Finding the best auto insurance as a first-time buyer is a big deal. We found that average rates for a first-time insurance buyer cost about $550 a month for full coverage.

Insurance is particularly expensive for drivers without an insurance history. Our research shows that first-time insurance buyers pay about 300% more for car insurance than drivers who have had a policy for a number of years. That means you might pay several thousand dollars for auto coverage per year.

This article covers everything first-time buyers need to know about car insurance, including:

How much does car insurance cost for first-time buyers?

First-time buyers pay an average of $6,620 per year, or $552 per month, for car insurance, according to our data. That’s almost $5,000 per year — or around 300% — more than what drivers with an auto insurance history tend to pay for coverage.

You will probably pay these higher rates for an auto policy as a first-time buyer regardless of your age. Although car insurance rates usually go down at age 25, that's not the case for our sample 30-year-old driver with no driving record or insurance history. Both our 30-year-old and 16-year-old drivers got the same first-time auto insurance quotes, which averaged $6,620 per year.

Our 40-year-old driver, on the other hand, paid only $1,667 per year for car insurance, on average. The difference? He has a clean driving record and a robust insurance history.

Average insurance premiums for first-time buyers with no insurance history
Age of driver 16 years old 30 years old 40 years old (with insurance history)
Annual premium $6,620 $6,620 $1,667
Monthly premium $552 $552 $139
Note: Average rates are based on non-binding estimates provided by Quadrant Information Services. Your rates may vary.

You might pay more or less than $6,620 per year for a car insurance policy as a first-time buyer, depending on various factors. These rates are based on a full-coverage policy. Our research shows that a full-coverage policy can cost about twice as much as minimum coverage. Besides your age, insurance history and coverage level, some of the factors that can impact how expensive or cheap car insurance is for you are your:

Something else to keep in mind is that the longer you have a policy and a good driving record, the more your auto insurance rates may decrease. Assuming you're not involved in any major traffic violations, of course.

What are the cheapest car insurance companies for first-time buyers?

The cheapest car insurance company for a first-time buyer is State Farm, based on our research.

Insurance company Average annual premium Average monthly premium
State Farm $3,842 $320
Travelers $4,256 $355
Progressive $4,896 $408
Note: Average rates are based on non-binding estimates provided by Quadrant Information Services. Your rates may vary.

State Farm offered our sample first-time driver an average rate quote of $3,842 per year. That’s more than $1,000 cheaper than what another major insurer, Progressive, offered.

How can first-time buyers get cheap auto insurance?

The best ways to get cheap car insurance as a first-time buyer are to look for discounts and to compare quotes from a number of insurance providers.

Bundle your insurance policies

Bundling insurance policies can be a great way to save money and get cheap auto insurance as a first-time buyer. This is easiest if you are a renter or homeowner, but many insurers will let you bundle other types of policies, too. Talk with your agent to see if you qualify for a bundling discount.

See if you qualify for other discounts your insurance provider offers

Car insurance providers offer all kinds of discounts that may save you money and lower your policy premium. Here are just three examples:

  • Defensive driving discount. You might earn a 5% to 20% discount from your insurance company for completing a defensive driving course. Not all insurers offer this discount, so check with your agent before you sign up for a particular course or school.
  • Good driver discount. Many insurance companies offer discounts that reward safe driving with cheaper premiums.
  • Good student discount. If you're a student with a GPA of 3.0 or higher, you may qualify for a good student discount. You'll have to show proof of your good grades, but it could decrease your rates by up to 25%.

Compare auto insurance quotes

Another easy way to get cheap auto insurance as a first-time buyer is to compare rate quotes from several insurers. This can be a good way to save money because companies weigh variables differently to price your policy, so coverage may be significantly cheaper depending on where you buy it.

Get minimum coverage

The rates in this article are based on full coverage, which includes comprehensive and collision. To save money, you can drop full coverage to significantly lower your rate. Whether it’s a good idea for you depends on your car. If you have a newer car, you’ll probably want to pay extra for full coverage. If you’re leasing or financing a car, you’ll likely be required to buy full coverage.

How to get car insurance for the first time

The key to buying car insurance for the first time is to shop around online and then get rate quotes from several companies.

Once you have an idea of how much you might pay for a policy, you can talk with an insurance agent about coverage limits, deductibles, discounts and more.

You can also talk with an insurance agent or broker in person, but many drivers choose to start the process online.

What car insurance coverage should I get as a first-time buyer?

If you drive a newer or expensive vehicle and you can afford it, you should consider getting full-coverage car insurance. A full-coverage policy usually includes liability, collision and comprehensive coverages.

If you drive a financed car, you should consider gap insurance, too. It covers the amount between what you still owe on a vehicle and what it is worth (due to depreciation).

You're required to purchase at least your state's minimum liability insurance. Other than that, you can customize your policy as you see fit. Keep in mind that buying only liability insurance won't cover damage to your own car or any of your injuries if you're in a crash.

What should my coverage limits be as a first-time auto insurance buyer?

As a first-time car insurance buyer, your main goal should be to make sure you have enough coverage. We recommend 100/300/100 liability coverage limits to protect you if you're ever in a costly accident.

If you drive an older vehicle, you may be able to get away with low comprehensive and collision coverage limits. You might be able to forego comprehensive and collision coverages entirely if your car is old enough and isn’t worth much.

Comprehensive and collision coverage pays to repair or replace your car if it's damaged. For an old car, it’s not always worth the money. However, if your car is new or newer, your car insurance policy should include at least some comprehensive and collision coverage.

Methodology

We compared rates from auto insurance companies throughout California for this article. Rates are based on the driving profile of a 16-year-old, a 30-year-old and a 40-year-old male driver. He drives a 2014 Honda Civic and has 100/300/50 liability coverage, as well as $1,000 deductibles for comprehensive and collision coverages. Your rates may differ based on your personal factors.

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