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Car Insurance for a 20-year-old

Here's what you need to know about finding cheap car insurance as a 20-year-old.

new drivers in car

Auto insurance typically costs more for a 20-year-old than for a more experienced driver, but less than for teenage drivers. That's because insurers consider young drivers a high risk to insure because they tend to file more claims. But there are ways to save money on car insurance as a 20-year-old driver, like staying on your parent's policy or qualifying for discounts.

Find out all you need to know about car insurance for 20-year-olds in this article, which covers:

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

According to our data, a 20-year-old driver should expect to pay $4,001 per year for car insurance. Rates are typically high until you turn 25. Usually, your rates gradually decrease as you age until you become a senior citizen, then they'll rise again. Although 20-year-old drivers pay more than people with more experience on the road, they pay significantly less than teen drivers. This is how much young drivers typically pay for car insurance, according to our research:

car insurance rates for 18 year olds and other ages

This graph shows how much of an impact age has on insurance rates. According to our data, a 16-year-old pays $7,021 per year for car insurance, whereas a 21-year-old pays $3,170. That's a $3,851 difference per year, or a $321 difference per month.

Luckily, as a 20-year-old, you're likely saving money compared to teen drivers. However, there are factors other than age that play into your policy pricing. To make sure your rates continue to decline, avoid traffic violations, maintain a good credit score and try to limit the number of claims you file.

Cheap car insurance for a 20-year-old male

Another major factor that affects your car insurance rates is your gender. Insurance companies weigh certain factors differently when pricing your policy, but in general, rates are higher for men than for women. We found that in Alabama, the average 20-year-old male driver pays $4,089 per year for car insurance.

That's because statistics show that men are involved in more car accidents than women. Insurers see it as more of a risk to insure males than females. If you're a man, your rates may always be higher than a woman's. However, as you get older, gain more experience on the road and keep your driving record clean, your rates will likely decrease and your gender may play less of a role in your prices.

Cheap car insurance for a 20-year-old female

If you're looking for cheap car insurance as a 20-year-old woman, you may be happy to find that you'll likely save more money than your male counterparts. Our data indicates that a 20-year-old woman in Alabama pays an average $3,427 per year for car insurance. That's $662 less per year, or $55 less per month, than a man in the same state.

Cheapest car insurance companies for a 20-year-old driver

Insurance companies differ in how they price a driver's policy. That's why you should do your research to find the cheapest insurer for you. According to our data, these are the cheapest car insurance companies for a 20-year-old driver:

Insurance company Average annual rate
COUNTRY Financial $2,190
USAA $2,790
GEICO $2,927
Safeway $3,986
Progressive $4,374
Allstate $4,872
State Farm $5,535
Note: Average rates are based on non-binding estimates provided by Quadrant Information Services. Your rates may vary.1

COUNTRY Financial is the cheapest insurance company for 20-year-old drivers, according to our data. But remember, your rates will likely differ depending on factors like your gender, location and credit score. Shop around and compare quotes from several providers to find cheaper car insurance.

Saving money on car insurance as a college student

If you're a college student living at home, you may able to stay on your parent's car insurance policy. You can likely even stay on it if you are a college student living away from home but plan to use a car when you return. Many insurance companies offer multi-car discounts for households with several drivers, so you'll likely end up saving money if you opt to stay on your parents' plan.

Our research shows that this is how much a 20-year-old with their own policy may pay for car insurance versus a 50-year-old with a dependent on their policy:

Age Average annual premiums
20-year-old $4,001
50-year-old with dependent on policy $3,382
Difference $619
Note: Average rates are based on non-binding estimates provided by Quadrant Information Services. Your rates may vary.1

On average, a driver with an added dependent on their policy pays $3,382 per year for car insurance, but a 20-year-old with their own policy pays $4,001 per year. That's a $619 annual rate difference, or $55 per month.

Insurance discounts for young drivers

There are plenty of discounts that young drivers may be eligible for. Here are a few examples:

  • Good student discount: If you're a college student with good grades, you may be eligible for a good student discount. If your insurer offers it, you may need to provide proof of your grade-point average, usually a B or better.
  • Defensive driving classes: Some states require you to take a defensive driving course to obtain your license. Whether you take and pass a defensive driving class for your state requirements or just to be safer on the road, you may be eligible for a discount through your insurer.
  • Resident student discount: This is another discount aimed at college students. For students who attend school more than 100 miles from home, your insurance company may offer a discount.

Methodology

1To determine how much young drivers pay for car insurance, we used Quadrant Information Services to analyze data from several major insurance companies for drivers ages 16 through 21. We analyzed data from these states: Alabama, Arizona, Mississippi, Oklahoma and South Carolina. After finding the average for each age within each state, we determined the average rate for the age across five states. To determine how much a policy that includes a 20-year-old costs, we used the profile of a 50-year-old driver with a dependent on their insurance policy.

These were the factors used in our driver profiles from all of the above sections:

  • All drivers ages 18 through 21.
  • Female and male drivers.
  • Drivers with no accidents and one at-fault accident.
  • Drivers with the state's minimum liability insurance.
  • Drivers with 100/300/50 insurance coverage limits and a $1,000 deductible.
  • Drivers with average, excellent and poor credit scores.

We analyzed data from ZIP codes across Alabama and Arizona using a consistent driving profile to find the cheapest car insurance companies. Our driving profile is for a single, male 20-year-old with average credit and a clean driving record. The driver has 100/300/50 insurance coverage limits and a $1,000 deductible.

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