are more likely to meet consumer needs.
- Reputation and experience: Our research team considered market share, ratings from industry experts and years in business when giving this score.
- Availability: Auto insurance companies with greater state availability and few eligibility requirements scored highest in this category.
- Customer experience: This score is based on volume of complaints reported by the NAIC and customer satisfaction ratings reported by J.D. Power. We also considered the responsiveness, friendliness and helpfulness of each insurance company’s customer service team based on our own shopper analysis.
Our credentials:
- 800 hours researched
- 45 companies reviewed
- 8,500+ consumers surveyed
*Data accurate at time of publication.
