Auto insurance costs for teens are considerable because of the heightened risk these inexperienced drivers pose to insurers. Our analysis of 147 car insurance companies found that parents get an average increase of $2,182 a year when adding a teen driver to their auto policies—basically doubling their car insurance rates.
We evaluated costs, complaints, the availability of accident forgiveness and new car replacement coverage, and claim repair processes to assist you in identifying the best cheap car insurance for teens.
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Best Cheap Car Insurance for Teens and Young Drivers of November 2023
The Best Car Insurance for Teens and Young Drivers
- Erie – Best Rates for Adding a 16-year-old Teen Driver
- USAA – Best Overall Rates for Teens and Young Drivers
- American Family – Best for Low Level of Complaints
- Nationwide – Good for Drivers who Want To Try a Mileage-based Program
- Auto-Owners – Great Grade From Collision Repair Professionals
- Geico – Good for Young Drivers Buying Their Own Policy
The Cheapest Car Insurance for Teens and Young Drivers
The cheapest car insurance companies for teens and young drivers between ages 16 and 19 buying their own policy are:
- USAA – $4,350 a year
- Auto-Owners – $4,621 a year
- Geico – $4,761 a year
- Erie – $5,277 a year
- American Family – $5,346 a year
Best Cheap Car Insurance for Teens
Summary: Ratings of Car Insurance Companies for Teen Drivers Ratings
| COMPANY | FORBES ADVISOR RATING | AVERAGE COST FOR PARENTS AND A 16-YEAR-OLD | COMPLAINT LEVEL | LEARN MORE |
|---|---|---|---|---|
 Erie | 5.0  | $4,059 | High | Compare Rates Compare rates from participating partners via EverQuote's secure site. |
 USAA | 5.0 | $4,103 | Average | Compare Rates Compare rates from participating partners via EverQuote's secure site. |
 American Family | 4.5 | $5,663 | Very low | Compare Rates Compare rates from participating partners via EverQuote's secure site. |
 Nationwide | 4.5 | $4,502 | Very low | Compare Rates Compare rates from participating partners via EverQuote's secure site. |
 Auto-Owners | 4.0 | $5,412 | Low | Compare Rates Compare rates from participating partners via EverQuote's secure site. |
 Geico | 4.0 | $4,471 | Average | Compare Rates Compare rates from participating partners via EverQuote's secure site. |
 Travelers | 3.5 | $5,065 | Very low | Compare Rates Compare rates from participating partners via EverQuote's secure site. |
 Progressive | 3.0 | $5,088 | Low | Compare Rates Compare rates from participating partners via EverQuote's secure site. |
 State Farm | 3.0 | $5,034 | Low | Compare Rates Compare rates from participating partners via EverQuote's secure site. |
 Allstate | 2.5 | $8,296 | Low | Compare Rates Compare rates from participating partners via EverQuote's secure site. |
 Farmers | 2.5 | $7,349 | Low | Compare Rates Compare rates from participating partners via EverQuote's secure site. |
Cheapest Car Insurance Companies for Teen and Young Drivers
Cheapest Car Insurance After Adding a Teen Driver
USAA is the cheapest overall car insurance company after adding a teen driver, among the companies in our analysis. It costs an average of $3,360 a year with USAA after adding a teen driver between ages 16 and 19 to a parent’s policy.
USAA is only available to military members, veterans and their families, making Erie and Geico good choices for others looking for affordable rates when adding a teen driver to their policy.
Cheapest Car Insurance for a Teen Driver With Their Own Policy
USAA offers the cheapest car insurance rates for teens ages 16 to 19 who have a military connection and are buying their own policy. Auto-Owners and Geico are the cheapest companies for other teen drivers buying their own policy.
Cheapest Car Insurance for Teens by Age
- Erie is the cheapest car insurance company for drivers ages 16, 17 or 18 being added to a parent’s policy.
- Auto-Owners is the cheapest for teens ages 16, 17 or 18 who are buying their own policies.
- Geico is the cheapest company for drivers ages 19 who are either being added to a parent policy or buying their own.
USAA is a bit cheaper for teens and young drivers ages 17, 18 and 19 but is only available if you have a military connection.
Related: Car insurance for 16 year old
How Much Does Car Insurance Cost for Teen Drivers?
It costs an average of $5,367 a year for a car insurance policy for two parents and a 16-year-old driver, an increase of $2,419 over the average car policy cost for a married couple.
Average car insurance cost after adding a teen driver
Average cost of car insurance for teen drivers, by company
Related: Car insurance for 17 year old
How Much Does Car Insurance Cost for a Teen Driver with Their Own Policy?
Related: Car insurance for 18 year old
How Much Does it Cost To Add a Teen Driver in Your State?
Below you’ll see the average yearly increase in car insurance when adding drivers age 16, 17, 18 and 19 to a parent policy, broken down by state.
Average Cost of Adding a Teen Driver by State
Related: Car insurance for 19 year old
Teenage Car Insurance Discounts by Company
Auto insurance companies offer multiple types of car insurance discounts, and a handful of them are related to teens and young drivers.
Student car insurance discounts and “student away at school” discounts are common discounts related to teens. Here’s how much you can potentially save, depending on the company.
How to Find the Best Car Insurance for Teens and Young Drivers
You won’t be able to escape a considerable rate increase when you add a teen driver to your car insurance policy, but there are ways to minimize the hit to your wallet.
Keep your teen on your policy
Parents looking for the cheapest car insurance should be aware that it’s usually less expensive to add a teenager to a parent’s auto insurance policy rather than putting the teen on their own policy. If you’re in doubt, have your insurance agent run quotes for both scenarios or compare quotes online for the total cost of two separate policies. Quotes are free, so there’s no downside to checking which way is the cheapest.
Make sure you’re getting discounts
Common discounts relevant to teens include good student discounts (typically for a B average or above) and, for college students, a “student away at school” discount. If the student attends school 100 miles or more away from home, without a car, you could qualify for a price break on their rates.
In addition, teen driver insurance programs can provide both a discount and valuable driving skills training. Keeping accidents off a teen’s record will safeguard your future rates.
Shop around
Having a teen driver is a good time to compare car insurance quotes, especially if you haven’t done so in a few years. For example, we found that Erie and USAA charge slightly over $4,000 a year for two parents and a 16-year-old. That’s compared to over $7,000 a year at Farmers and over $8,000 at Allstate, on average.
Consider companies that offer accident forgiveness
Car insurance companies increase rates by an average of 40% if you have caused an accident involving an injury and 38% after an accident with property damage.
Some companies offer accident forgiveness insurance. With this feature, the insurer won’t increase rates based on one accident. The crash remains on your driving record and the accident could still affect your rates if you change companies later.
Car insurance companies that offer accident forgiveness don’t allow every driver to take part in the program. Drivers listed on the policy must have a clean driving record for a certain number of years.
Accident forgiveness programs will likely increase your car insurance rates. Our analysis found that the cost varies from about $15 to $60 a year.
Consider companies that offer new car replacement coverage
New car replacement coverage provides reimbursement for a brand-new car of the same make and model (minus your deductible) if your car gets totaled. With this coverage, you won’t have to pay the difference between the value of a brand-new vehicle and the depreciated value of your totaled vehicle.
New car replacement coverage can be beneficial for families with teen drivers, who are more likely to crash cars.
Not everyone is eligible for new car replacement coverage. You’ll typically have to have collision and comprehensive coverage, which pays for damage to your own vehicle. Insurers also usually require that your vehicle is under a certain model age and also under a specific mileage, such as 24,000 miles. Older vehicles and cars with a lot of miles won’t be eligible for new car replacement coverage.
Wait it out
Car insurance rates will generally start dropping around age 25. See Forbes Advisor’s analysis of auto insurance rates by age and gender.
Insurance Programs That Help Teen Drivers
Getting a driver’s license gives teens a sense of freedom, but it can also give parents stress and anxiety. Without parental supervision, inexperienced teen drivers are faced with an assortment of distractions that often result in poor driving and car accidents.
While the only way for a young driver to gain experience on the road is to keep driving, some auto insurance companies have programs to help teens curb bad driving behaviors and improve driving skills. As an added bonus, some insurers offer a discount when a teen successfully completes its program.
Some teen driver programs include:
- SmartPath: A Hanover Insurance mobile app tracks a teen’s driving habits and gives a score based on factors, such as distracted driving, hard braking, speeding and the time of day they’re driving. As teens improve their driving scores, they can receive Amazon rewards and you can get a discount on your car insurance.
- Steer Clear: This State Farm car insurance program offers five hours of training modules, including driving scenarios, puzzles and videos. To get a certificate of completion, teens must complete five hours of practice driving with at least 10 trips. Upon completion, you can forward the certificate to your insurance agent for a discount.
- TeenSmart: TeenSmart was originally developed in partnership with Allstate. The program utilizes interactive learning videos, driving simulations and parent and teen activities to help address some of the top behavioral and social factors that lead to car accidents.
- Teen Safe Driver: A free American Family Insurance app that monitors a teen’s risky driving behaviors. Once a teen drives 3,000 miles or completes one year of the program, you’ll get a discount on your premium from American Family. The discount is automatically applied until renewal after your teen turns 21.
Methodology
Forbes Advisor’s ratings of the best car insurance companies for teen drivers are based on the following measurements.
Auto insurance rates: 50% score. Because having a teen driver on an insurance policy is often wildly expensive, we gave weight to this category. We used data from Quadrant Information Services.
Average rates are based on a policy with a new Toyota RAV4 and coverage of:
- $100,000 for injuries to one person, $300,000 for injuries per accident, $100,000 for property damage (known as 100/300/100).
- Uninsured motorist coverage of 100/300.
- Collision and comprehensive coverage with a $500 deductible.
Complaints (20% of score): We used complaint data from the National Association of Insurance Commissioners (NAIC). Most auto insurance complaints center on claims, including unsatisfactory settlements, delays and denials.
Accident forgiveness (10% of score): Car insurance companies earned points for offering an accident forgiveness program, which can be valuable when you have a teen driver.
New car replacement (10% of score): Car insurance companies earned points for offering new car replacement coverage.
Collision repair score (10% of score): We used grades provided by CRASH Network, a weekly newsletter covering the collision repair and auto insurance market segments. CRASH Network’s Insurer Report Card has grades from more than 1,000 collision repair professionals that gauge the quality of auto insurance companies’ collision claims service.
