How Much Is Car Insurance For a 21 Year Old?

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How Much Is Car Insurance For a 21 Year Old?

Everyone knows that teen drivers pay exorbitant rates for auto insurance, but how much is car insurance for a 21 year old? It might seem unfair, but younger drivers under 25 pay the highest rates for auto insurance coverage. 

Do insurers start lowering rates once someone gets into their 20s? This article will go over rates for 21-year-old motorists and tips on how these young drivers can get cheaper coverage.    

Rates Drop a Bit once a Driver enters their 20s

Searching for affordable auto insurance for a 21-year-old isn’t nearly as hard as finding cheap car insurance for a teen. The average annual auto insurance premium for a 16 or 17-year-old can be well over $5,000, with insurers charging as much as $8,500 per year just to insure these high-risk motorists.

Thankfully, by the time your child reaches their twenties, you should begin to see your policy rate decrease, so long as they are a safe driver without any tickets. If you’re curious about how much car insurance is for a 21 year old, you’ll find that there are deals out there if you do your research and compare multiple quotes. 

How much is car insurance for a 21 year old per month?

The average nationwide rate for 21 year old drivers is about $385 a month or $4,620 per year. That’s almost $400 a month, and many young drivers can’t afford that rate and get furious once they find out a 40-year-old is paying less than half that. 

With some diligent research and comparison shopping, most young drivers can get their rates under $300 a month. It all starts with comparing rates. To check rates in about five minutes, enter your zip code to get started.

Safe Drivers pay the Lowest Car Insurance Rates    

Many insurance companies are more than happy to do business with you. It’s especially true if you:

  • Have a pretty good driving history
  • Have previously been insured
  • Are you currently or have been furthering your education
  • Have established a good credit history
  • Drive less than 800 Miles each month 
  • Drive a used vehicle that is lower in performance

The truth is that with every birthday, insurance companies see you as having another year of driving experience. So, it is always a good idea to check out car insurance rates by age chart each time you blow out another candle.

Car Insurance For a 21 Year Old

Prices for Teen Auto Insurance Coverage Keeps Going up

Teens behind the wheel of a car take more risks than older drivers and thus get into more wrecks. In the past several years, insurers have had to price distracted driving into the equation, leading to rates skyrocketing for many younger drivers. 

The non-responsible drivers under 25 that get into accidents while on the phone or texting are causing rates to rise for responsible drivers. While it’s not fair, it’s the reality until more people stop driving distracted.  

Rates that a young driver pays are based on many factors. A few are: 

  • Insurance company
  • Driving history
  • Type and Market Value of the vehicle being Insured
  • Type of coverage you need
  • Credit score

Even gender and education level can cause one 21-year-old’s policy to differ from another. Why is this? Even though they are no longer a teen driver, 21-year-olds are still seen as a significant risk to insurance carriers. This happens most often because data proves they are more likely to receive a traffic citation or be involved in an accident.

Why do Young Motorists Pay So Much for Car Insurance?

As mentioned above, this age group is at high risk of being involved in an accident. 21-25-year-olds account for around 13.7% of all fatal traffic accidents. The only age groups with a higher risk of being involved in a deadly crash are drivers under 20 years old and over the age of 65. Considering this information, it’s no surprise that insurers will charge higher rates for these age groups. 

Many teens are forgoing auto insurance altogether because of the costs involved and taking ridesharing services like Uber and Lyft. Other teens just drive their parent’s vehicles, even if they are not on the policy, which is a significant risk.

Tips for Lowering the Insurance Rate for a 21-Year-Old Driver

Fortunately, there are several things you can do to help decrease the cost of your policy. They include:

1. Opt for a higher deductible

The higher your deductible is, the lower your monthly insurance payment will be. (A deductible is an amount you will pay out of pocket if you are involved in an accident. Once this amount has been met, the insurance company will pick up the cost.) Today, you can choose to have a deductible as high as $1,000 to $2,000, which can have a dramatic impact on your premium.

2. Go to school and keep your grades high

Insurance companies love to see younger people stay in and excel at school. In fact, they like it so much that they usually offer a discount to students who maintain a 3.0 GPA or higher. They may require that you provide them with copies of your grades each semester. The effort involved with doing this is a small price to pay compared to what you may save.

3. Choose your car wisely

It’s a fact. Some vehicles just cost more to insure, such as fancy sports cars and tricked-out SUVs. Again, insurance companies view these vehicles as a higher risk, meaning they will charge you more just for driving them. It’s best to wait until you are 25 or older before giving into your dream of owning a luxury or fast car. Until then, stick to something more sensible, especially if you want to lower your insurance costs.

4. Don’t go too far from home

Living close to your home and school has its advantages. First, it cuts down on your gas costs. Second, insurance companies are likely to reduce your rate because they know that the closer you live to work and school, the less likely you will be involved in an accident. For example, if you have to drive 45 miles to work each day, you are on the road much longer than if you only lived 3 miles away. All this time on the road increases your chances of being involved in an accident.

5. Consider taking a driving class

Just because you took driver’s ed in high school doesn’t mean you can’t afford to brush up on your driving skills from time to time. Your insurance company is sure to appreciate it and may reflect that by giving you a small discount. If your school doesn’t offer a driver’s safety course, check around at local driving schools. You may end up paying a couple of hundred dollars to take the course, but you should make back the money spent in savings over the next few years.

6. Don’t even think about drinking and driving

Yes, you can legally drink at 21. However, drinking and driving is an entirely different situation that can have devastating consequences. Also, being caught for a DUI can result in your driver’s license being revoked or, at the very least, seeing a considerable increase in your car insurance rates. In some cases, the growth is as much as 50 to 60% for at least three years. If you don’t have a designated driver, always call someone to come get you. Don’t take that chance.

7. Stay on (or join) your parent’s policy

While you may crave independence, it isn’t always a good thing when it comes to average car insurance for a 21 year old. Your parent’s safe driving record is almost guaranteed to give you a lower rate than you would get on your policy. This is because insurance companies feel that your parents are taking some of the risks on your behalf, which translates to a lower premium. If you aren’t already on their policy, talk to your parents and see how adding them would affect their rate.

Don’t Forget to Shop Around for the Cheapest Car Insurance for a 21 Year Old

When it comes to finding the cheapest car insurance for a 21-year-old, shopping around is an absolute must. Some companies offer better rates to younger drivers than others, which you can take advantage of. 

Currently, USAA has some of the best rates for young drivers, with premiums as much as 50% lower than other providers. It’s important to note, though, you need to have a family member in the military to qualify with USAA coverage. Also, Erie Insurance has lower premiums for drivers under 25. 

Insurance rates change all the time, and this is why it’s so important to compare prices with at least ten insurers. Get quotes from multiple companies before deciding and using a car insurance cost calculator. 

So, are you still wondering how much is car insurance for a 21 year old? Start comparing quotes now by entering your zip code. Explore the lowest rates available and save on the coverage you need.