By the time you turn 23 years old, you may have been driving for several years or more. Insurance companies will consider your age, driving record, and other factors when determining how much you pay for auto insurance. Use this guide to learn the answer to the question, “How much is car insurance for a 23-year-old?” and other important information about the cost of insurance at this age.
How Much Is Car Insurance for a 23-Year-Old Driver?
Typically, 23-year-old drivers pay more for car insurance than older, more experienced drivers. According to Bankrate, 23-year-old drivers pay an average of $2,591 per year for full coverage. While higher than the cost of the national average, this amount is less than the average cost of auto insurance for younger drivers, including teens and those in their earlier 20s.
The average cost of car insurance for 23-year-olds can vary widely based on their geographic location. Here’s a comparison of insurance costs for these drivers in some states, according to Bankrate:
- California: $3,064
- Florida: $3,955
- Hawaii: $1,272
- Idaho: $1,795
- Kentucky: $3,649
- Louisiana: $4,176
- Minnesota: $2,444
- New Hampshire: $1,906
- Rhode Island: $2,824
- Texas: $2,960
Why Is Car Insurance More Expensive for 23-Year-Old Drivers?
Most car insurance companies use age as a factor when determining insurance premiums. These companies consider younger drivers to be more at risk for accidents since they have less experience on the road. Typically, insurers charge the highest premiums to new drivers, such as 16-year-olds who are getting their licenses for the first time. You can expect to see your auto insurance rates decrease each year until they stabilize in your late 20s or 30s.
In addition to age, companies use a variety of other factors to set insurance rates for 23-year-old drivers. According to the Insurance Information Institute, here are some other common factors insurance companies consider when determining premiums:
Your driving record reflects the number of accidents you’ve had, traffic citations you’ve received, and claims you’ve filed with an insurance company previously. Companies refer to your driving record when setting your auto insurance rate. They use this information to determine the likelihood that you may file a claim. Since 23-year-olds have a shorter driving record than older adults who have been driving longer, companies often set higher insurance premiums for this age group.
Auto insurers will consider the value of your vehicle when determining your insurance premium. This information helps them understand how much they may pay to replace the vehicle if it’s totaled in an accident. Besides value, insurers may consider other factors related to your vehicle, such as the cost of repairs, chance of theft, and its safety record. For example, a 23-year-old who drives a brand-new sports car may pay more for car insurance than a 23-year-old who drives a used sedan with high safety ratings.
A 23-year-old driver’s residence can affect how much they pay for car insurance. Companies will use location data to review the number of drivers and average accident rates in your area. If you live in an urban area with many drivers, your chances of being involved in an accident are higher than if you lived in a rural area with fewer drivers. Insurers may charge you more for your premium as a result. Similarly, a high rate of theft or vandalism in your area can cause your insurance premium to increase.
Your gender can affect how much you pay for car insurance as a 23-year-old driver. According to the Insurance Information Institute, female drivers statistically have fewer accidents, including DUI accidents and accidents involving serious injuries. For that reason, some insurance companies may set lower premiums for female drivers. In some states (California, Hawaii, Massachusetts, Michigan, Montana, North Carolina, and Pennsylvania), companies are not allowed to use gender to set car insurance rates, so 23-year-old male and female drivers may pay the same premiums if all other factors are equal.
How To Reduce the Cost of Car Insurance for a 23-Year-Old Driver
While 23-year-old drivers may pay more for car insurance based on their age, there are ways you can reduce the cost of your premium. Here are some strategies to help you lower the cost of car insurance as a 23-year-old driver:
- Compare quotes: It’s important to compare quotes from different companies to help you choose the best car insurance plan for you. Companies can offer widely different rates, so it’s worth getting several quotes to help you compare.
- Consider costs: Before you purchase a vehicle, consider the costs to insure it by weighing different factors, including its price, repair costs, and safety ratings. Choosing the right vehicle can help you lower your insurance premium.
- Ask for discounts: Many 23-year-old drivers may be eligible to receive discounts, so ask your insurance company about this option. For example, some companies may offer discounts if you’ve completed a driving course or have low mileage.
- Increase your deductible: In many cases, you can lower your premium by increasing your deductible, which is the amount you pay out-of-pocket if you file a claim. Make sure you can cover this expense if you’re involved in an accident before choosing a high-deductible plan.
Types of Insurance for 23-Year-Old Drivers
Another way 23-year-old drivers can lower the cost of their premiums is by adjusting the types of insurance they have on their vehicles. Nearly every state requires drivers to have liability insurance with minimum limits, but if you own your vehicle outright, you may not need to have comprehensive or collision coverage. These types of insurance cover damages to your vehicle after an accident or other event, such as weather damage. If your vehicle has a low value, it may not be worth it to have comprehensive and collision coverage.
Depending on the state where you live, you may need to carry other insurance on your vehicle, such as personal injury protection or uninsured or underinsured motorist coverage. Check with your insurance company to make sure you’re meeting state requirements without paying too much for additional insurance you may not need.
Now you know the answer to the question, “How much is car insurance for a 23-year-old?” While insurers may set higher rates for drivers in this age group, you can use various strategies to help you save money on your car insurance and find a policy that works best for you.
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.