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How Much Is Car Insurance for a 20-Year-Old?
According to our estimates, on average 20-year-old drivers pay between $2,700 and $3,700 per year for full-coverage car insurance on individual policies. Twenty-year-olds pay more for car insurance because of their relative inexperience behind the wheel. Families with 20-year-olds living at home will pay less if they have family insurance policies.
Factors That Affect the Cost of Car Insurance for 20-Year-Olds
The cost of car insurance for a 20-year-old driver is determined based on a variety of factors which can include gender, driving history, location and credit score.
Gender plays a major role in calculating your rates especially if you’re a teen or young adult. This is often because young men (such as 20-year-old male drivers) have significantly higher accident rates than female drivers, so they pay more for auto insurance coverage. However, some states don’t allow insurance companies to use gender for calculating your rates.
Best Car Insurance Companies for 20-Year-Olds
Our top picks for the best car insurance for 20-year-olds are State Farm, USAA, Geico, Erie Insurance and Liberty Mutual. We’ve found these companies to be affordable on average for young drivers.
| Car Insurance Company | Overall Rating | Our Award |
|---|---|---|
| 1. State Farm | 9.4 | Best Customer Experience |
| 2. Erie Insurance | 9.4 | Best for Basic Insurance Coverage |
| 3. USAA | 9.2 | Best for Military Members |
| 4. Geico | 9.1 | Best for Budget-Conscious Drivers |
| 5. Liberty Mutual | 9.1 | Good Programs for Young Drivers |
*The overall rating applies to a standard driving profile, while the ranking order applies to 20-year-old drivers.
#1: State Farm
Overview
State Farm is our top choice for the best car insurance for 20-year-olds. The company stands out for its generous good student discount, which is up to 25%. Drivers may be eligible for this discount until they turn 25, even after they graduate from college.
State Farm’s Steer Clear® program is another reason for 20-year-olds to consider the company. It’s an educational app that includes quizzes and driver training modules, and it awards discounts once the program is completed. Steer Clear is available to drivers under the age of 25.
Learn more in our State Farm insurance review.
#2: Geico
Overview
Geico is one of the cheapest car insurance companies for 20-year-olds because of its low average rates and variety of coverage options. Geico also offers useful discounts like a 15% good student discount and a driver’s educational course discount.
Good drivers can also save with Geico’s telematics insurance program, called DriveEasy. This program awards discounts based on your driving habits. It tracks things like hard braking, time of day and distracted driving. Getting usage-based insurance can be a good way for young drivers to save money, especially if they drive fewer than 12,000 miles per year.
Learn more in our Geico insurance review.
#3: USAA
Overview
Through our analysis, we’ve seen USAA offer rates about 30% to 40% cheaper than the national average for young drivers. It’s a good idea to get an auto insurance quote from USAA if you qualify. Twenty-year-olds who are in the military or are veterans can qualify, as well as those who have parents in the military.
Beyond low prices, USAA also has a good customer service reputation. The company scored 890 out of 1,000 points in the J.D. Power 2022 U.S. Auto Claims Satisfaction Study℠, which shows most of its customers have positive claims experiences. USAA also scored high in every region in the J.D. Power 2022 U.S. Auto Insurance Study℠, which took a wider look at customer service. In both studies, USAA outscored every other insurer.
Learn more in our USAA insurance review.
#4: Erie Insurance
Overview
In our rate analysis, we found that Erie Insurance is another cheap provider for young drivers. Its rates are up to 40% cheaper than the national average, which earns it a spot on our list of the best car insurance for 20-year-olds.
Erie Insurance also performs well in J.D. Power studies. It came in second place in the J.D. Power Auto Claims Satisfaction Study, for example. However, you’ll have to live in Washington, D.C., or one of the 12 states below to take advantage of Erie’s low rates and good customer service:
| Illinois | Indiana | Kentucky | Maryland | New York |
| North Carolina | Ohio | Pennsylvania | Tennessee | Virginia |
| Washington, D.C. | West Virginia | Wisconsin |
Learn more about the provider in our Erie Insurance review.
#5: Liberty Mutual
Overview
Liberty Mutual offers affordable car insurance for young motorists through a few discounts and programs. It has both a good student discount and a student-away-at-school discount. Good students attending college away from home may be able to stack those together.
Liberty Mutual also offers a usage-based insurance program called RightTrack®, which can help good drivers save up to 30% on car insurance rates. An app or plug-in device tracks mileage, nighttime driving, braking and acceleration. RightTrack also won’t raise your base rate if you aren’t a good driver.
Learn more in our Liberty Mutual insurance review.
Why Is Car Insurance So Expensive for 20-Year-Olds?
Twenty-year-olds aren’t teen drivers anymore, but they also aren’t out of the woods when it comes to high car insurance rates. Young adults are statistically more likely to get into accidents than older adults. Drivers see higher car insurance rates well into their 20s because of this, even if they have clean driving records.
You might be the safest 20-year-old driver out there, but the average cost of car insurance for your age group is higher because of the drivers who do get into accidents. According to the AAA Foundation for Traffic Safety, drivers between the ages of 20 and 24 got into about 74% more accidents than drivers between the ages of 30 and 39 in 2014 and 2015.
Below, you can see how the number of crashes changes by age group.
| Age Group | Crashes per 100 Million Miles Driven |
|---|---|
| 16 – 17 | 1,432 |
| 18 – 19 | 730 |
| 20 – 24 | 572 |
| 25 – 29 | 526 |
| 30 – 39 | 328 |
| 40 – 49 | 314 |
| 50 – 59 | 315 |
| 60 – 69 | 241 |
| 70 – 79 | 301 |
| 80+ | 432 |
Your car insurance premiums are based on how likely you are to file a claim, according to your provider. A variety of other factors also affect rates, but age is influential in most states. Below, you can see how average rates by age group relate to crash rates.
*Car insurance estimates are based on full-coverage policies with $50,000 bodily injury per person, $100,000 bodily injury per accident, $50,000 property damage per accident and a $500 deductible for collision coverage and comprehensive coverage.
How To Save on Car Insurance for 20-Year-Olds
Even if you’re 20 years old, there are a number of ways to save money on coverage. A few of the ways to find the best rates are shopping around, comparing car insurance discounts and limiting your coverage.
Shop Around
It might seem obvious, but one of the quickest ways to find a better rate is to compare car insurance quotes right now. You can shop around as often as you like, though we recommend comparing rates as often as your car insurance policy is up for renewal.
Each company has its own formulas for setting rates based on your driving profile. There may be a cheaper company out there at this time, but you won’t know if you don’t get a few car insurance quotes to find out. You can get quotes by putting your information into online quote tools or contacting insurance agents directly.
Find the Best Discounts
Car insurance companies usually offer multiple discounts, but not all companies have the same types of discounts. If you have good grades, look for companies that offer good student discounts to find lower rates. Or, if you’re a college student who’s on your parent’s policy and attending school away from home, make sure your family is getting a student-away-at-school discount.
When you’re shopping around for the best car insurance for 20-year-olds, keep an eye out for discounts like these:
- Safe driving discount
- Multi-policy bundling discount
- Military discount
- Driver training discount
- Defensive driving course discount
- Good student discount
- Student-away-at-school discount
- Multi-car discount
- New car discount
- Usage-based discount
Choose the Right Coverage and Deductible
Your coverage and deductible directly impact the cost of your auto insurance policy. You can save money by decreasing the limits of auto insurance coverage like comprehensive and collision insurance. You could also choose your state minimum coverage and drop comprehensive and collision to save more.
Your deductible is what you pay out of pocket before your insurance kicks in. Increasing this amount will lower your insurance cost because you’ll take some of the risk on yourself. Be sure you could pay your deductible if needed.
Choose a Cheap Car
If you’re considering getting a new car or trading your vehicle in, opt for a used vehicle that you or your family can buy with cash. Without an auto loan, you won’t be required to have comprehensive or collision coverage on the vehicle, so insurance will be cheaper.
Keep a Clean Driving Record
An at-fault accident will raise anyone’s rates, but it can make car insurance especially expensive for young drivers. If you get into an accident, you also won’t be eligible for a good driver discount if your company offers it. That’s why it’s so important to keep a clean driving history as a 20-year-old.
Maintain a Good Credit Score
Most states allow car insurance companies to set rates based on credit scores. A fair or poor credit score can raise your rates, so stay in the good or excellent credit zones to find good rates.
Best Car Insurance for 20-Year-Olds: The Bottom Line
As a 20-year-old, you’ll find higher rates than older adult drivers will. However, we have outlined some of the best companies with the cheapest rates for car insurance for you to compare. While we have provided our top picks, we recommend that you compare auto insurance quotes from multiple companies in order to get the best deal.
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Best Car Insurance for 20-Year-Olds: FAQ
Below are some common frequently asked questions about the best car insurance for 20 year olds:
Yes, car insurance goes down for 20-year-olds because the cost generally decreases each year from age 16 through age 35. Our estimates show a 21-year-old pays about 60% less than a 16-year-old. But even though 20-year-olds are no longer teens, they pay higher rates than older motorists because they’re high-risk drivers.
At any age, new drivers pay more for car insurance than experienced drivers. According to our estimates, 20-year-olds pay between $2,700 and $3,700 per year for car insurance, and new drivers can expect rates toward the higher end of that range.
There are several ways you can lower your car insurance when you’re 20 years old. On top of being a safe driver and maintaining good credit, if you compare quotes from three or more insurance providers, you increase your chances of finding cheaper rates. To save on car insurance, you can also take advantage of your company’s discounts, raise your deductible and decrease your coverage.
Yes, it’s cheaper to insure older cars because they have depreciated in value and insurance companies don’t need to pay out as much in the case of an accident. Also, you don’t need to have comprehensive and collision insurance if the car is paid off or bought outright, especially if you can afford to fix the vehicle or replace it if you get into an accident.
Our Methodology
Because consumers rely on us to provide objective and accurate information, we created a comprehensive rating system to formulate our rankings of the best car insurance companies. We collected data on dozens of auto insurance providers to grade the companies on a wide range of ranking factors. The end result was an overall rating for each provider, with the insurers that scored the most points topping the list.
Here are the factors our ratings take into account:
- Cost: Auto insurance rate estimates generated by Quadrant Information Services and discount opportunities were both taken into consideration.
- Coverage: Companies that offer a variety of choices for insurance coverage are more likely to meet consumer needs.
- Reputation and experience: Our research team considered market share, ratings from industry experts and years in business when giving this score.
- Availability: Auto insurance companies with greater state availability and few eligibility requirements scored highest in this category.
- Customer experience: This score is based on volume of complaints reported by the NAIC and customer satisfaction ratings reported by J.D. Power. We also considered the responsiveness, friendliness and helpfulness of each insurance company’s customer service team based on our own shopper analysis.
Our credentials:
- 800 hours researched
- 45 companies reviewed
- 8,500+ consumers surveyed
*Data accurate at time of publication.
If you have questions about this page, please reach out to our editors at editors@marketwatchguides.com.
