Cheap Car Insurance For 20-Year-Olds (2024)

Car insurance can be a hefty expense for 20-year-olds, especially if they’re buying their own policy for the first time. However, now with a few years of driving experience under their belt, car insurance prices should start to fall from when they were a newly-licensed teen driver.

We analyzed average car insurance costs to help you find the cheapest car insurance for 20-year-olds.

How Much Is Car Insurance for a 20-Year-Old?

It costs an average of $1,496 a year to add a 20-year-old to a parent’s car insurance policy, according to Forbes Advisor’s analysis. That comes to $125 a month extra parents will shell out for adding a 20-year-old to their auto insurance policy.

Adding a young driver to a parent’s policy hikes the parent’s car insurance costs, but it’s still much less than what the young adult will pay for their own policy. A 20-year-old buying their own policy will pay an average of $4,499 a year. That’s $375 a month, three times the monthly amount parents would pay to add the young adult to their policy.

The overall average cost of a parent’s car insurance policy with a 20-year-old included is $4,458 a year. That’s a sizable amount, but shopping for the best car insurance prices can help you identify the most affordable coverage for your family.

A 20-year-old driver generally pays less for auto insurance than they did as a teen, but rates won’t drop into the more affordable range for a few more years. That’s because 20-year-olds are still more likely to be in fatal car accidents than drivers age 25 and older. The U.S. Department of Transportation finds that young adults aged 20 to 24 have the highest rate of car crash fatalities among all ages—with 19.2 per 100,000 people. In comparison, the rate is 17.5 for those aged 25 to 29.

What Is the Cheapest Car Insurance for 20-Year-Old Drivers?

USAA is the cheapest car insurance company for adding a 20-year-old driver to a parent’s policy, according to our analysis. USAA car insurance is only available to military members and their families, so other good options to check out are Geico and American Family.

USAA, Geico and American Family have car insurance costs below $1,000 a year, on average, for adding a 20-year-old to a parent’s policy.

Cheapest car insurance costs for adding 20-year-old drivers

Here are the costs for adding a 20-year-old driver to an existing parent car insurance policy.

*USAA is only available for military members, veterans and their families.

Cheapest car insurance for parents plus a 20-year-old driver

If you’re shopping for a new policy that includes both parents and a 20-year-old driver, USAA is the cheapest but has limited eligibility. Other cheap car companies for 20-year-olds are Travelers, Geico and Erie, which all have rates below $4,000 a year.

*USAA is only available for military members, veterans and their families.

Cheap car insurance for 20-year-olds on their own policy

USAA, Auto-Owners and Geico have the cheapest car insurance for 20-year-olds who buy their own policy. USAA comes in under $3,000 a year but has limited eligibility. Auto-Owners and Geico are the next best choices for price, both below $3,600 a year.

*USAA is only available for military members, veterans and their families.

What Factors Influence Auto Insurance Costs for 20-Year-Old Drivers?

Here are some of the main factors auto insurance companies use to calculate car insurance rates for 20-year-olds.

Age

Adding a 20-year-old driver to a parent’s auto insurance policy increases costs because insurance companies view inexperienced drivers as a high risk. You may not be able to avoid higher rates, but your young driver can take steps to soften the financial blow. For instance, if the young driver has been licensed for a few years and has a clean driving record, they may be eligible for a good driver discount to help reduce rates.

Gender

Young adult males are the source of more auto accident claims than females. Because car insurance companies make rate decisions based on claims they’ve paid, auto insurance is more expensive for young men.

Related: How Age and Gender affect Car Insurance Rates

Location

Location-related factors that often influence car insurance prices include:

• The frequency of auto accidents.
• The frequency of claims related to auto theft and vandalism.
• The cost of vehicle repairs, including parts and labor.
• The cost of medical care, which affects how much insurers must pay for injury claims.
• Weather and disaster claims such as hail and floods.

Type of car

Including collision and comprehensive insurance as part of your car insurance policy means your insurer will pay for claims related to damage to your vehicle from crashes, hitting a tree, striking an animal, car theft and more. If your vehicle is more expensive to repair or replace than other cars, the additional cost is considered when your collision and comprehensive coverage rates are calculated.

What Car Insurance Discounts Are Available for 20-Year-Olds?

You may not find a lot of car insurance discounts for 20-year-olds because they’re still perceived as risky drivers. But it’s worthwhile to check because your young adult driver may be eligible for student car insurance discounts.

Good student discount

A “good student discount” is a no-brainer if your 20-year-old driver qualifies. But you may have to ask for it, or your car insurance company won’t know to add it.

Good student discounts net an average savings of 4%, based on a Forbes Advisor analysis of large auto insurance companies.

The eligibility rules for a good student discount can vary by company. Usually, the student must be within a certain age range, going to high school or college full-time, and receiving good grades.

Generally, “good student” can mean any one of these:

• Grade average of B or better.
• Average of 3.0 or better.
• In the upper 20% of their class.
• On the Dean’s List, Honor Roll or comparable listing.
• In the upper 20% of a national standardized test within the past 12 months, such as the SAT or ACT.

Student away from home discount

You may be able to receive an additional discount if your 20-year-old attends college away from home. Our research finds “Student away from home discounts” have an average savings of 8%.

To qualify for a student away a discount, your 20-year-old must meet certain requirements, which can vary by auto insurance company. Basic qualifications for the discount normally include:

• Student attends and resides at a school more than 100 miles from home; and
• The car stays at your home while the student is away at school; and
• The student only drives the car when home during school holiday periods and vacations.

Discount for a driver training class

This discount is less common but can be worth the effort. If your insurance company offers it, your 20-year-old can complete an approved driver training program to earn a training discount. Make sure your insurer approves the course for the discount before starting it.

Related: Affordable Car Insurance for College Students

Can a 20-Year-Old Get Their Own Policy?

Yes, 20-year-olds can get their own car insurance policies. A 20-year-old can own and register a vehicle in their name so they can also buy car insurance. If you own your car or live independently, then it’s typically time to get your own auto insurance policy.

Young adults who are first-time car insurance buyers should familiarize themselves with the various types of car insurance and how they work. This will let you choose the right coverages and limits for your situation.

If the 20-year-old does not own their car, lives at home and drives household vehicles, generally adding or keeping the young adult on the parent’s car insurance policy is a cheaper option.

How To Get the Cheapest Car Insurance Policy at 20

Here are tips for getting the cheapest car insurance for 20-year-olds.

Compare multiple quotes

The car insurance company that was cheap for parents may not be so affordable after adding a 20-year-old driver to the policy. When adding a new driver, it’s an excellent time to compare car insurance quotes to see where the best deals may be.

Seek out discounts

Explore good student discounts and price breaks for completing a driver’s education class. Also, speak to your agent or insurance company about other potential car insurance discounts families with a 20-year-old driver—or a 20-year-old driver on their own—could receive.

For instance, you may qualify for a multi-car discount if you buy a car for your 20-year-old and insure it on your policy. And, some car insurance companies offer a “generational” discount for children who buy a new policy from their parent’s insurance company. Another example: Drivers under age 25 who complete 40 hours of volunteer work annually for a non-profit can qualify for a “young volunteer” discount from the American Family.

Raise your deductibles

When you buy collision and comprehensive insurance, you pick a deductible. You can save money by raising your car insurance deductible. Our analysis shows you can save an average of 11% by raising your deductible from $500 to $1,000.

Choose an affordable car to drive

The cost of collision and comprehensive insurance will be less if your car is cheaper to repair or replace. You want a safe, reliable vehicle for your teen driver, but to keep car insurance rates affordable, avoid luxury cars and sporty cars.

Shopping for cheap car insurance at the same time as you shop for a car for your young adult will help you find the best car and auto insurance policy for your budget.

Carefully consider coverage amounts

You may be considering cutting back on car insurance coverage to save money. But if you have a 20-year-old driver this is no time to skimp on auto insurance coverage. Teen and young adult drivers are more likely to be involved in car accidents, so your chances of needing good car insurance due to claims are higher.

Shop for cheap full coverage car insurance with higher liability coverage limits. That will provide more protection if your young driver hits someone and also covers damage to your car with collision and comprehensive coverage.

Average Car Insurance Cost by State for 20-Year-Olds

Average Car Insurance Cost by Gender for a 20-Year-Old

Male 20-year-olds are more likely than females of the same age to be in auto accidents and file claims, so they cost more to insure. Parents adding a male driver age 20 to their policy pay 32% more than they would if including a female driver age 20 on their coverage.

Average annual car insurance cost for 20-year-old drivers on a parent policy

Average annual car insurance cost for 20-year-old drivers on their own policy

Males buying their own auto insurance policy pay 19% more a year on average than their female counterparts.

Methodology

We used data from Quadrant Information Services, a provider of insurance data and analytics. Rates are based on parents and a 20-year-old driver with clean records insuring a new Toyota RAV4 with $100,000 in bodily injury liability coverage per person, $300,000 per accident and $100,000 in property damage liability (together known as 100/300/100), uninsured motorist coverage, and collision and comprehensive with a $500 deductible.