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Published: Jul 05, 2023 18 min read

Finding the right car insurance can be daunting as a teenager. Not only do you have to consider the cost, but you also want to ensure you're getting the best coverage for your needs. As a teen, you’re a high-risk driver because you don’t have much experience behind the wheel. This makes finding the right insurer even more important.

In this article, we analyze the best cheap car insurance companies for teens, whether you’re purchasing your first policy, joining your parent’s plan or switching car insurance providers.We’ll look at various factors, including cost, coverage options, customer service and more, to help you decide which company is the best fit for you.

The 6 Best Cheap Car Insurance for Teens Reviews

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Pros
  • Extended roadside assistance
  • Discounts for earning good grades, completing the teenSMART driver education program and living 100+ miles away from home
  • A+ Better Business Bureau rating
Cons
  • Recalculates premiums every six months so your rates may increase more often

Why we chose it: We chose Allstate for teens living away from home because the e Better Business Bureau (BBB) gives it an A+ ,which is the highest rating. It also offers numerous discounts catered to teens including the student away at school discount for teens who move at least 100 miles away from home. These discounts can make it more affordable to maintain your auto insurance coverage when you’re living far away from home.

Additional car insurance discounts are available for teens who complete the teenSMART driver education program.

The company also provides Roadside Rescue services as part of their teen coverage. If you need assistance, you can use the Allstate mobile app 24/7 to request services such as towing, tire changes, jump starts and more. The app also allows you to track how far away the roadside assistance services are.

Allstate differs in that it only offers auto insurance policies in six-month terms, where other insurers offer annual policy options. That means your rates are recalculated twice per year. This can be good or bad, as your premiums may increase or decrease depending on your driving behavior and other factors. A six-month insurance term may be a downside if you prefer consistency in your budget.

Pros
  • Comprehensive discounts for teens with safe driving habits and good grades
  • A++ Financial rating from AM Best, which is the highest score
  • High JD Power scores for customer satisfaction
Cons
  • You must work with an insurance agent to finalize your policy
  • Doesn't offer special coverages like accident forgiveness and gap insurance

Why we chose it: State Farm offers numerous discounts for teen drivers. It claims the discounts can easily save 15-25% or more on your premium. The range and depth of discount opportunities makes it the stand out choice in this category.

The Steer Clear program allows teens to lower their insurance premiums by completing a safe driving course and five hours of monitored driving practice, all using the mobile app.

In addition, if you earn good grades, State Farm claims you can get up to 25% off your premiums. Plus if you’ve been free of at-fault accidents and moving violations during the past three years, you can save up to 15%.

State Farm is one of the oldest insurers in the country and is well respected for properly processing claims and providing a good customer experience.. It has an A++ rating from AM Best, meaning the company is in good condition financially and you can be confident State Farm pays out claims consistently. To top it off, the company has above average J.D. Power scores for customer satisfaction in 10 out of 11 markets.

On the downside, you must work with an agent to finalize your coverage. You can start the process of securing auto insurance online, but you’ll need to work with someone to complete enrollment. This is a con if you prefer to do everything online. Also, State Farm doesn’t offer some special coverage options like accident forgiveness and roadside assistance.

Pros
  • Offers top-rated customer service
  • Cheaper than the competition
  • Fewer customer complaints than the average insurer
Cons
  • Only available to current or former members of the U.S. military and their families
  • Teens can't get a policy if their parents aren'tUSAA customers

Why we chose it: USAA is often considered the gold standard for customer service in the United States. Because of its focus onU.S. military members the company\ can closely tailor its services to customer needs.

The fact that USAA only serves military members, veterans and their families is both a pro and a con. It’s a pro if you're in a military family; however, non military families view it as a con because they can’t access USAA’s cheap rates and outstanding customer service.

The National Association of Insurance Commissioners (NAIC), which measures customer service statistics in the industry, reported USAA had a customer complaint index of 0.85 in 2022. This means the company had 15% fewer customer complaints than the industry average. USAA also offers multiple discounts for teens, including those for defensive driving course, good student and USAA SafePilot program.

Unfortunately, teens who aren’t in the U.S. military can’t purchase their own policy if their parents were never USAA members. This is true even if their parents are currently in active duty or are veterans.

Pros
  • Often cheaper than the competition
  • Good financial stability
  • Low number of customer complaints
Cons
  • Only write services in 19 states
  • No accident forgiveness options

Why we chose it: COUNTRY Financial is a great option if you’re looking for affordable auto insurance coverage. tIts rates are lower than the national average in most categories, so its low premiums combined with discounts can reduce the financial hassle of securing insurance as a teen.

According to the NAIC, COUNTRY Financial receives 71% fewer customer complaints than its competitors.

Additionally, the insurance credit rating agency AM Best gives it an A+ rating for financial stability, which is the second to highest score it can receive .Financial stability is an important factor when evaluating a car insurance provider because it indicates the insurer can afford to pay out any claims when necessary.

COUNTRY Financial is a great cheap car insurance option for teens in the states where it’s available. Currently, it offers auto insurance in these 19 states:

  • Alabama
  • Alaska
  • Arizona
  • Colorado
  • Georgia
  • Idaho
  • Illinois
  • Indiana
  • Iowa
  • Kansas
  • Minnesota
  • Missouri
  • Nevada
  • North Dakota
  • Oklahoma
  • Oregon
  • Tennessee
  • Washington
  • Wisconsin

Pros
  • Numerous add-on coverage options for better protection
  • Affordable rates for young drivers
  • Various discount options for teens
Cons
  • More customer complaints than average
  • Doesn't offer rideshare coverage, new car replacement or a vanishing deductible

Why we chose it: GEICO offers a wide range of coverage options, including a unique mechanical breakdown policy. This option provides parts and systems coverage at a cheaper rate than a standard extended warranty. Roadside assistance, accident forgiveness and rental car reimbursement are also available.

To save on insurance, you can take advantage of the discount options available for teens including:

  • Good driver discount
  • Good student discount (must maintain a B average or higher)
  • Discounts for alumni associations and other college organizations in select areas

Unfortunately, according to the NAIC, GEICO has a score of 1.33. Since the industry average is 1, that means it receives more customer complaints than most insurance companies. On the BBB website, customers complain about not being able to get in touch with a customer service representative who can help them and about unreasonable rate hikes.

While GEICO does have great coverage options, it doesn’t offer rideshare or new car replacement options.

Pros
  • Lower than average rates for teens joining their parents' policy
  • Strong financial rating
Cons
  • Accident forgiveness can only be used once per policy
  • No new car replacement coverage available

Why we chose it: Nationwide is an excellent option for teens joining their parents’ insurance policy. It offers below average rates allowing you to save on your coverage. Add good student, safe driver and defensive driving discounts to the mix and you can save even more.

Nationwide also has a large and reputable insurance provider with a strong financial background— Fitch Ratings currently affirms a credit rating of “A-.” This means you can be confident it’ll be able to pay out your claims in the event of an emergency.

Unfortunately, while Nationwide offers accident forgiveness, it's only available in some states. Also, it can only be used once, even if there are multiple drivers on the policy.

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Other Cheap Car Insurance for Teens We Considered

While these insurers didn’t make our top pick, they may still be worth considering. We excluded them because they’re only available in a few states or are missing certain essential features for teen drivers, such as a defensive driver discount.

Erie

Pros
  • Cheap for young drivers
  • Good reputation for quality customer service
  • Fewer customer complaints than competitors
Cons
  • Only available in 12 states and Washington DC
  • No roadside assistance

Teens buying coverage with Erie may find that they pay significantly less than the national average. The company has a good reputation for quality customer service and has a low number of customer complaints — 52% less than the average, according to the NAIC. However, Erie only services drivers in 12 states: Illinois, Indiana, Kentucky, Maryland, New York, North Carolina, Ohio, Pennsylvania, Tennessee, Virginia, West Virginia, Wisconsin — and the District of Columbia It also doesn’t offer some basic coverages you may want as a teen like roadside assistance.

Progressive

Pros
  • History of financial stability
  • Good range of coverage options
Cons
  • Can be expensive for teen drivers
  • Doesn't offer defensive driving discounts

Progressive is a middle-of-the-road insurance company with average rates, good coverage options and solid financials that's available in nearly every state. It offers various add-ons but doesn’t offer discounts for taking a defensive driving course, which can make coverage more expensive as a young driver.

American Family

Pros
  • Cheaper than average for young drivers
  • Variety of discount options
  • May charge lower premiums for drivers with past violations than competitors
Cons
  • Only available in 19 states
  • Customers raise concerns about customer service responsiveness

American Family Insurance provides coverage that’s often cheaper than the competition and several types of discounts, especially for young drivers or drivers with violations. However, the company only serves customers in 19 states, and many verified customers on the BBB website complain of trouble with getting a response from customer service representatives.

Cheap Car Insurance for Teens Guide

Factors that influence car insurance rates

Several factors can impact the cost of car insurance for teens. These include coverage limits, along with your age, driving history, location and the type of vehicle you drive. Understanding these factors can help you and your parents better evaluate car insurance companies and find the best coverage for your needs.

Driving age and experience

Various factors, including age, can heavily impact teen car insurance rates. According to the Insurance Institute for Highway Safety, the fatal crash rate for 16 to 19-year-olds is nearly three times higher than that of drivers 20 and older. That’s because younger drivers have less driving experience and are more likely to cause accidents. As a result, teen insurance premiums can be significantly higher than those of older drivers.

Insurance companies also consider your driving history when determining premiums, as it provides insight into how responsible and safe you are on the road. A teenager with a clean driving record may be eligible for lower premiums. On the other hand, if you have a history of accidents or traffic violations you should expect to pay higher premiums, because you're at higher risk of being in an accident.

You must be mindful of your driving habits to avoid accidents and traffic violations. This can help keep your premiums low and ensure you aren’t paying more for your insurance than necessary.

Location

Where you live and drive can significantly impact your r car insurance rates. Insurance companies consider the risk level of the area where you’ll drive and park your vehicle when determining premiums.

If you live in a densely populated urban area with high traffic levels and more accidents on average,your premiums may be higher.

Factors such as the number of cars on the road, the prevalence of pedestrians and the location's crime rates can all impact car insurance premiums.

On the other hand, if you live in a rural area with less traffic,fewer accidents, and lower crime rates, your premiums may be lower. That’s because the risk of being in an accident or having a vehicle vandalized or stolen is generally lower in these areas.

Vehicle type

The type of vehicle you insure can significantly impact your car insurance rates as well. Insurance companies consider various factors including how likely the vehicle is to be stolen, the cost to repair or replace it, safety equipment and overall safety record.

For example, sports cars and high-performance vehicles are often more expensive to insure. That’s because the drivers who purchase them are more likely to speed and engage in dangerous driving behavior which causes accidents, according to industry experts. On top of that, these cars are more expensive to repair or replace when you file a claim. On the other hand, some vehicles are more affordable to insure such as crossover SUVs, sedans and hatchbacks.

How to save on car insurance for teens

Take a defensive driving course

Taking a defensive driving course can be a great way to save on your car insurance. These courses teach valuable skills and techniques for safe driving, which can help reduce the risk of being in an accident.. Keep in mind that not all insurance companies offer a defensive driving discount and some only offer them to certain populations, like senior drivers. So be sure this is an option with your insurer.

Defensive driving courses cover various topics, including how to anticipate and avoid dangerous situations on the road, properly handle adverse weather conditions and effectively communicate with other drivers. These courses are available online or in a classroom setting and typically last several hours to a full day.

To qualify for a defensive driving course discount, you need to provide proof of completion to your insurance company. Before completing your course, be sure it meets your insurance company’s qualifications. The discount may vary depending on the insurance company, but the average savings is up to 10%.

Remain on your parents’ policy

Another way to save on car insurance as a teen is by joining your parent or guardian’s existing auto insurance policy.

While it’ll be more affordable to join their policy than getting a separate plan, keep in mind that everyone’s premiums will increase because you lack experience behind the wheel.However, insurance companies often offer discounts for having multiple cars or drivers on the same policy, which can help offset some of the cost.

Try to earn a student discount

Most insurance companies offer discounts to students who maintain good grades throughout the school year. The good student discount rewards you for your academic performance.

To qualify for a good student discount, you need to meet specific criteria set by the insurance company. This may include maintaining a certain grade point average (typically a 3.0), and being under a certain age (typically 21 or 25 years old). The discount will vary depending on the insurer, but you may save up to 25% on your premium.

Only pay for the coverage you need

To save on your premium, consider looking at your coverage. You want to find a balance between meeting state minimum requirements, protecting yourself and affording your premium.

When deciding which type of car insurance coverage to purchase, consider your needs and desired protection level. You need to meet state minimums and any requirements by your lender if your car has a lease or loan. Beyond that, it’s often a good idea to purchase both collision and comprehensive insurance and increase your liability limits beyond the state minimum.

It's also wise to review your coverage periodically to make sure it still meets your needs. As your circumstances change, you may choose to adjust your policies.

Choose an affordable, no-frills vehicle

The type of vehicle you insure can also impact your premiums. An affordable, no-frills car will be less expensive to insure than a sports car or high-performance vehicle. Insurance companies consider certain vehicles riskier to insure due to their high value, performance capabilities or likelihood of being stolen. As a result, certain cars are more expensive to insure like the Tesla Model S, Dodge Challenger and BMW 7 Series.

Best Cheap Car Insurance for Teens FAQ

Why do teens pay more for car insurance?

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Insurance companies consider younger drivers to be higher-risk policyholders due to their lack of driving experience and the increased likelihood of being in an accident. As a result, teens may pay more for car insurance than older, more experienced drivers. However, you should see your premiums drop as you age and gain more experience at the wheel, provided you maintain a good driving record.

How much is full coverage car insurance for teens?

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The cost of full coverage car insurance for teens can vary significantly depending on various factors, such as your age, driving history, location and vehicle you drive. . To accurately estimate how much you might pay, it's best to get quotes from multiple insurance companies.

How much does car insurance increase after a teen is in an accident?

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Car insurance premiums often increase after an accident. This is true for teens as well and more experienced drivers. How much a premium increases will depend on the specific circumstances of the accident and whether the teenager was at fault. However, the average increase after a claim is $767 according to Car and Driver.

How We Chose the Best Cheap Car Insurance for Teens

When selecting the best cheap car insurance companies for teens, we reviewed several factors to ensure we provided an accurate representation of the best options on the market.

  • Overall value: We chose insurance companies that provide good coverage at an affordable price. Discount availability was another consideration because discounts can help teens save on their car insurance.
  • Customer service: Good customer service is essential because you may have questions or need to file a claim at some point. We included insurance companies with a reputation for providing helpful and responsive customer service.
  • Availability across states: Some insurance companies only write policies in specific states, so we made sure to recommend options that are widely available across the country.
  • Reputation: We looked for insurance companies with a history of stability, financial strength and a good track record for handling claims and paying out benefits on time.

Summary of Best Cheap Car Insurance For Teens