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: Nov 24, 2020

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Here's what you need to know

  • On average, car insurance costs $84 per month or $1,009 annually but first-time drivers will likely pay more.
  • There are many discounts first-time drivers can qualify for but not all are advertised publicly.
  • Keep your driving record clean to avoid paying even more for car insurance coverage for a first-time driver.

Are you new to driving and struggling to find cheap car insurance for first-time drivers? The average cost of car insurance in America is $84 per month or $1,009 annually. However, premiums do tend to be costlier for first-time drivers under the age of 25. Despite this, there are many ways to find affordable car insurance for first-time drivers that won’t break the bank.

The most important thing to remember when looking for the cheapest way to insure a new driver is that it pays to shop around. You should obtain multiple quotes from several insurance companies before making a decision. This will help you find the best insurance for new drivers.

Also, examine the policies and see what discounts different companies may offer that you could take advantage of, including a discount for shopping online. You might be able to save by purchasing a basic liability car insurance coverage package as opposed to a fuller coverage policy.

Most insurance companies offer discounts of between 10 to 20 percent for shopping and buying policies online versus over the phone or in person.

Online shoppers save companies money because it cuts down on the need for staff. Thus, companies are able to offer potential customers cheaper rates. Read on for information on finding the cheapest way to insure a new driver.

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Table of Contents

How Can I Find Cheaper Car Insurance for First-Time Drivers?

If you just recently passed your licensing exam or you are in the process of buying your first car, it is time to educate yourself on the insurance buying process. The idea of buying a product that may provide you with hundreds of thousands of dollars in benefits over the life of the policy can be intimidating when you are doing it for the first time.

With all of the information you need to learn, it might feel as if you need to take an Insurance 101 college-level course just to build yourself a policy that satisfies the law and does not compromise your protection. Fortunately, enrolling in a college course is not necessary when you know where to find valuable and informative sources.

What is the cheapest car insurance for a new driver? The average rates for coverage in the US are $84 per month or $1,009 annually, but car insurance rates for first-time drivers are bound to be higher than average. Don’t get caught off guard if you’re a first-time driver.

Below, you can find a table with rates based on age in Anchorage, AK from several different insurance companies, including USAA, Geico, and State Farm.

Average Annual Car Insurance Rates by Age
Group17-Year-Old Driver Average Annual Rates25-Year-Old Driver Average Annual Rates35-Year-Old Driver Average Annual Rates60-Year-Old Driver Average Annual Rates
USAA$4,759.32$2,046.53$1,387.58$1,302.67
State Farm$6,212.12$2,034.74$1,702.72$1,528.24
Progressive$8,049.01$2,315.70$1,968.73$1,791.38
Geico$5,731.98$2,309.42$2,219.42$2,070.09
Allstate$6,551.18$2,857.51$2,435.27$2,329.28
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However, some newly licensed drivers are older. Those over the age of 25 will have an easier time securing cheaper rates.

How can all new drivers get cheap car insurance rates? Lower your bill by up to 20 percent by comparing quotes from multiple different companies. Regardless of your age, there are also many discounts that you might qualify for. Keep reading to learn more.

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Which Factors Determine Car Insurance Costs for First-Time Drivers?

Isn’t the feeling of getting behind the wheel for the first time invigorating? When you drive for the first time you feel independent, in control, and perhaps even ambitious. You can now drive all over the city, perhaps even the entire country.

Well, that exhilarating new feeling wears off over time, and before long, you’re grumbling about having to find car insurance. There are some factors that go into calculating your rates that are concrete, and you have to work around them if you are a first-time driver. Though looking for your first policy can be frustrating, rest assured you can find a policy out there.

Factors that determine your insurance premiums include your age, gender, the state you live in, and your driving record.

In the table below, you can see how drastically car insurance rates vary depending on what state you live in.

First-Time Driver Average Annual Car Insurance Rates by Coverage Level By State
StateFull Coverage Average Annual RatesComprehensive Coverage Average Annual RatesCollision Coverage Average Annual RatesLiability Coverage Average Annual Rates
Alabama$868.48$156.31$317.96$394.21
Alaska$1,027.75$137.26$350.81$539.68
Arizona$972.85$186.12$277.96$508.76
Arkansas$906.34$190.41$321.80$394.13
California$986.75$100.54$396.55$489.66
Colorado$981.64$174.61$287.00$520.04
Connecticut$1,151.07$131.62$368.51$650.94
Delaware$1,240.57$122.49$318.77$799.30
District of Columbia$1,330.73$233.24$468.67$628.82
Florida$1,257.13$116.53$282.96$300.22
Georgia$1,048.40$159.18$331.83$857.64
Hawaii$873.28$101.56$313.17$557.38
Idaho$679.89$116.55$219.05$458.54
Illinois$884.56$128.13$309.71$344.29
Indiana$755.03$122.06$250.29$446.72
Iowa$702.46$183.53$219.75$382.68
Kansas$862.93$267.91$263.33$299.18
Kentucky$938.51$141.39$267.91$358.24
Louisiana$1,405.36$215.17$414.36$529.21
Maine$703.82$104.98$259.98$775.83
Maryland$1,116.45$152.72$353.99$338.87
Massachusetts$1,129.29$134.96$388.28$609.74
Michigan$1,364.00$154.85$413.83$606.04
Minnesota$875.49$184.27$234.40$795.32
Mississippi$994.05$210.33$323.22$456.82
Missouri$872.43$181.27$275.28$460.50
Montana$863.52$211.91$265.32$415.88
Nebraska$831.02$229.25$237.13$386.29
Nevada$1,103.05$117.63$303.86$364.64
New Hampshire$818.75$110.77$307.42$681.56
New Jersey$1,382.79$131.35$381.86$400.56
New Mexico$937.59$172.57$276.98$869.57
New York$1,360.66$171.12$385.02$488.03
North Carolina$789.09$136.08$293.59$804.51
North Dakota$773.30$231.04$244.09$359.42
Ohio$788.56$121.61$269.84$298.18
Oklahoma$1,005.32$225.84$318.47$397.11
Oregon$904.83$93.87$226.83$461.01
Pennsylvania$970.51$144.21$327.24$584.13
Rhode Island$1,303.50$132.19$411.51$499.06
South Carolina$973.10$180.94$265.07$759.80
South Dakota$766.91$258.11$208.58$527.09
Tennessee$871.43$148.45$309.07$413.91
Texas$1,109.66$206.42$374.49$528.75
Utah$872.93$109.50$265.90$497.53
Vermont$764.02$125.48$295.42$343.12
Virginia$842.67$136.54$280.52$425.61
Washington$968.80$106.38$265.74$596.67
West Virginia$1,025.78$204.28$329.67$491.83
Wisconsin$737.18$136.81$226.00$374.37
Wyoming$847.44$247.57$278.83$321.04
Countrywide$1,009.38$148.04$322.61$538.73
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The amount for coverage you’ll pay as a new driver will likely be higher than what is listed in the table above. However, it gives you a good idea of what to expect.

The most important factor when looking to lower car insurance rates is that you always try to maintain a clean driving record. Insurance premiums increase dramatically for new drivers, even for minor traffic infractions.

When you first get your license, it is easy to get excited behind the wheel of a car and drive too fast or turn your attention away from the road for a second, but these can be very costly mistakes.

The majority of car accidents happen when people get too relaxed behind the wheel. This feeling of overconfidence is what causes first-time drivers like young, 16-year-old-drivers, to speed, take risks, make sudden movements on the freeway, and drink and drive.

Did you know your vehicle make and model can impact your car insurance rates? This is why many student drivers and first-timers research insurance quotes for the make and model car of their choice well in advance.

Basic economy sedans that are affordable to fix and maintain and have high safety ratings are much cheaper to insure than sports cars or expensive luxury SUVs. If you’re a new driver, be sure you choose your car carefully. The more expensive the car you drive, the higher the insurance premiums will be.

Your age and credit history also impact what you pay for car insurance. Companies typically view younger drivers and those with bad credit as risk-takers, which directly leads to higher premiums. This is why it can be hard to find cheap car insurance for new drivers under 21. In fact, it can sometimes be hard to find cheap car insurance for first-time drivers over 25 as well.

However, there are many ways to find cheap car insurance for new drivers under 21. Choosing the right coverage level and seeking out discounts is a great place to start.

If you’re a new teen driver, buying a car insurance policy independently can cost an arm and a leg. No wonder many young drivers under the age of 25 choose to join their parents’ car insurance policy as a named driver, instead of seeking out a new policy under their own name.

However, cheap insurance for first-time drivers is not impossible. There are also companies that specialize in first-time driver policies. Plus, larger insurance providers may also be willing to work with you if you are added to your parents’ car insurance policy.

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What are the Car Insurance Basics for First-Time Drivers?

Everybody should learn about basic car insurance policies before purchasing a quote. After all, it will benefit you to know exactly what you are buying and if you really need it before you sign your name on any dotted lines.

If you do not have at least a general idea of how coverage options work, you might mistakenly assume you have the protection you need for a loss.

The last thing that you want is the false assurance that you’re paying for certain protections when all you have is a basic liability plan.

A basic liability plan is made up of bodily injury and property damage coverage. But there are other types of insurance options that will protect you, your family, and even your car and property in different ways. Let’s go over the most common policies now.

Bodily injury liability, or BIL, is required in virtually all states. It is one of the two types of third-party coverage that is required by law. BIL will pay for the expenses that arise when someone is injured or when someone is deceased because of a car accident that you are responsible for.

Property damage liability, or PDL, is the second form of third-party coverage that is required by most state officials. This form of liability coverage pays to repair or even to replace the property that was damaged in a collision you caused.

The property may not be owned by you or anyone in your household. The limit that you select applies to all unowned property damaged in a single incident.

Medical payment, or MedPay, is sometimes required in states that operate under a no-fault system. MedPay is available to drivers in states with tort law as a form of optional protection that will pay for excess or immediate medical bills.

Personal injury protection, or PIP, is like MedPay but is a bit more comprehensive and will pay for medical treatment, hospitalization, lost wages, rehabilitation costs, and maybe even disability for a short period of time.

Collision coverage also pays for your vehicle repairs but will pay when you collide with an object. The most common claims are for collisions with other vehicles. You must pay your deductible before the claims payout is made.

Comprehensive coverage will pay for physical damage to your covered vehicle that is a result of different losses that do not involve a collision. Some of the causes that are covered include fire, theft, vandalism, weather damage, or damage caused by animals.

The policy will only pay up to the cost of the market value and will subtract the deductible from the loss payout.

Uninsured motorist protection, or UM, can help pay for damages caused by another driver who does not have any liability insurance. Having uninsured or underinsured motorist protection can help pay for your medical bills as if the party had bodily injury coverage.

If you select uninsured motorist property damage protection, this can help you pay for your car repairs or damages to personal property left in your vehicle at the time of the accident.

While it takes a little extra time to compare insurance quotes, discounts, and coverage options, it is worth taking that time to find the best coverage and lowest rates available. Money is often tight for first-time drivers, but don’t let insurance costs scare you away from realizing the freedom that comes with having your driver’s license and your very own vehicle.

What are the Car Insurance Requirements for First Time-Drivers?

Driving is exhilarating. The world opens up with possibilities when you can drive, but it also comes with lots of responsibilities. Those responsibilities are not just for your own vehicle, but for other drivers, passengers, pedestrians, and the laws of your state.

If you are looking for car insurance for first-time drivers, then you have come to the right place. Buying car insurance is just a matter of shopping around, choosing a policy that fits your needs, and carefully coming to a contractual agreement.

Almost every U.S. state requires some form of liability coverage to legally drive on the roads. Liability coverage pays for damages to the other drivers for accidents that you cause. Commonly, proof of insurance is required before you are legally permitted to own a driver’s license.

Do you know the car insurance requirements in your state? Find more details in the table below.

Legal Minimum Car Insurance Requirements by State
StateMinimum BI & PD Liability LimitsRequired Insurance Policies
Alabama25/50/25BI + PD Liability
Alaska50/100/25BI + PD Liability
Arizona15/30/10BI + PD Liability
Arkansas25/50/25BI + PD Liability, PIP
California15/30/5BI + PD Liability
Colorado25/50/15BI + PD Liability
Connecticut25/50/20BI + PD Liability, UM, UIM
Delaware25/50/10BI + PD Liability, PIP
District of Columbia25/50/10BI + PD Liability, UM
Florida10/20/10BI + PD Liability, PIP
Georgia25/50/25BI + PD Liability
Hawaii20/40/10BI + PD Liability, PIP
Idaho25/50/15BI + PD Liability
Illinois25/50/20BI + PD Liability, UM, UIM
Indiana25/50/25BI + PD Liability
Iowa20/40/15BI + PD Liability
Kansas25/50/25BI + PD Liability, PIP
Kentucky25/50/25BI + PD Liability, PIP, UM, UIM
Louisiana15/30/25BI + PD Liability
Maine50/100/25BI + PD Liability, UM, UIM, Medpay
Maryland30/60/15BI + PD Liability, PIP, UM, UIM
Massachusetts20/40/5BI + PD Liability, PIP
Michigan20/40/10BI + PD Liability, PIP
Minnesota30/60/10BI + PD Liability, PIP, UM, UIM
Mississippi25/50/25BI + PD Liability
Missouri25/50/25BI + PD Liability, UM
Montana25/50/20BI + PD Liability
Nebraska25/50/25BI + PD Liability, UM, UIM
Nevada25/50/20BI + PD Liability
New Hampshire25/50/25Financial Responsibility only
New Jersey15/30/5BI + PD Liability, PIP, UM, UIM
New Mexico25/50/10BI + PD Liability
New York25/50/10BI + PD Liability, PIP, UM, UIM
North Carolina30/60/25BI + PD Liability, UM, UIM
North Dakota25/50/25BI + PD Liability, PIP, UM, UIM
Ohio25/50/25BI + PD Liability
Oklahoma25/50/25BI + PD Liability
Oregon25/50/20BI + PD Liability, PIP, UM, UIM
Pennsylvania15/30/5BI + PD Liability, PIP
Rhode Island25/50/25BI + PD Liability
South Carolina25/50/25BI + PD Liability, UM, UIM
South Dakota25/50/25BI + PD Liability, UM, UIM
Tennessee25/50/15BI + PD Liability
Texas30/60/25BI + PD Liability, PIP
Utah25/65/15BI + PD Liability, PIP
Vermont25/50/10BI & PD Liab, UM, UIM
Virginia25/50/20BI + PD Liability, UM, UIM
Washington25/50/10BI + PD Liability
West Virginia25/50/25BI + PD Liability, UM, UIM
Wisconsin25/50/10BI + PD Liability, UM, Medpay
Wyoming25/50/20BI + PD Liability
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Be sure to price higher limits of liability to protect your financial future. Most agents suggest at least $300,000 per accident in bodily injury liability coverage and $100,000 in property damage.

Your state law may not require physical damage coverage, but the titleholder of your car might. If you do not hold title to your car, a lender or lessor has an interest in the car. Check your contract to see if physical damage is required. Also, check to see if there is a maximum deductible that you can choose before you buy a high-deductible plan.

Keep reading to learn the difference between basic car insurance coverage, like collision, comprehensive, and uninsured or underinsured motorist policies. Then you’ll be able to confidently choose the coverage options that you really do need.

Do first-time drivers need full coverage insurance?

As you’ve learned, there are several different types of coverage offered by all of the leading insurers. What is required will depend upon the state that you live in. Now that you’ve taken the time to learn about the state requirements and other additional policy offerings, you are ready to determine the right coverage level for your needs.

If budget is your primary concern as a first-time driver, a basic liability-only policy might work well for you. Especially if you drive an older, used car that you can easily replace in the event of an accident. This is also useful for new drivers who are having difficulty finding insurance that you can afford on your income.

However, if you drive a new vehicle or lease or finance your car, you might need to purchase a full coverage policy, which will include the collision and comprehensive coverages previously mentioned. You may want to consider having a higher deductible in exchange for a lower premium.

Usually, car dealerships and banks insist upon full coverage car insurance when you lease or finance a vehicle, regardless of your state’s minimum requirements. Depending on your circumstances, you may have to purchase a full coverage policy. Otherwise, buying a cheaper and older model car for cash will allow you to drop the extra coverage.

If you live in a state with a high rate of uninsured motorists, opting in for uninsured or underinsured motorist protection might be the right choice. According to the Insurance Information Institute, as many as one in eight drivers are uninsured. That means around 13 percent of drivers in the nation are uninsured motorists. These drivers put you and your family at risk because they do not have the coverage that will help pay for any damages if an accident occurs.

Ultimately, the type of coverage you purchase is entirely up to you. You’re now armed with the knowledge you need to build your perfect policy for the right price.

Are There Any Car Insurance Discounts for First-Time Drivers?

There are many discounts available for first-time drivers. Frequently, there are discounts that are not openly advertised, so never be afraid to ask an insurance agent about what is available to you.

Teenage drivers should examine the difference in rates between having their own insurance and being added to their parents’ policy. For most teens, paying your parents for the additional amount it costs to add you to their policy as a named driver will be more affordable than buying a policy on your own.

If this is not an option for you, start by asking yourself if the car make and model you drive is helping or hurting your car insurance rates. The Insurance Institute for Highway Safety analyses the insurance loss probability of most car makes and models on the market. Make sure you are driving a car in a lower insurance cost group.

This will go a long way in finding the best car insurance for new drivers under 25. See what discounts your vehicle can earn you. Adding an anti-theft device to your car or other safety features can lower insurance costs.

If you are a student between the ages of 16-24 and you receive good grades, you may want to look into a good student discount. Good students are viewed as being more responsible and less of a liability by insurance companies. You can find cheap young drivers car insurance.

You can also receive a low mileage discount if you work from home or do not use your vehicle very often. Perhaps you can carpool to work or school? Drive less and take the bus or the train whenever possible to qualify.

Car insurance companies are very competitive and aware of the business that comes from online access. Shop around until you find a company that you can work with.

Ask for further discounts that may not be offered unless you speak to a representative. Google the insurance company you are considering and look for customer reviews.

Yes, you have a long road ahead of you, and many more miles to drive before you retire from the big race of life. Don’t get discouraged if rates seem high for the time being.

After a few years of careful driving behind you, you will start to see an improvement in the way the insurance company views your profile. It’s all about decreasing risk and improving as a driver.

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How can first-time drivers compare car insurance rates?

So, what is the cheapest car insurance for first-time drivers? As you’ve learned, every new driver needs to comparison shop to know for sure. In the world of car insurance, shopping around and comparing rates is a rule that should never be broken.

Whether you decide to shop online for cheap car insurance for first-time drivers, or still prefer to call or visit the best car insurance companies directly, examining multiple plans will save you money in the long run.

Look at plans designed specifically for first-time drivers. These often offer several features to help protect new drivers in the event of an accident.

For example, you may opt for increased liability coverage. Frequently the 100/300/100 formula for liability coverage is recommended for first-time drivers; this means $100,000 bodily injury coverage, $300,000 coverage for injuries of all parties involved in an accident, and $100,000 damage coverage.

Some new drivers also purchase medical payments coverage, which covers any medical expenses for all parties involved in the accident. And as we discussed, adding uninsured or underinsured motorist coverage will help pay for your damage and injuries in the event an accident is caused by an uninsured or underinsured individual.

Now that you know the basics, you can comfortably shop for insurance. Gather your license information, your vehicle information, and get started. If you are in the search of competitively priced plans, remember that you can compare pricing on the internet.

Looking for affordable first-time driver insurance? Start comparing first-time driver car insurance rates now by entering your ZIP code into our free quote tools.

Frequently Asked Questions: Cheap Car Insurance for First-Time Drivers

You are now an expert on finding cheaper car insurance for first-time drivers. Refer back to this guide as much as needed while you comparison shop for your most affordable rates.

In the meantime, check out our frequently asked questions below.

#1 – How do you get car insurance for the first time?

To get car insurance for the first time as a new driver, put in the research and determine what level of coverage is right for you. Compare quotes from multiple companies. Select the policy that offers you the right amount of coverage for the best price.

#2 – Can you get a car insurance discount by paying for your policy in full?

Sometimes, paying annual premiums in one lump sum upfront will lower your costs. When you opt to make payments monthly, insurance companies charge interest, often at a rate of 20 percent on the unpaid balance.

Why wait? Get the lowest car insurance rates for first-time drivers right now by entering your five-digit ZIP code into our FREE quote tool below.