The Cost of Teen Car Insurance (2023)

The average cost of car insurance for a teen driver is $532 a month, but teens are charged 48% less when they are added to their parents’ policy. Whether you are a young driver or the parent of one, here are the most important things to know about car insurance for teens.

Average cost of car insurance for teen drivers

Parents who add a teen driver to their car insurance pay an average of $580 a month for a single policy. While this may seem like a lot, it is actually 44% less than a family’s combined cost of having the parents on one policy and their teen on another, which adds up to $834 a month.

In general, a child can remain on their parents’ car insurance when they reside in their parents’ home and/or a parent is listed on their vehicle’s title. However, there are occasions when it makes more sense for a young driver in either of these situations to get their own car insurance.

For parents, placing a teen on your policy adds an average of $278 a month to your car insurance bill. This is 48% less than the $532-a-month rate a teen pays for a standalone policy.

You may see a smaller increase than this if you shop around and compare auto insurance quotes from several companies.

If you are the parent of a young driver, your teen’s gender and specific age go a long way toward determining how much you’ll pay to add them to your car insurance.

For example, it costs an average of $272 a month to add a 19-year-old female to your policy, compared to $390 a month to add a 16-year-old male, a 35% difference.

Cheap car insurance for teens

Among the most widely available national brands, State Farm, American Family and GEICO offer the cheapest car insurance to teens seeking their own policies. USAA’s rates are cheaper than all three companies, but USAA is only available to members of the military community.

While age plays a significant role in determining your rates, car insurance companies also consider other factors, including:

• Crash and vehicle-theft rates in your community
• Your vehicle’s market value
• Safety features your vehicle may have
• Your vehicle’s risk factors, such as a high-performance engine
• Your driving record, unless you just got your license
• Any discounts you may qualify to receive

Since each insurance company weighs each factor differently and offers different discounts, you may qualify for a considerably cheaper rate with one company than you do with others. This is why it’s best to shop around.

Cost of adding a teen to their parents’ car insurance

The cost of adding teens to their parents’ car insurance can vary significantly by company, and this is why parents should shop around for the best rate when their teen reaches driving age.

Among national brands, Nationwide, American Family and State Farm offer the cheapest car insurance to parents with a teen driver.

Costs of teen car insurance per state

At the state level, the average cost of standalone car insurance for teen drivers ranges from $126 a month in Hawaii to $884 a month in Connecticut.

On average, young females are charged 11% less for car insurance than young males, because male teenagers have higher crash rates than their female peers.

However, seven states prohibit car insurance companies from using gender as a rate factor. In California, Hawaii, Massachusetts, Michigan, Montana, North Carolina and Pennsylvania, a teenage male’s gender cannot be the sole basis for charging him a higher rate than a female with the same rate qualifications.

Why is car insurance for teens so expensive?

Teen drivers have the highest crash rates among all age groups, and this is one of the main reasons why car insurance is so expensive for young drivers.

Accidents cost insurance companies money in the form of claims payouts. Insurance companies pass these costs along in the form of higher rates for drivers considered more likely to be involved in an accident.

Statistically, teens, particularly male teens, are more likely to be involved in an accident than those in other age groups. For example, the Insurance Institute for Highway Safety reports:

• The crash rate for teen drivers is nearly four times higher than it is for those in their 20s or older.
• Based on vehicle-miles driven, 16- and 17-year-olds are involved in nearly three times as many fatal crashes as drivers aged 20 and up.
• The motor vehicle death rate for male drivers in their teens was more than twice as high as it was for female teenagers in 2019.

Excessive speeds, distracted driving, and drug or alcohol consumption are among the leading factors that contribute to the high crash rates for teen drivers. Teens need to understand that driving is serious business and avoid these risks when they get behind the wheel.

By virtue of their age, teens have also not yet had enough time to establish a clean driving record and good credit, which are among the factors that often help bring down insurance rates for older drivers.

Discounts for teen drivers

Auto insurance is expensive for teens, but that doesn’t mean you have to pay top dollar for it. Here are some of the most common discounts available to teen drivers.

Good grades

Many insurance companies offer a good-student discount to teens who maintain a grade point average of 3.0 or better in high school or college. You usually have to provide a copy of the teen’s school transcripts to qualify.

Driving courses

People who complete certain driving courses and programs often earn great car insurance discounts. Defensive driving courses could net you a 10% rate discount.

Safety features

You may qualify for big discounts if your car has safety features or enhancements. Some of the vehicle add-ons that can save you money:

• Blind-spot detection systems
• Electronic stability control
• Automatic emergency braking
• Anti-theft devices

Plus, having these precautions in place can potentially decrease your likelihood of being involved in an accident or having your car stolen and never found. In turn, this lowers your chance of needing to file a claim and having your insurance premiums spike.

Buy a safe car

Insurance companies determine your rates in part by your car's make and model, and teens can often get discounts by choosing a safe vehicle.

Safest cars for teen drivers

With so many makes and models available, choosing a car for a teen to drive is no easy feat. One car feature that matters the most, no matter which make or model you choose, is safety. Driving a safe car as a teen is vital for two reasons:

• It often costs less to insure a safer vehicle.
• In a crash, a safe car can be the difference between life and death.

IIHS teams with Consumer Reports (CR) to identify the safest cars for teens, based on a combination of factors, including safety ratings and insurance claims history.

For used cars, IIHS and CR recommend:

• Mazda 3 sedan or hatchback (2014 or newer)
• Subaru Crosstrek (2018 or newer)
• Lincoln MKZ (2015 or newer)
• Toyota Avalon (2015 or newer)
• Nissan Murano (2015 or newer)

New cars that make the IIHS/CR list include:

• Honda Insight
• Kia K5
• Lexus IS
• Chevrolet Trailblazer
• Hyundai Palisade

IIHS and CR generally recommend against high-performance cars, mini cars and large SUVs for teen drivers.

High-performance cars tempt teens to drive at excessive speeds, while mini cars generally provide less structural protection for a vehicle’s occupants in a crash. Large SUVs may be difficult for new drivers to handle and tend to require longer braking distances.

Car insurance for college students

A teen should generally maintain their car insurance while attending college or any other institution of higher learning, but the best approach depends on a teen’s situation.

• If you are sending your teen off to college without a car, your insurance company may offer an “away at school” discount. This reduces your rate and keeps your teen insured when they borrow a car while away or visiting home.
• If you plan to send your teen to college with a car, you can usually keep your teen on your car insurance. However, if your teen lives off campus, you may need to change the vehicle’s garaging address with the insurance company.
• A teen who plans to live off campus may need their own insurance, particularly if a parent is not listed as a registered owner of their vehicle.

Since the specific rules for extending car insurance to a teen while they are at college vary by company, it’s best to discuss your options with your insurance agent.

Young drivers who maintain a clean driving record and establish good credit generally start seeing their car insurance premiums go down in their 20s, with a sizable price dip at age 25.

Teen driver FAQs

Methodology

The prices shown in this analysis reflect the average between minimum- and full-coverage car insurance rates, as shown in quotes obtained from Quadrant Information Services for households in Illinois, New York, Ohio, Texas and Washington.

The five states were chosen to reflect geographical diversity.

Households include two 50-year-old parents with a teen driver and two vehicles: a 2012 Honda Accord LX and a 2014 Toyota Camry SE, each driven an average of 13,500 miles per year.

Unless otherwise noted, rates for teen drivers reflect the average of prices available to all teens, male and female, aged 16 to 19 years old, for minimum- and full-coverage policies.

Minimum-coverage policies meet each state’s minimum requirements for liability insurance, uninsured-motorist coverage in Illinois and New York, and personal injury protection (PIP) in New York.

Full coverage policies includes minimum levels of uninsured-motorist coverage and/or PIP, where required, plus the following coverages, limits and deductibles:

• Bodily injury liability: $100,000 per person/$300,000 per accident
• Property damage liability: $100,000
• Collision: $500 deductible
• Comprehensive: $500 deductible

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