Best Cheap Car Insurance for Teens for 2020

Fact-checked with HomeInsurance.com

The average cost to add a teenager to a parent’s policy last year was $278 per month, and an even steeper $438 monthly hit to secure his or her own standalone insurance, according to QuoteWizard. Car insurance for teens isn’t cheap, and premiums often can be more than the monthly lease or loan payment for the car they’re driving.

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Teens are more expensive to insure because they pose a big risk to auto insurers. Not only do drivers between the ages of 16 and 19 have less experience behind the wheel, they’re also nearly three times more likely to be involved in a fatal crash than other drivers, are more likely to speed, and have the lowest rate of seatbelt use of all age groups, according to the Centers for Disease Control and Prevention. Due to these reasons, teens get charged more for car insurance. A lot more.

But there are many ways that teens can save money on insurance. For example, joining a parent’s existing policy will be much cheaper. Teens can also demonstrate responsibility and low risk by getting consistently good grades, completing driver education courses, and using safe driving practices, leading to better rates.

Of course, price isn’t everything; you don’t want your teen to hit the road with a skimpy insurance policy. Check out our top picks below for the best policies for teens for the price.

The 5 best cheap car insurance for teens

Insurance Company J.D. Power AM Best Standard & Poor’s SimpleScore
Geico 3/5 A++ AA+ 4/5
Nationwide 3/5 A+ AA+ 4.5/5
State Farm 3/5 A AA 4.4/5
Progressive 3/5 A+ AA 4.2/5
Erie 3/5 A+ N/A 4/5

Best overall

Geico

Geico is known for offering affordable car insurance policies, especially for young drivers.

J.D. Power
3/5
AM Best
A++
Standard & Poor's
AA+
SimpleScore
4 / 5.0
close
SimpleScore
Geico
4
  • Affordability
    4
  • Coverage Options
    4
  • Customer Satisfaction
    3
  • Support
    4
  • Accessibility
    5
Geico is the best car insurance company for young drivers who are on a budget. The company offers some of the lowest rates and several discounts that are available to teens. When your teen becomes an adult and is ready for their own policy, they can benefit from the Family Pricing Program, which will lower their first individual policy.
Full review

Our Two Cents — Teens who are strapped for cash will benefit from an affordable car insurance policy from Geico.

Best policies

Nationwide

Nationwide offers comprehensive coverage that can give teen drivers peace of mind on the road.

J.D. Power
3/5
AM Best
A+
Standard & Poor's
A+
SimpleScore
4.5 / 5.0
close
SimpleScore
Nationwide
4.5
  • Affordability
    4
  • Coverage Options
    5
  • Customer Satisfaction
    3
  • Support
    5
  • Accessibility
    4
Nationwide offers a number of coverages that can be beneficial for a teen driver, like roadside assistance and accident forgiveness. Additionally, the SmartRide program will let you install a device in your teen’s car to monitor for safe driving habits, encouraging your teen to stay safe and potentially reduce your insurance rate.
Full review

Our Two Cents — In the early days of driving, many teens can benefit from accident forgiveness, which is offered by Nationwide.

Best customer service

State Farm

State Farm stands out for its exceptional customer service, which can be hard to find in the insurance industry.

J.D. Power
3/5
AM Best
A+
Standard & Poor's
AA
SimpleScore
4.4 / 5.0
close
SimpleScore
State Farm
4.4
  • Affordability
    4
  • Coverage Options
    5
  • Customer Satisfaction
    3
  • Support
    5
  • Accessibility
    5
State Farm offers great customer service and claims handling, although not always at the lowest price. But don’t worry, there are still plenty of discounts for teens to choose from, including a highly reduced rate if your teen goes away to school for most of the year. If your teen is a safe driver, they can enroll in the Steer Clear® program to save money.
Full review

Our Two Cents — Getting car insurance as a young driver can be confusing, but with a State Farm policy, you can work with helpful agents or use online support tools to make the process easier.

Best for careful drivers

Progressive

For teens who prioritize safe driving behaviors, getting a policy from Progressive could mean big savings.

J.D. Power
3/5
AM Best
A+
Standard & Poor's
AA
SimpleScore
4.2 / 5.0
close
SimpleScore
Progressive
4.2
  • Affordability
    4
  • Coverage Options
    5
  • Customer Satisfaction
    3
  • Support
    5
  • Accessibility
    4
Progressive is a great car insurance company for teen drivers who practice safe driving habits. Like Nationwide, Progressive also offers a safe driving device called Snapshot, which has an average discount of $145. The provider also offers GAP insurance, which is nice to have for teens who are driving a newer car that hasn’t been paid off.
Full review

Our Two Cents — Progressive is our top pick for young drivers who practice safe driving habits, with and without their parents in the car.

Best for new drivers

Erie Insurance

Erie is a good car insurance provider for new drivers because they offer a specific ‘young drivers’ discount.

J.D. Power
3/5
AM Best
A+
Standard & Poor's
AA
SimpleScore
4 / 5.0
close
SimpleScore
Erie Insurance
4
  • Affordability
    3
  • Coverage Options
    5
  • Customer Satisfaction
    3
  • Support
    5
  • Accessibility
    4
We recommend Erie for any young driver who is looking for insurance for the first time. The company offers a specific discount for young drivers under 21 who live with their parents. Erie also offers many coverage options that are ideal for teen drivers, like first accident forgiveness and a rate lock guarantee.
Full review

Our Two Cents — New drivers who are freshly licensed can benefit from Erie’s young driver discount and robust coverage options.

How much does it teen car insurance cost?

The average cost of car insurance in the U.S. is $1004, according to the Insurance Information Institute. However, car insurance for teens and young drivers is usually much higher than average. In fact, teen car insurance premiums often can be more than the monthly lease or loan payment for the car they’re driving.

Teens are more expensive to insure because they pose a big risk to auto insurers. Not only do drivers between the ages of 16 and 19 have less experience behind the wheel, they’re also nearly three times more likely to be involved in a fatal crash than other drivers. Teens are also more likely to speed, and have the lowest rate of seatbelt use of all age groups, according to the Centers for Disease Control and Prevention. Due to these reasons, teens get charged more for car insurance — a lot more.

But there are many ways that teens can save money on insurance. For example, joining a parent’s existing policy will be much cheaper. Teens can also demonstrate responsibility and low risk by getting consistently good grades, completing driver education courses, and using safe driving practices, leading to better rates.
Of course, price isn’t everything; you don’t want your teen to hit the road with a skimpy insurance policy. Check out our top picks below for the best policies for teens for the price.

How much coverage does a teen need?

Before a teen purchases car insurance, they’ll need to determine how much coverage they need. Every state has a minimum required amount of insurance that all drivers must carry, but there are optional coverages that can also be beneficial. Here are the types of coverages that teens should consider:

  • Liability: Liability is one of the most important coverages for a teen driver. Liability coverage pays for a teen’s legal fees if they hit another driver or cause property damage and they get sued.
  • Collision: Collision coverage pays for damages to a vehicle after a crash. If your teen is nervous about getting into an accident, this is a good coverage to get.
  • Comprehensive: Comprehensive coverage pays for vehicle damages from any event other than an accident. If you live in an area that is prone to extreme weather or animal crossings, consider adding this coverage.
  • Uninsured/underinsured motorist coverage: this type of coverage protects a driver if they get into an accident with someone who isn’t insured or doesn’t have enough insurance to cover their losses. This coverage also applies to hit-and-run situations.
  • Medical payments: Medical payments coverage will pay for a driver’s injuries or their passengers injuries after an accident, so this is an important coverage to have.
  • Accident forgiveness: Accident forgiveness is always an optional coverage, but if your provider offers it, it can be a lifesaver for a young driver.

Joining your parent’s policy

A great way to save money on a teen’s car insurance policy is by adding him or her to an existing parent’s policy. While this will be less expensive overall than buying a separate policy, you should still anticipate a significant rate increase. According to Insure.com, adding a teen driver to an insurance policy will on average lead to a 161% increase in rate. This varies by state; In Hawaii, the increase is only 3% on average, while it’s 223% in New Jersey.

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Factors that affect premiums

Insurance companies weigh many factors when determining auto insurance premiums, including:

  • Age: Younger drivers have less experience behind the wheel and are statistically more likely to get into accidents, which increases their risk to insurers.
  • Driving record: Teens don’t have much of a driving record to speak of, which makes it difficult for insurance companies to predict how safely they will drive, so they charge more to hedge against that risk.
  • Credit score: Creditworthiness is used as a measure of responsibility and has been correlated with how likely a driver is to file a claim. Teens are again at a disadvantage here because they have little or no credit history they can use to demonstrate how responsible they are.
  • Where you live: If you live in an area where there’s a high risk of car theft, for example, you can expect to see higher rates. Cities, in general, have higher auto insurance premiums than rural areas. Rates are also dependent on what coverages are required by your state.
  • Your vehicle: Vehicles with high safety ratings and safety equipment like anti-lock brakes or an anti-theft device can earn you lower auto insurance rates.
  • Your gender: Statistics have shown that women are less likely to get into an accident than men, so they’re usually quoted lower rates, especially during their teenage years. Sorry guys!
  • Marital status and education level: Being married and having a college degree both decrease auto insurance rates because of a lower perceived risk. Unfortunately, this is also going to work against most teens.
  • Your level of coverage: If you purchase higher coverage limits or optional coverages like accident forgiveness or rental car reimbursement, you can expect to pay more than someone choosing the state minimum.

Car insurance discounts for teens

If you’re shocked by the amount your car insurance rate goes up after adding a teen driver, know that there are a few other ways to save money. Here are a few ideas:

  • Good student discounts: If your student gets good grades, your car insurance provider may be willing to offer them a lower rate in exchange for their demonstration of responsibility. For example, Geico offers discounts to students with an average grade of B or better.
  • Student away discounts: Does your teen spend most of the year away at school? If so, let your insurance provider know. Many companies will slash your rates during the time that your teen isn’t actively driving.
  • Low-mileage discounts: Almost anyone can qualify for a low-mileage discount, but teens are usually a better fit for this type of discount since they don’t drive as far as most adults. If your teen is only driving to school and back, ask your insurance provider for a discount.
  • Safe driving discounts: Technology is overhauling the car insurance industry. Many providers offer smartphone apps or devices that will monitor your teen’s driving habits. Not only will this encourage your teen to be safer on the road and potentially reduce their risk of an accident, your provider might also discount their insurance rate.

Teen car insurance FAQ

Why are teens expensive to insure?

Teen drivers are more expensive to insure because they are more likely to be involved in accidents. According to the CDC, teen drivers get involved in three times the number of fatal crashes as older drivers.

Why is it more expensive to add a teen boy than a teen girl?

Teen boys are typically more expensive to insure than teen girls because insurers have determined that they are statistically riskier when it comes to safe driving and accidents.

What car insurance discounts are offered to teen drivers?

Many discounts are available to teen drivers, including good student discounts, student away discounts, low-mileage discounts, and safe driving discounts.

Can a teenager get their own car insurance policy?

Teenagers can get their own insurance policy, but it’s less expensive to add them to a parent’s policy.

Too long, didn’t read?

Insuring a new driver is a big risk, which is why it can be expensive for a teen driver to get car insurance. Fortunately, there are plenty of discounts available, as well as adding a teen driver to a parent’s auto insurance policy, to mitigate the cost of car insurance.

Keep reading

Methodology

The SimpleScore is our proprietary scoring metric to compare products and services at The Simple Dollar in a transparent, evidence-based way. Our editorial team identifies five quantifiable aspects to compare for every brand, determines the rating criteria for each aspect score, then averages the five aspect scores to produce a single SimpleScore. For auto insurance carriers, we compared discounts, additional coverage, customer satisfaction, support and accessibility for every major carrier. Our ratings are meant to be a directional tool to help you in the process of choosing an auto insuance provider. Be sure to continue your research and shop around for the best teen auto insurance provider that fits your specific needs.

We welcome your feedback on this article and would love to hear about your experience with the auto insurance companies we recommend. Contact us at inquiries@thesimpledollar.com with comments or questions.

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Elizabeth Rivelli
Elizabeth Rivelli
Contributing Writer

Elizabeth is a contributor to The Simple Dollar, where she reviews insurance providers and policies. She has more than three years of experience writing for top online insurance and finance publications, including Bankrate, Coverage.com and Reviews.com.

Reviewed by

  • Nashalie Addarich is an editor for The Simple Dollar. She recently made a career switch from the legal field, where she was an attorney in Washington, DC. In her free time, she enjoys learning new languages. You can also find her editorial work on Reviews.com.