Young drivers should always get several quotes before committing to an auto insurance policy. Although motorists under 30 tend to pay more for car insurance than older drivers, policy premium costs vary dramatically based on geography, driving record, company, and other factors. Insurance companies charge more for younger drivers based on their higher risk for accidents, according to data from the AAA Foundation for Traffic Safety reported by the Nerd Wallet blog.
How Much Is Car Insurance for a 24-Year-Old Driver
At age 24, drivers pay an average of $300 a month or $3597 annual for car insurance. This represents a decrease of $250 compared to the cost for an average 23-year-old, but about $400 more than insurance for the average 25-year-old.
GEICO, USAA, and Erie provide the most affordable auto insurance for young drivers according to Value Penguin. The website notes that Erie charges $1472 per year for 24-year-old drivers on average, compared to $1747 for USAA and $2266 for GEICO. Allstate, the most expensive company on average for young drivers, charges the average 24-year-old nearly $5600 for an annual policy.
The website The Zebra reports that although 24-year-olds still have higher average insurance rates than older drivers do, they pay significantly less than 18-year-old drivers. This age group pays about $3500 more a year for the average policy than the cost for motorists in their 20s.
Average 24-Year-Old Driver Auto Insurance Cost by Gender
Gender also plays a role in the average auto insurance cost. A 24-year-old woman will pay an average of $3493 per year compared to about $3702 for a man of the same age. However, the blog NerdWallet notes that considering gender in the cost of auto insurance is prohibited by state law in Michigan, Pennsylvania, North Carolina, Montana, Massachusetts, Hawaii, and California.
Average 24-Year-Old Auto Insurance Cost by State and ZIP Code
Value Penguin and The Zebra report the average annual premiums for a 24-year-old in these states:
- California: $2460
- Florida: $4295
- Georgia: $3460
- Illinois: $2895
- Michigan: $10,464
- New York: $3270
- North Carolina: $1592
- Ohio: $2187
- Pennsylvania: $2307
- Texas: $3079
Twenty-four-year-olds in the cheapest state, North Carolina, pay lower than 50 percent of the overall U.S. rate for this age group. Michigan charges its twenty-something drivers the most, about 300 percent of the national average.
Even within the same state, your quoted insurance premium can vary significantly based on your ZIP code. You can also expect to pay higher car insurance rates if you live in a designated flood zone.
Full-Coverage Policies by Age and Gender
CarInsurance.com reviews how the cost of the average auto insurance policy changes by age and gender:
- Age 16: $6055 female, $6858 male
- Age 17: $4871 female, $5562 male
- Age 18: $4206 female, $4859 male
- Age 19: $3087 female, $3567 male
- Age 20: $2769 female, $3195 male
- Age 21: $2298 female, $2609 male
- Age 22: $2152 female, $2378 male
- Age 23: $2005 female, $2202 male
- Age 24: $1896 female, $2068 male
- Age 25: $1719 female, $1801 male
- Age 30: $1588 female, $1581 male
- Age 35: $1573 female, $1556 male
- Age 40: $1544 female, $1529 male
- Age 45: $1528 female, $1516 male
- Age 50: $1451 female, $1445 male
- Age 55: $1421 female, $1419 male
- Age 60: $1414 female, $1415 male
- Age 65: $1452 female, $1463 male
- Age 70: $1527 female, $1546 male
- Age 75: $1666 female, $1736 male
- Age 80: $1831 female, $1957 male
In explaining the gender discrepancy in auto insurance rates, Nerd Wallet reports data from the Insurance Institute on Highway Safety. The agency found that male teen drivers are nearly 200 percent more likely to have a fatal crash than female teen drivers. Male drivers of all ages have a 63 percent higher risk of a fatal crash compared to female drivers.
The Impact of Driving History
You can expect your premium to increase if you have moving violations or accidents in your past. You will pay $335 to $460 more for auto insurance with a speeding ticket, $767 more for an at-fault accident, and at least $1000 more per year for driving under the influence, racing, or reckless driving.
Strategies for Young Drivers To Save
If your parents are willing to keep you on their policy in your 20s, you can save significantly by sharing insurance with an older, more experienced driver.
Many companies offer discounts for drivers who have no history of accidents or claims, have good credit, or have good grades. For example, drivers who have a credit score in the 800s are much less likely to file an auto insurance claim than drivers with a score in the 500s, who therefore cost more to insure. However, insurance companies cannot consider your credit score when issuing quotes for coverage in Massachusetts, Hawaii, or California, who consider this a discriminatory practice.
Good student discounts may apply if you are younger than 25 and have proof of a grade-point average of at least 3.0. Many insurance companies provide a discount if you take an approved defensive driving course.
Buying a practical vehicle can lower your insurance premium. You’ll pay an average of $844 per year to insure a van, $865 for a truck, or $967 for a standard car compared to $1145 for a luxury sedan.
Think about bundling your policies if you rent an apartment or own a home. A renter’s insurance policy covers your belongings from loss and protects you from legal responsibility if an accident occurs on your property.
The Money Under 30 blog recommends selecting from its list of the best auto insurance companies for young drivers. With the Gabi app, you can get quotes from up to 20 different companies. You can purchase your insurance through the platform and it will automatically notify you when you can get a better deal. The blog also recommends Liberty Mutual because of its high ratings for customer service.
Every auto insurance company uses its own method to assess risk. If you have concerns about the cost of car insurance because of your age, shop around with different companies until you find a quote that fits your budget.
Sources:
https://www.nerdwallet.com/article/insurance/car-insurance-rates-age-gender
https://www.thezebra.com/auto-insurance/driver/age/car-insurance-24-year-olds/
https://www.carinsurance.com/average-rates-by-age.aspx
https://www.moneyunder30.com/best-car-insurance-for-young-adults
https://www.caranddriver.com/long-term-road-tests/
https://www.caranddriver.com/shopping-advice/a22563787/best-first-cars/
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