Car Insurance for New Drivers Over 21 [2021 Rates]

Car insurance for new drivers over 21 is around $375 per month. USAA, GEICO, Nationwide, and State Farm offer some of the more affordable car insurance for new drivers between the ages of 21 and 25. You can save 20 to 50 percent by participating in usage-based car insurance programs. Your car insurance rates will decrease 50 to 70 percent when you turn 25.

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Zaneta Wood, Ed.S. has over 15 years of experience in research and technical writing bringing a keen understanding of data analysis and information synthesis to reach a wide variety of audiences. She studied adult education and instructional technology at Appalachian State University as well as technical and professional communication at East Carolina University. Zaneta has prepared technical p...

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Joel Ohman is the CEO of a private equity backed digital media company. He is a CERTIFIED FINANCIAL PLANNER™, author, angel investor, and serial entrepreneur who loves creating new things, whether books or businesses. He has also previously served as the founder and resident CFP® of a national insurance agency, Real Time Health Quotes. He has an MBA from the University of South Florida. Jo...

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Reviewed by Joel Ohman
Founder & CFP®

UPDATED: Feb 17, 2021

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Here's what you need to know...

  • USAA, GEICO, Nationwide, and State Farm offer the cheapest rates for drivers between the ages of 21 and 25.
  • You can save 20 to 50 percent by participating in usage-based car insurance programs.
  • Your car insurance rates will decrease 50 to 70 percent when you turn 25.

Car insurance for new drivers over 21 has an average rate of $371 or less per month. Perhaps you have just left your parents’ home and have just purchased your first car. If so, you will need to get an auto insurance policy.

When you start to shop for an auto insurance policy, there are some important things you need to consider. First, let’s examine the required auto insurance coverage for your state.

Compare car insurance quotes for new drivers today to ensure you find the best rate for the coverage you need. Enter your ZIP code above to start comparing car insurance for new drivers over 21.

Who needs new driver car insurance?

Car insurance companies consider new drivers, or first-time drivers, a higher risk than others with more driving experience, so insurance rates for anyone under the age of 25 will be much higher than rates for drivers over 25.

Car insurance companies consider the following people new or first-time drivers:

  • Young drivers that just got a driver’s license
  • Young adults (under 25) that, for some reason, have yet to get a driver’s license, car, or car insurance
  • Those new to the United States such as immigrants and foreign nationals
  • Drivers of any age with a gap in driving
  • Drivers of any age with a gap in car insurance coverage

Many other factors go into determining your car insurance rates no matter your age such as where you live, your state’s laws, your driving record, and your credit score.

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How much is car insurance for a new driver over 21?

Car insurance for first-time 21 varies by age. The younger the driver, the higher the average annual rate. Let’s take a look at average car insurance rates by age in a chart.

Average Annual Car Insurance Rates by Driver's Age
Driver's AgeAverage Annual RatesMonthly Rates
60-Year-Old Driver$2,275$190
35-Year-Old Driver$2,447$204
25-Year-Old Driver$3,207$267
21-Year-Old Driver$4,453$373
17-Year-Old Driver$8,293$691
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Does car insurance go down at 21? Yes. Based on the average annual rates in the data, car insurance is nearly cut in half for 21-year-old drivers. Car insurance for first-time drivers over 25 is $1,200 less than 21-year-old driver car insurance and nearly $5,000 less than 17-year-old driver car insurance.

What are the cheapest new driver car insurance companies?

Driving experience, driving record, and credit score aren’t the only factors that affect your rates. The company you choose at any given point in your life can offer the best rate depending on your characteristics at that time in your life.

Right now, we will focus on age; however, you may be able to get a lower rate with a different company, so it pays to shop around.

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As you can see, USAA, GEICO, Nationwide, and State Farm offer the cheapest car insurance rates for drivers between the ages of 21 and 25. Note that USAA is available only to military members, active and inactive, retirees, and their immediate family members.

Also, you can change companies any time you like, even mid-policy, just make sure you don’t have a coverage gap.

What are the best new driver car insurance discounts?

Some of the more popular car insurance discounts for drivers between 21 and 25 are offered based on completion of driver training courses, having had no tickets or accidents, or participating in a company’s usage-based car insurance program.

Here is a sampling of car insurance discounts, the companies that offer them, and the percent discount that are most commonly applied for drivers between the ages of 21 and 25.

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As you can see, participating in a company’s usage-based car insurance program is one of the best discounts to ask about.

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When will my car insurance rates drop?

Your car insurance rates will drop when you turn 25 because statistically, the chances of your death in a vehicle lower considerably. Actuaries determine these statistics.

Insurance companies use actuaries and statistics to estimate the chances of a severe accident. Then they take these figures and make estimates on the likelihood of having to pay out claims on you.

As you exit the high-risk group (after age 25), your premium will automatically go down, provided you have kept your driving record clean during this time.

In the table below, it’s quite noticeable how much your car insurance rates will drop when you turn 25.

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Your rates will decrease by at least half, if not more, depending on the car insurance company you choose.

What is the required car insurance coverage for new drivers?

First, there are some required auto insurance coverages that you will need to make sure you have. The level of coverage and amounts are up to the states so you should first get familiar with what your state requires. The National Association Of Insurance Commissioners (NAIC) provides a map where you can find the insurance law of your state.

Some of the most common types of insurance that are required are listed below.

  • Bodily injury liability – This type of coverage covers injury that you are legally responsible for in the case of negligence or at-fault situations in an accident. Even in no-fault states, it is possible that the person you hit could sue you.
  • Property damage liability – Just like bodily injury liability, property damage liability covers the damages that you caused another driver’s vehicle in an accident. Liability always implies that you were at fault and that your negligence caused the problem or loss.
  • Uninsured/underinsured (in some states) – This type of coverage is sometimes required, but usually, it’s optional coverage. It covers damages and injury that you receive when the other driver is either uninsured or underinsured.
  • Personal injury protection – Personal injury protection (PIP) is usually an optional coverage, but it is one you may want to consider when you are shopping for coverage. PIP coverage will often cover your medical expenses, time out of work, and other expenses if you are in an accident that creates an injury that keeps you from work.

Start comparing car insurance for new drivers over 21 with our free comparison tool. Enter your ZIP code to get started.

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How do I move off of my parents’ car insurance?

If you are leaving your parents’ insurance and getting your coverage, you will want to talk to your parents about it so that they will be able to help you make the transition.

They will have to call their insurance company and have them take you off their plan so that you can get your coverage but do not do so until you locate a new policy.

Insurance agents and others involved in the insurance industry are required to remind you that you should wait to cancel any previous coverages until you have the new one in your possession.

If you don’t, you may not be covered for a short period in between as you are changing your insurance plan. It is important to note that you should not have your parents cancel the insurance policy you have under their policy until you have the new policy in hand.

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How do I avoid a lapse in car insurance coverage as a new driver?

One thing you need to avoid at all costs is driving without insurance. When you let your car insurance lapse, you put yourself at risk for legal and financial loss.

This is why you should be careful when changing plans so that there is no time that you are uncovered.

Even if you are uncovered for just one day, if you have an accident on that day, you will be responsible for all of the costs involved in either your injuries or damage or injuries to others.

It also puts you at a high legal risk as you are required to carry insurance in every state except for two (New Hampshire and Virginia).

If your car insurance is about to expire, you get a quote from car insurance companies in your local area by entering your ZIP code in the FREE comparison tool below.

What if my car insurance company cancels my policy?

As International Risk Management Institute, Inc. notes, insurance companies are required by law to notify you 30 days before the cancellation of your policy. They must notify you in writing if your policy is in danger of lapsing or if you have failed to pay your premiums.

Remember that your policy will not lapse until you have gone for thirty days without paying the premium if you let the policy go without paying.

As stated before, it’s best to get your new insurance in place first and then cancel your previous coverage with your parents’ policy.

Insurance companies will send you a notice before cancellation (as required by law) if you choose to have your parent stop paying for your coverage.

The most important thing is that you have coverage and do not drive for any period uncovered. As a new driver, this is especially important as you build your reputation as a driver with your insurance company.

What affects my car insurance rates?

Many factors determine the cost of your insurance premiums.

The most influential factor in your car insurance rates is your driving record. Avoid accidents at all costs and obey all traffic regulations.

Try to keep your traffic record flawless, especially when you are just starting as a new driver. This will keep your premiums low and will make it easy to transition to other policies if you should choose to do so.

It is important to note that, if you are between the ages of 18 and 25, you are still in the highest risk group for accidents.

Because of this, you will need to keep in mind that the statistics are against you and you should use extreme caution when driving at all times. Statistics, such as those from the National Highway Traffic Safety Administration, determine risk, and risk determines auto insurance rates.

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How do I find the cheapest car insurance for new drivers?

When you are shopping online for the best insurance deals, you should always keep in mind what your personal needs are. Do you drive a long distance every day to work? Do you take others in the car with you regularly to and from work or other locations?

If you answered “yes” to any of these questions, then you may want to increase your amount of liability coverage for the carpooling situation and increase your overall coverage for longer distances.

Remember that the longer distance you drive, the higher your risk level.

Comparing and shopping around for your insurance plan is the best thing you can do to find the best policy and company to have as your insurance company.

For example, compare State Farm Car Insurance and GEICO car insurance to see which has better car insurance rates. If you are in the military, or a veteran, you may want to check out USAA car insurance.

Your insurer can be your best friend because they are there to pay for damages when you have an accident. It avoids you having to go to court with others in many cases and helps you to stay in good standing with your driving record.

If you have any questions about your current policy or if you need help changing over from another policy, use the resources on our site to help with your transition, and feel free to ask questions as you go.

When you have the right coverage, you can drive freely knowing that you are covered if something happens and you’ll have peace of mind knowing that your insurance company will back you up when you need it most.

Ready to buy car insurance for new drivers? Compare car insurance rates for new drivers over 21 today and see how much you could save. Enter your ZIP code in the FREE comparison tool to start.

Frequently Asked Questions: Car Insurance for New Drivers Over 21

Let’s wrap up this guide with a few questions that recap what you’ve learned and answer frequently asked questions that appear on search engines across the internet.

#1 – What is the best car insurance for a 21-year-old driver?

Although we can’t say what’s the best car insurance company, we can inform you that the best car insurance coverage for a 21-year-old driver is full coverage. Drivers who are 21 are still considered high risks.

#2 – How much is car insurance for a 22-year-old per month?

Car insurance for a 22-year-old driver is $344 per month.

#3 – How much is insurance on a car for a 21-year-old?

Car insurance for 21-year-old drivers is about $4,500 per year, which is about $375 per month. Cheap car insurance for new drivers under 21 is only available through discounts.

#4 – What is the average car insurance for a 21-year-old female?

The average annual rate for 21-year-old female drivers is $4,300 per year, which is $358 per month for car insurance.

#5 – How much is car insurance for a 20-year-old per month?

Car insurance for a 20-year-old driver is $444 per month.

#6 – What is the best car insurance for new drivers under 25?

The best car insurance company is the company that gives you solid coverage at a rate that you can afford. It’s ultimately up to the customer on which car insurance is best for new drivers.

#7 – How much is car insurance for a 24-year-old male?

A 24-year-old male driver can pay up to $3,600 per year or $300 per month for car insurance.

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Average Monthly Car Insurance Rates by State