Best Cheap Car Insurance for Teens for 2020

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.

    In this article

      The 5 best cheap car insurance for teens

      SimpleScore J.D. Power Rating AM Best Rating S&P Rating
      GEICO 4.2 3/5 A++ AA+
      Nationwide 4.2 3/5 A+ AA+
      State Farm 4.4 3/5 A++ AA
      Progressive 4.2 3/5 A+ AA
      Erie 4.2 2/5 A+ AA

      Best overall

      Best overall – GEICO

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

      J.D. Power Rating
      3/5
      AM Best Rating
      A++
      Standard & Poor’s
      AA+
      SimpleScore
      4.2 / 5.0
      close
      SimpleScore GEICO 4.2
      Discounts 4
      Coverage Options 4
      Customer Satisfaction 4
      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.

      Best policies – Nationwide

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

      J.D. Power Rating
      3/5
      AM Best Rating
      A+
      Standard & Poor’s
      AA+
      SimpleScore
      4.2 / 5.0
      close
      SimpleScore Nationwide 4.2
      Discounts 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.

      Best customer service – State Farm

      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.

      J.D. Power Rating
      3/5
      AM Best Rating
      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.

      Best for careful drivers – Progressive

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

      J.D. Power Rating
      3/5
      AM Best Rating
      A+
      Standard & Poor’s
      AA
      SimpleScore
      4.2 / 5.0
      close
      SimpleScore Progressive 4.2
      Discounts 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.

      Best for new drivers – Erie

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

      J.D. Power Rating
      2/5
      AM Best Rating
      A+
      Standard & Poor’s
      AA
      SimpleScore
      4.2 / 5.0
      close
      SimpleScore Erie 4.2
      Discounts 3
      Coverage Options 5
      Customer Satisfaction 4
      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.

      How much does 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.

      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.

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      Save money on auto coverage with our simple comparison tool.

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        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.

        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

        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.

        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.

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

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

        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.

        Methodology

        SimpleScore

        The SimpleScore makes it easy to compare products and services featured here on The Simple Dollar in a transparent, open and honest way. We rate these products and services using five factors and average them to calculate a single SimpleScore. For auto insurance, we compare:

        • Discounts
        • Coverage options
        • Support
        • Customer satisfaction
        • Accessibility

        You can read more about each factor and the details of each score in our auto insurance methodology. Use our ratings and editorial recommendations as you shop for the best auto insurance that fits your coverage needs.

        Car insurance rates: We used insurance rates from Quadrant Information Services. This includes analyzing thousands of rates from all 50 states that were publicly sourced from 2019 insurer filings. Rates are based on a 30-year-old male or female that had a clean driving record. Full Coverage premiums assumed a $500 collision and comprehensive deductible, and we looked at those who had both good and poor credit. These rates should be used to inform your car insurance shopping process, but your own quote may differ.

        Why do some brands have different SimpleScores on different pages?

        To ensure the SimpleScore is as helpful and accurate as possible, we developed unique criteria for every category we compare at The Simple Dollar. Since most brands offer a variety of financial solutions, their products and services will score differently depending on what we’re scoring on a given page.
        However, it’s also possible for the same product from the same brand to have multiple SimpleScores. For instance, if we compare State Farm’s home insurance according to our criteria for the best home insurance, it scores a 3.8 out of 5. But when we compare State Farm according to the criteria for the best auto insurance, it scores higher, since the features the company offers can vary by the type of insurance.

        Discounts

        We looked at the number of discounts each company offers — more discounts mean a higher score.

        Coverage Options

        We awarded higher scores to the companies that have the most coverage options.

        Support

        We awarded higher scores to lenders with the most channels for customer support.

        Customer Satisfaction

        We leveraged the J.D. Power 2019 Auto Insurance Satisfaction Study℠ to see how customers rated their experience with each company. (If a company wasn’t included in J.D. Power’s study, we skipped this aspect and averaged the four remaining aspect scores.)

        Accessibility

        We looked at the level of accessibility of each company –– the more resources they have the higher their score.

        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
          Nashalie Addarich
          Editor

          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.