How much is car insurance for a 20-year-old?

How much is car insurance for a 20-year-old? The average cost is around $5,000–$6,000 per year. While young driver car insurance is more expensive in general, the exact cost depends on the type of car, the driver’s record, and whether the driver’s insurance company offers any discounts to young drivers. Car insurance also tends to be more expensive for young male drivers than for young female drivers.

Whether you’re a young driver yourself or are looking for insurance for one, you can save money by insuring a safe car that’s relatively inexpensive, comparing multiple insurance companies, and asking each insurance company you contact about the discounts they have available.

With this guide, we’ll take a look at what makes car insurance more expensive for young drivers, how young drivers can save on insurance, and what age the cost of car insurance tends to decrease for a driver.

How much does car insurance for a 20-year-old cost?

The average cost of car insurance for a 20-year-old is between $5,000 and $6,000 annually depending on factors like the gender of the driver and the type of car they drive. That said, many car insurance companies — including Geico, USAA, and Erie Insurance — offer insurance policies that cost a typical 20-year-old driver less than $4,000 per year.

While car insurance for a 20-year-old is expensive, it still drops by a sizeable amount compared to the cost for teen drivers. For instance, car insurance for an 18-year-old is about $600 per month, or $7,200 annually. 

Here are some of the factors that affect the overall cost of car insurance for a 20-year-old driver:

• Vehicle safety: Vehicles with higher safety ratings tend to be cheaper to insure.
• Vehicle age: Since older and used vehicles are generally less expensive to repair or replace, insurance companies charge less to insure them.
• Type of vehicle: Minivans and sedans tend to be less expensive to insure than trucks or sports cars. Luxury cars and sports cars are often particularly expensive to insure for young drivers. Likewise, vehicles that are more likely to be stolen are more expensive to insure.
• Vehicle safety and convenience features: Convenience and safety features added to a car increase its actual value as well as car insurance rates. The exception to this is anti-theft features, which many insurance companies encourage with discounts.
• Driver gender: For younger drivers (under 30) in particular, insurance costs for male drivers tend to be higher than costs for female drivers. For older drivers, there isn’t much of a difference between insurance costs by gender.

Why is insurance more expensive for younger drivers?

There are a few reasons why insurance tends to be more expensive for younger drivers. While the primary reason is that research shows young drivers are more likely to be involved in an accident due to their inexperience on the road, this is not the only reason why insurance companies view young drivers as higher risks.

Here are the main reasons why insurance is usually more expensive for younger drivers:

• Young drivers have less experience: Simply put, young drivers don’t have the experience on the road that helps them make the best decisions in unexpected situations. For instance, if they’ve only been driving for a few years they may not know how to handle hydroplaning or driving on icy roads.
• Young drivers are more likely to engage in reckless behavior: Statistically speaking, a young driver is more likely to behave recklessly on the road (speeding, tailgating, etc.).
• Young drivers are more likely to be distracted on the road: The average young driver is also more likely to be distracted by a smartphone or other device while driving than an older driver.
• Young drivers are hard to evaluate based on their driving history: Since many young drivers have only had a license for a few years at most, insurance companies tend to err on the side of caution and give them rates similar to those for drivers with a poor driving record.

How can a 20-year-old save on car insurance?

While car insurance for a 20-year-old is more expensive than for most older drivers, there are some options drivers have to bridge the gap. From the car you drive to the insurance deductible you choose, here are some options that a 20-year-old has to save on car insurance:

• Drive an affordable used car: The less expensive a vehicle is, the cheaper it will be to insure. Driving an older used car can greatly lower your insurance rates. Sports cars, luxury vehicles, and hybrids also tend to be more expensive to insure, so consider avoiding those when looking for a used car.
• Ask your insurance company about discounts: Many insurance companies offer discounts based on academic performance, safe driving habits, and other factors that may apply to you. It’s always a good idea to check with your insurance company to see if you qualify for any discount programs.
• Choose a higher deductible: With a higher deductible, you’ll pay a lower monthly rate. If you can afford to pay for minor repairs out of pocket, consider choosing a higher deductible for both comprehensive and collision coverage.

According to the Insurance Information Institute, maintaining a good credit record can help reduce the cost of insurance.

Does the cost of car insurance go down for people over 25?

Yes, the cost of car insurance tends to decrease around the time drivers reach the age of 25. Progressive, for example, claims that car insurance rates drop by about 9% at age 25 and then continue to decrease steadily until they stabilize at around age 34.

Car insurance tends to be cheaper for older drivers because most of the concerns insurance companies have about young drivers are resolved by the time a typical driver is in their 30s. At this age, drivers are less likely to behave recklessly or be distracted on the road (which isn’t to say that this is always the case). Likewise, older drivers are usually more experienced and have a more established driving record that helps insurance companies predict the likelihood of future accidents with more confidence.

What to Remember About Car Insurance for a 20-Year-Old

• Most car insurance costs 20-year-old drivers over $5,000 each year. That said, many insurance companies — including Geico, USAA, and Erie Insurance — offer young adults the best insurance policies for less than $4,000 annually.
• Since a typical 20-year-old driver is less experienced than an older driver and statistically more likely to be distracted or reckless on the road, insurance companies usually give them higher rates.
• Young drivers can save on car insurance by driving a used car with a high safety rating, looking for discounts from their insurance company, and choosing a plan with a relatively high deductible.