Purchasing car insurance is often an expensive process for new drivers. Eighteen-year-old drivers face high premiums for full coverage insurance, regardless of their driving history. While insurance companies vary by state and each company has its own standards for determining the cost of insurance, most plans for young drivers have high monthly and annual rates. Read on to learn more about the price of car insurance for teenage drivers and how to combat these high insurance rates effectively.
Price of Car Insurance for an 18-Year-Old
Typically, the average annual price of car insurance for an 18-year-old driver is $5,565 for full coverage. This exceeds the national average by nearly $3,900. This results in between $300 and $600 for a monthly insurance payment, and sometimes it may be even more expensive. If you’re a new driver, it’s important to be prepared to pay a higher amount for the first few years. Even if you’re a parent or guardian that adds your teen driver to your insurance plan, you can expect your monthly payments to increase significantly.
The cost also varies between men and women. An 18-year-old man may pay higher rates than a woman of the same age. This is a result of statistical evidence demonstrating that women are less likely to get into a major accident or to drive under the influence. On average, women pay about $600 less than men for car insurance each year, except in a few states that prohibit this practice (California, Hawaii, Massachusetts, Michigan, Montana, North Carolina, and Pennsylvania).
Reasons Why Car Insurance Costs More for Young People
There are a few reasons why insurance companies increase the price of insurance for teenage drivers. Insurance companies want to ensure that they can afford to cover these new drivers, even if the driver is added to their parent or guardian’s insurance plan. It’s helpful to understand why the cost of insurance is high as you look for available plans. Here are a few reasons insurance costs more for 18-year-olds:
- Lack of Experience: 18-year-olds are inexperienced drivers. They’re at a higher risk of receiving citations and tickets or getting into a collision. It costs the insurance company money each time these events occur, which is why they charge young people a higher price for a full-coverage plan.
- Driving History: If a driver has an extensive claims history, their insurance plan may be more costly since they are a high-risk driver and may cost the company more money over time.
- Car Type: Sometimes, insurance companies charge higher rates when you drive a newer, more expensive car since these vehicles cost more to repair or replace than older cars.
- State of Residence: Each state has different insurance requirements and regulations, so you may find a cheaper plan depending on where you reside.
Car Insurance by State
Car insurance for 18-year-olds often varies by state. Each state has its own regulations for car insurance, and it costs more to insure your car in some states compared to others. This may be a result of regulations or population density. The most expensive states for a young driver include:
- Rhode Island
- New Jersey
- Nevada
- Michigan
- New York
Some states are cheaper for 18-year-olds as a result of low car accident statistics, low populations, or low rates of uninsured drivers. The cheapest states for a young driver to purchase car insurance include:
- Hawaii
- Indiana
- Iowa
- Maine
- North Carolina
How To Find Affordable Car Insurance
Finding affordable car insurance for an 18-year-old can be a challenging undertaking, but there are strategies you can use to lower the cost. Here are a few ideas you could try:
Raise Your Deductible
The higher your deductible, the lower the monthly payments will be. If something happens to your car, you’ll pay more money to fix your vehicle. Safe drivers with a low risk of getting into a car accident can benefit from a lower monthly payment. However, it’s important to choose a deductible you can afford in case you need to file an insurance claim.
Find Discounts
Some insurance companies offer seasonal discounts that you can benefit from. There are discounts offered for a variety of reasons, like having safety features on your car or opting to receive your insurance bill online. While these discounts may be small, they can save you money in the long run.
Look for Student Discounts
If you’re a student, you can benefit from student discounts. Often, an insurance company asks to see your grades or your transcript before providing a discount. This can help you save money on the annual cost of insurance.
Get Multiple Quotes
Before choosing an insurance plan, it’s best to get multiple quotes. By shopping around at multiple companies, you can compare prices, assess the quality of different plans, and find a deal that works for you. Getting multiple quotes can save you money on your initial insurance plan. You might try negotiating with an insurance company by asking them to match another company’s quote, which can help you get the best possible coverage.
Take a Driving Course
Another way to save some money on your car insurance is by taking a defensive driving course. Some companies may offer a discount to drivers who have taken the time to take a course on defensive driving or driver safety. It’s best to determine which company provides the best discount for these courses before you enroll. Additionally, ensure you choose a course that’s approved by the insurance company so you qualify for the discount.
Most young drivers will pay a high rate for car insurance until they get older. However, there are several ways to lower the cost of your insurance payments. Eighteen-year-olds can benefit from taking drivers’ safety courses, comparing quotes, or cashing in on student discounts. While the price may be high for 18-year-olds, it’s helpful to know what to expect so you can find an insurance plan that works within your budget.
At FIXD, our mission is to make car ownership as simple, easy, and affordable as possible. Our research team utilizes the latest automotive data and insights to create tools and resources that help drivers get peace of mind and save money over the life of their car.
