In this guide
Drivers under 25 usually pay more for car insurance because insurers see young drivers as higher risk, and the data backs that up. Rates generally ease as you gain experience and keep a clean record. In the meantime, you can compare your options: staying on a family policy, buying your own, choosing a modest car, and asking about discounts and safe-driving programs.
Key takeaways
- Many insurers treat drivers under 25 as higher risk, so premiums tend to be higher.
- Rates generally fall with age, experience and a clean driving record.
- Staying on a parent's or family policy may cost less than a separate policy, if you qualify.
- The car, where you live, your record and your coverage choices can all matter as much as age.
- Discounts, telematics programs and comparing several insurers are the main levers you control.
Why age 25 is a pricing milestone
Age is one of several rating factors insurers use, and young drivers are at the more expensive end. The Utah Insurance Department says many insurers treat drivers under 25 as higher risk, and the Insurance Information Institute (Triple-I) says teen coverage is expensive but rates generally fall as drivers get older with a clean record.
Crash research explains why. The Centers for Disease Control and Prevention (CDC) reports that drivers 16 to 19 have the highest crash risk of any age group, and the Insurance Institute for Highway Safety (IIHS) says their fatal crash rate per mile is about three times that of drivers 20 and older. The risk drops as drivers gain experience, which is why many insurers re-rate young adults through their early 20s.
Age 25 isn't a hard line at every company, and rates don't drop overnight. Some insurers adjust gradually each year. See how insurers calculate your rate for the full list of factors.
Policy options for young adults
Where you buy coverage can change the price. These are the usual paths:
| Option | Who it may suit | Things to check |
|---|---|---|
| Stay on a parent's policy | Young adults who live at home or are still financially tied to the household | Insurer rules on who can be listed; shared claims history; limits that may be higher than you'd buy alone |
| Your own policy | Those living independently with their own car | Higher base price; building your own record; limits you can afford |
| Added to a spouse or partner's policy | Married couples, and in some cases domestic partners | Insurer definitions of household; effect of the other driver's record |
| Non-owner coverage | People who drive borrowed cars but don't own one | Liability only, with limits. See non-owner car insurance |
Triple-I says it generally costs less to add a teen to a parent's policy than for the teen to buy one alone. That can also hold for young adults, but it depends on the insurer and who lives in the household. Be honest about where the car is kept and who drives it. Listing the wrong driver or address can cause problems with claims.
Factors you can influence
Age isn't the only thing that sets your price, and some of the rest is within your control.
- The car. Sports cars, high-value cars and models with costly repairs usually cost more to insure. The Utah Insurance Department notes that a modestly priced economy car with liability coverage may cost less than an expensive sports car.
- Your record. Tickets and at-fault accidents hurt more when you have little history. Read how tickets affect car insurance.
- Where you live. Rates vary by ZIP code and state. If you move, check insurance when moving states.
- Credit-based insurance scores. Many states let insurers use them, and some restrict it. See how credit affects car insurance.
- Coverage and deductibles. A higher deductible can lower your premium, but only choose one you could pay after a claim.
- Mileage. Driving less may help. See pay-per-mile car insurance if you rarely drive.
Discounts to ask about
Common discounts for young drivers include:
- Good student. Usually for students under 25 with a B average or similar. Requirements vary.
- Driver training or defensive driving courses. Check whether your insurer recognizes the course before paying for it.
- Multi-policy and multi-car. Combining policies, such as auto with renters insurance, can unlock a discount.
- Telematics programs. A phone app or plug-in device scores your driving. Good scores may lower your rate, and poor ones may not help at some insurers. Read our guide to usage-based insurance pros and cons before opting in.
- Paid-in-full or autopay. See whether to pay monthly or in full.
Discounts rarely stack without limits, and availability varies by state. For a longer list, use our discount checklist.
Don't cut liability too far to cut costs
It can be tempting to buy the state minimum to lower the price. Minimums are often low, and a serious crash can lead to claims above the limits, which you'd owe personally. Triple-I suggests considering higher liability limits than the minimum. If your budget is tight, raising your deductible and putting the savings toward better liability limits is one option Triple-I mentions. Read how much liability insurance you may need.
Tip: If you finance or lease a car, the lender will require collision and comprehensive. Check that before you pick a car, since the required coverage can add to your monthly cost. See car insurance for leased and financed cars.
How to shop as a young driver
- Gather details. Have your license number, the car's VIN, your address and your driving history ready.
- Pick the coverage first. Decide on limits, deductibles and extras so every quote is for the same thing.
- Get quotes from several insurers. Companies weigh age differently, so prices can differ a lot between them.
- Ask about every discount and what proof is needed.
- Re-shop at renewal and on birthdays. As you get older and your record improves, a better rate may become available.
If you are brand new to driving at any age, our guide to car insurance for new drivers covers what first-time policyholders face. If you're a student, see car insurance for college students.
Frequently asked questions
At what age does car insurance get cheaper?
There's no single age. Rates generally decline through the early 20s with a clean record, and many insurers treat drivers 25 and older as lower risk. Your exact change depends on your insurer, state and history.
Can I stay on my parents' insurance at 22 or 24?
Often yes, if you still live in their household or meet the insurer's rules, such as being a full-time student with a permanent address there. Rules differ by insurer, so ask directly.
Does being a student lower my premium?
It may. Good student and away-at-school discounts are common, but they require proof and have conditions that differ between insurers.
Is liability-only enough for a young driver?
It can meet legal requirements if limits meet your state minimum, but it doesn't cover your own car, and minimum limits may be low. Consider your car's value, any loan and how much you could afford to pay out of pocket.
Will a telematics program raise my rate?
Policies differ. Some programs only offer discounts, and others can adjust your rate based on driving data. Read the terms before you enroll.
Sources
- Utah Insurance Department – Protect Yourself: Insuring Your Teen Driver
- Insurance Information Institute – Auto insurance for teen drivers
- CDC – Teen Drivers: Risk Factors
- IIHS – Teenagers
- Insurance Information Institute – Nine ways to lower your auto insurance costs
General information only. This guide explains general concepts and is not insurance, legal or financial advice. Rules and prices vary by state and insurer. Check your policy documents and speak to a licensed insurance professional or your state insurance department about your situation.