Cheap Car Insurance for 25-Year-Olds

What's the average car insurance rate for 25-year-olds?

Insurance gets cheaper when you turn 25 — at least for most drivers. While 25-year-old drivers do pay more than the national average, their premiums decrease by $170 per year just by virtue of turning 25 and no longer being designated as a "young driver." The average car insurance rate for a 25-year-old driver is $1,653 per year — about $138 per month or $827 for a standard six-month policy. However, your auto insurance rate can vary based on a number of factors.

Finding cheap car insurance is important at any age, so let's explore some ways to save on car insurance premiums — such as always comparing quotes — at the age of 25.

What is the cheapest company for a 25-year-old driver?

Based on our research, USAA and State Farm provided the most affordable auto insurance rates for 25-year-olds. In order to find the cheapest car insurance policy, we created a user profile for our methodology and gathered premiums from some of America's most popular companies, which you can see below.

How to find cheap car insurance at age 25

Avoid collision claims

Accidents happen — but that doesn't mean you need to file a claim. Depending on the value of damage, you can pay more in increased insurance premiums than out-of-pocket damages. For example, you live in Texas and damaged your vehicle while backing out of your driveway — no other vehicles involved. The out-of-pocket expenses are $1,400.

In 2020 in Texas, the average collision claim increased rates $747 per year. Because most insurance companies will increase your rates for three years after an accident (at minimum), you can expect that $801 to equate to $2,241 total. If you have a $500 deductible, the total expense of the accident is $2,741. If you had paid for the damage yourself instead of going through your insurer, you could have saved $1,341.

For more information, see our guide to auto insurance claims.

Reduce your coverage after 10 years of ownership

If your vehicle is 10 years or older or worth less than $4,000, consider dropping your collision coverage. This coverage is designed to protect the physical integrity of your vehicle, but if it isn't worth much you could be paying for coverage you do not need. You can determine the value of your vehicle by using Kelley Blue Book. If it's determined you do not need your collision coverage, consider keeping your uninsured/underinsured motorist coverage. This will cover any property damage done to your vehicle after an accident with an uninsured driver — for example, a hit and run. Furthermore, you should also keep your comprehensive coverage to prevent weather, animal and theft-related damage to your vehicle.

Double-check for discounts

Many discounts will be automatically added to your policy based on the VIN of your vehicle or your driving history. However, there are some you need to look or apply for in order to qualify. Below are some common auto insurance discounts.

• Safe driving
• Multiple drivers
• Multi-vehicle
• Safety features discount
• No claims discount
• Bank account autopay
• Paid in full
• Good student
• Telematics
• eSign
• Group participation/affinity membership discount
• Home insurance bundle
• Green vehicle discount
   

Participate in telematics programs

Telematics, or usage-based insurance providers, use the way you drive in order to determine your premium. Here, your driving habits can earn you a discount on your premium. By avoiding harsh braking, high acceleration speeds, and late-night drives, you can save on your auto insurance policy. 

Frequently asked questions