Finding the best car insurance as a first-time buyer is a big deal. Car insurance is particularly expensive for drivers without a history of coverage. In fact, our research shows that first-time buyers pay about $550 per month for car insurance — or 300% more than drivers who have had an auto policy for a number of years. This means you might pay $6,000 or more per year for auto insurance if you’re buying for the first time.

We’ll cover everything first-time buyers need to know about car insurance in this article, including:

How to buy first-time car insurance

There are four simple steps to buying car insurance for the first time — or at any time, really:

  1. Gather the information you need to get car insurance.
  2. Decide whether you want to buy online, over the phone or in person.
  3. Get quotes from several car insurance companies based on your coverage needs.
  4. Compare quotes to get the best policy for you.

What do I need to get car insurance?

You should collect certain pieces of personal, driver and vehicle information before you start gathering auto insurance quotes:

Information needed to get car insurance
Type of information Examples
Personal information
  • Name
  • Address or state of residence
  • Date of birth
  • Contact information
Driver information
  • Number of drivers on the policy
  • Driver history, like accidents or license suspensions
  • Previous insurance information
  • Commute length
Vehicle information
  • Make and model
  • Year
  • Mileage
  • VIN

Buy online, over the phone or in person?

There are three ways to get car insurance: online, over the phone or in person. All come with advantages and disadvantages.

Buying auto insurance online is a good option if you don’t want to deal with an agent, you want quotes fast or you want to get quotes on your own time, for instance. That said, if you buy insurance online, you won’t be able to ask questions about your unique situation and get the advice of an expert.

Getting car insurance over the phone, on the other hand, is great for people who want to talk with an agent, but don’t want to go through the hassle of going into an agency office.

Decide how much coverage you need, then gather quotes

Along with deciding how to buy car insurance, you need to decide how much coverage to buy.

Most states have minimum car insurance coverage requirements. These minimum requirements aren’t often enough to protect you if you get into a bad accident, though. At QuoteWizard, we recommend buying at least the following:

  • Bodily injury liability: $100,000 per person, $300,000 per accident
  • Property damage liability: $100,000
  • Uninsured/underinsured motorist liability: $50,000 per person, $100,000 per accident

If your state requires other coverages, like personal injury protection (PIP) or medical payments (MedPay), adding it should be cheap enough. 

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

Once you’re done with all of the above, use the information to get quotes from a handful of car insurance companies.

Compare quotes

The final step in getting car insurance for the first time is to compare quotes. Here are some tips for comparing quotes:

  • When you look at the quoted rates, don’t forget to take coverage limits into account. Cheaper policies may provide less coverage.
  • Pay attention to the deductible, too. This is how much you’ll have to pay out of pocket before your insurance kicks in after a claim.
  • Make sure all discounts you think you should be eligible for are applied.

How much does first-time car insurance cost?

First-time buyers pay an average of $6,620 per year 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, however, paid only $1,667 per year for car insurance, on average. The difference? He has a clean driving record and a robust insurance history.

Cost of car insurance for first-time buyers
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 is the best car insurance for first-time buyers?

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

Best car insurance companies for first-time buyers
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 to get cheap car insurance for the first time

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 policies, which typically include comprehensive and collision as well as liability coverage. 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 need to have full 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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