Cheap Car Insurance for 21-Year-Olds
State Farm, Geico and USAA have the cheapest car insurance for 21-year-olds among large companies.
Depending on where you live, though, you may find cheaper rates from a regional company like the Farm Bureau or Mercury.
How much is car insurance for 21-year-olds?
The average cost of liability car insurance for 21-year-olds is $123 a month, or $1,471 a year. Full-coverage car insurance rates average of $314 a month.
These high rates make it important to compare car insurance quotes and shop around to get the best price for you.
Cheapest car insurance for 21-year-olds
State Farm has the cheapest liability car insurance for most 21-year-olds, charging an average of $102 a month, or $1,219 a year. It also has the cheapest full-coverage rates, charging $240 a month, or $2,882 a year.
USAA is cheapest overall — however, it’s only available to the military community.
Cheapest large insurance companies for 21-year-olds
| Company | Annual rate liability only | Annual rate full coverage |
|---|---|---|
| State Farm | $1,219 | $2,882 |
| Geico | $1,293 | $3,401 |
| Progressive | $1,484 | $4,258 |
| Travelers | $1,717 | $4,247 |
| Allstate | $2,158 | $4,772 |
| Farmers | $2,184 | $5,751 |
| Nationwide | $2,594 | $5,393 |
| USAA* | $827 | $2,009 |
Liability insurance covers injuries and damage you cause to others in a car accident. It’s required by law in most states.
Full coverage includes collision and comprehensive (comp), which cover damage to your own car. Neither collision nor comp is required by law — however, you usually need both for a car loan or lease.
Cheapest regional companies for 21-year-olds
Farm Bureau, Mercury and Country Financial are the cheapest regional insurance companies for 21-year-olds.
Farm Bureau’s rates average $905 a year for liability insurance and $2,400 a year for full coverage. Unfortunately, the Farm Bureau does not offer car insurance in every state.
Mercury has the next-best rates for 21-year-olds, but it’s only available in 11 states. Country Financial is in 19 states.
| Company | Liability annual rate | Full coverage annual rate |
|---|---|---|
| Farm Bureau | $905 | $2,400 |
| Mercury | $991 | $3,126 |
| Country Financial | $1,040 | $2,642 |
| Safety | $1,059 | $2,968 |
| Safeway | $1,204 | $3,303 |
| Auto-Owners | $1,457 | $3,400 |
Car insurance costs for 21-year-old males vs. females
The average cost of car insurance for a 21-year-old male is $3,915 a year for full coverage, or $326 a month. This is 8% higher than the average rate for 21-year-old female drivers.
At age 21, female drivers have lower crash rates than male drivers. This is the main reason why 21-year-old female drivers pay less for car insurance than male drivers in many states. A few states don’t let insurance companies use a person’s gender to determine their rate.
Among large companies, State Farm has the cheapest car insurance for 21-year-old male drivers and female drivers. Farm Bureau is the cheapest regional company for both genders.
Car insurance rates for 21-year-olds by gender
| Company | Annual rate (men) | Annual rate (women) |
|---|---|---|
| Farm Bureau | $2,619 | $2,180 |
| Country Financial | $2,711 | $2,574 |
| State Farm | $3,118 | $2,646 |
| Safeway | $3,655 | $2,951 |
| Auto-Owners | $3,635 | $3,166 |
| Geico | $3,485 | $3,318 |
| Progressive | $4,443 | $4,074 |
| Travelers | $4,365 | $4,129 |
How much is insurance for a 21-year-old with a sports car?
A sports car can drive up the cost of auto insurance for a 21-year-old by a significant amount.
The actual price you pay will depend largely on the make and model of your sports car. A Ford Mustang costs an average of 17% more for a 21-year-old to insure than a Honda Civic. A Porsche 911 costs 74% more to insure than a Honda.
Insurance rates for a standard car vs. sports car
| Vehicle | Annual rate full coverage |
|---|---|
| Honda Civic EX | $3,766 |
| Ford Mustang | $4,388 |
| Porsche 911 | $6,555 |
Insurance companies don’t paint all sports cars with the same brush. They evaluate each vehicle’s value and crash statistics to determine how risky it is to insure.
If you’re shopping for a car, you can usually get quotes for each of the different vehicles you are considering before you buy one.
Money-saving car insurance tips for 21-year-olds
A 21-year-old can save money on car insurance by shopping around, looking for discounts and adjusting coverages.
Along with your age, insurance companies look at several other factors to determine your rate. These include:
- Your driving record
- Your credit
- Your ZIP Code
- The amounts of insurance you need
- Any car insurance discounts you may be eligible to receive
Each company weighs these factors differently and offers different discounts. This makes comparing quotes a good way to find the cheapest price.
Car insurance discounts for 21-year-olds
The high price of car insurance for 21-year-olds makes discounts particularly important. The discounts that can save you the most are for bundling, safe driving programs and good grades.
Bundling
Most companies offer a generous discount for bundling your car insurance with your home or renters policy. Get quotes for both policies, and any others you need, from each company. This lets you compare companies by the combined rate they can each offer. Even if one company charges a little more for car insurance, its renters rate may be low enough to give you a net savings.
Safe driving programs
You can often score a big discount by signing up for an insurance company’s safe driver program. These programs typically monitor your driving with a smartphone app. If you drive safely enough, you get future discounts when you renew.
Good grades
Many companies offer a good-student discount to 21-year-olds with good grades. You can be in college or another institute of higher learning to qualify. You usually need a B average, but some companies only require a B- average for the discount.
The amount you save will depend on the company. For example, Geico offers a 15% discount to good students — meanwhile, good students save an average of 10% with Progressive.
Car insurance coverage for a 21-year-old
The amount of car insurance you need at age 21 will depend on a few factors. Here’s how to figure out how much car insurance is right for you.
- Your state’s minimum insurance requirements may be all you need if you have an entry-level wage and low-value car. These minimum requirements vary by state.
- You typically need to add collision and comprehensive to your car insurance for a loan or lease. These coverages are usually also worth it for any car worth more than $5,000 with no loan or lease.
- Consider higher-than-minimum liability limits if you earn a high salary or have a high net worth. Higher liability limits provide more protection for your savings and future earnings.
Why is car insurance for 21-year-olds so expensive?
High crash rates are the main reason why car insurance is so expensive for 21-year-olds. Drivers in their early 20s have higher crash rates than every other age group except teens.
Crashes cost car insurance companies money in the form of claims payments. Insurance companies account for these costs with higher rates for riskier drivers.
A 25-year-old pays an average of 29% less for car insurance than a 21-year-old. A 35-year-old pays 37% less.
Your car insurance usually becomes more affordable as you age, as long as you avoid tickets and accidents. Drivers in their 30s have lower crash rates than those in their 20s. Older drivers also often qualify for discounts that most 21-year-olds can’t. These include discounts for being married and owning a home.
Car insurance rates by driver age
| Age | Annual rate full coverage |
|---|---|
| 18 | $6,880 |
| 21 | $3,766 |
| 25 | $2,686 |
| 35 | $2,391 |
Frequently asked questions
A 21-year-old usually needs to live at home or be away at college to stay on their parent’s car insurance. A 21-year-old living on their own usually needs their own car insurance, unless a parent owns or co-owns their vehicle. The policies on this vary by insurance company.
Your car insurance rates usually keep going down through your mid-30s if you avoid tickets and accidents. You’ll still see your rate go down in gradual amounts after you turn 35. However, if you get a fancier car or more coverage, your rates usually go up.