As a 20-year-old driver, insurance companies may view you as a higher risk compared to older and more experienced drivers. Below, you can learn what the average car insurance rates are for this age group and how you can obtain the most affordable rates that are available to you.
How Much Is Car Insurance for a 20-Year-Old?
Twenty-year-old drivers are not as expensive to insure as teens who’ve just earned their licenses, but the costs can still be steep. The average cost is around $3,500 for an annual policy that provides full coverage. This cost can vary depending on several factors, including the driver’s geographic location and chosen insurance provider.
How Does the Price of Car Insurance Differ for 20-Year-Olds Compared to Older Drivers?
Older drivers tend to have cheaper insurance rates than younger drivers. State minimum rates decrease drastically as drivers age and gain more experience. The rates continue decreasing until a driver reaches their early to mid-60s. Afterward, a driver can expect their insurance rates to rise slightly, as insurance companies view older drivers as more prone to accidents due to age-related problems like vision loss and slower reflexes.
Do 20-Year-Old Men or Women Pay More for Car Insurance?
Twenty-year-old men tend to pay more for car insurance than 20-year-old women. This is because auto insurance companies view men as riskier drivers than women. Some states, including Pennsylvania, North Carolina, Massachusetts, and Hawaii, ban auto insurance companies from using gender as a factor in determining insurance rates. In states like Michigan, the ban against using gender as a factor in determining insurance rates is only prevalent in specific regions.
Ways To Get the Best Car Insurance Rates as a 20-Year-Old
Here are some ways you can save money each month on your car insurance as a 20-year-old:
Remain on Your Parents’ Car Insurance Policy
There’s no age at which you need to get off of your parents’ car insurance policy. As long as you live at home, you can likely qualify to remain a member of their plan. When you join your parents’ car insurance policy, they’ll notice an increase in their premiums. However, this increase is likely to be much less than it would cost for you to pay for a policy of your own.
Become Eligible for Discounts
Many auto insurance companies offer discounts for which 20-year-olds can easily become eligible. For example, some companies provide discounts to students who earn good grades in college. You may be able to submit proof of your GPA and graduation year to your auto insurance company. As long as your GPA is above a certain benchmark, the company may provide a generous discount.
With certain auto insurance companies, 20-year-olds may be able to take defensive driving courses to qualify for a discount on their plan. Not only do these courses teach car control skills that make you a more skilled driver, but this initiative also shows that a driver commits to driving safely, which is an enticing quality for an auto insurance company to see in a customer. Confirm that the insurance company recognizes the course you’re taking to ensure you can become eligible for a discount.
Auto insurance companies may also offer discounts to customers who have good credit scores. While 20-year-olds haven’t had a lot of time to build good credit, they can implement responsible financial habits to prevent their credit scores from suffering. For example, they can pay off any credit cards they have each month in full and keep their credit utilization low.
Review Your Auto Insurance Options
When you first begin shopping for auto insurance, be sure to review all of your options. Different insurers may provide the same kind of coverage but charge vastly different rates. You can visit our collection of blogs on car insurance to begin your research. This can help you find a company that offers affordable rates for people in their early 20s.
Even if you already have auto insurance, it’s important to not become complacent. You may request quotes from different companies to find the best option. You can show these quotes to your current insurance provider to see if they’re willing to lower your present rate. If not, you can switch providers and secure more affordable coverage.f
Drive a Practical Vehicle
If you plan on purchasing a vehicle of your own instead of using somebody else’s, you may consider choosing something practical. A high-end sports car is typically more expensive to insure, as it can require more costly repairs. Insurance companies also see sports car owners as more prone to participating in risky driving, so they may charge these motorists higher coverage rates.
To secure the most affordable insurance available, you can purchase a more practical vehicle. Ideally, this vehicle has high safety ratings and doesn’t have a bunch of unnecessary features that are costly to repair. You may consider purchasing one of the safest vehicles of 2022, like the Toyota Camry or the Nissan Maxima, to get a lower insurance rate. You may also consider buying a gently used vehicle in good condition that doesn’t have the latest and flashiest features.
Minimize Your Coverage Limits
Every state in the U.S. except for New Hampshire implements base-level liability requirements for auto insurance. Many drivers opt for additional coverage, as these minimum requirements don’t provide very much coverage. When you decide how much coverage you want, you can consider the value of your vehicle. If your vehicle isn’t worth much, you may opt for liability-only auto insurance. By waiving collision insurance, you can save the amount of money each month. Note that you’ll have to pay for repairs out of pocket, so it’s worth assessing your personal financial situation and how much risk you’re willing to assume.
Educating yourself on car insurance rates and how to lower them is one of the most valuable things you can do as a 20-year-old driver. Be sure to browse our website for guidance as you navigate the world as a young motorist.
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.
