Why is first time car insurance so expensive?
Asked by: Loy Satterfield | Last update: December 14, 2025Score: 4.9/5 (59 votes)
Is first time car insurance expensive?
Car insurance for first-time drivers might be more expensive than for someone with a long history of good driving. But if you're a new adult driver (rather than a teen getting car insurance), you have the advantage of age — adult drivers are generally safer and cheaper to insure than teens.
Why is car insurance for new cars so expensive?
New cars can generally cost more to insure due to higher replacement costs and advanced tech features. Definitely shop around and consider tweaking your coverage options to find a better deal.
What is the best insurance for first time car owners?
State Farm has the cheapest car insurance quotes for first-time drivers — rates are 64% cheaper than other top companies. A minimum-coverage policy from State Farm costs an average of $128 per month for an 18-year-old. Geico also has cheap rates, averaging $160 per month.
Why is my car insurance so high at 18?
Even if you have a clean driving record, you'll pay more for auto insurance than a middle-aged driver because you're more likely to cause an accident than someone with more driving experience. According to Forbes Advisor, the average cost of car insurance for an 18-year-old is $6,147 per year or $513 per month.
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What is the cheapest car insurance for a 18-year-old?
The cheapest major car insurance company for 18-year-old drivers is State Farm, at $381 per month for full coverage. Regional companies like Erie, NJM, Farm Bureau and Auto-Owners tend to offer very affordable rates for 18-year-olds. But they're not available in every state.
Is it cheaper to insure a new or old car?
New cars normally have a higher market value compared to used cars, which often results in higher insurance costs. Insurers must account for the potential payout in case of a total loss, making it more expensive to insure a higher-valued vehicle.
Can you buy your first car without insurance?
Technically, you can buy a vehicle without insurance. However, whether you're buying a new or used car, you need auto insurance to drive it home — specifically, a policy that meets your state's minimum amount of liability insurance. Most car dealerships won't allow you to leave with the car unless it's insured first.
What car insurance is best for new drivers?
Progressive, Geico, Auto-Owners, State Farm and Nationwide tend to offer low average premiums and robust coverage options for young drivers. If you're a young adult, searching for carriers that offer discounts you qualify for can potentially help lower your rate.
Why is car insurance so expensive in 2024?
Why is car insurance so expensive? Premiums increased throughout 2023 and 2024 for several reasons, according to the Insurance Information Institute. Inflation: The cost of repairing and replacing vehicles — and paying medical and legal bills — has risen even faster than inflation, according to the Institute.
Are BMWs expensive to insure?
BMWs are known as a premium car make. Since they may be more expensive to repair or replace, your BMW car insurance may cost more than insurance for, say, a Honda or Nissan car of the same size. Find out more about the factors that affect car insurance rates.
Will my insurance go up if I buy a new car?
Usually, getting a new car will increase your rate because it'll be worth more than your old car. Note that other factors may impact your car insurance rate if you're starting a brand-new auto insurance policy. But even if your rate increases, you may be eligible for a few car insurance discounts.
At what age is car insurance cheapest?
Experienced drivers are less likely to have accident claims, which means they cost less to insure. At Progressive, the average premium per driver tends to decrease significantly from 19-34 and then stabilize or decrease slightly from 34-75. At age 75, the average premium begins trending upward.
Is there a starting fee for car insurance?
Insurance companies require money upfront before selling a policy, so you cannot get car insurance without a down payment or deposit. Your car insurance "deposit" or "down payment" is typically some percentage of your total car insurance premium. It isn't a separate charge or fee.
Why is car insurance so expensive for 20 year olds?
Insurance is about assessing risk. Young drivers have less experience, which puts them in a higher class of risk for insurers. As a result, car insurance rates for a 20-year-old are higher than those for a more experienced driver, though a 20-year-old driver is still less expensive to insure than a teen.
Can I finance a car without insurance?
Liability: Liability coverage is required in nearly every state, regardless of whether you finance, lease, or buy your car outright. As a result, lenders may require it.
Can you get full coverage on a 20 year old car?
Yes. Full coverage is available for older cars. However, if your older car has a low market value, you won't get much from the insurance company if it's totaled or stolen. This is the main reason to drop full coverage for an older car with a low resale value.
Why is my insurance so high for an old car?
Although they may have a lower value, older cars may also have expensive parts that could make repairs expensive. The older a car gets, the harder it may be to source these parts for repair, which can also drive up the cost of car insurance for older cars.
Is it expensive to insure a new car?
Since new vehicles have a higher initial value, they have higher car insurance premiums, but because of the rapid depreciation, these premiums may also decrease over time. Full coverage car insurance costs for new cars tend to be more expensive compared to used cars due to their higher value.
Why is my insurance so high at 18?
The lack of experience and driving history plays a major role in determining insurance rates. Young drivers are seen as more prone to accidents due to inexperience, making them riskier clients for insurers. This can result in higher premiums and even difficulty obtaining insurance coverage.
What happens if I don't add my teenager to my car insurance?
Failing to add your teenager to your auto insurance can lead to coverage denial, legal penalties and policy cancellation. Lack of driving experience and perceived higher risk contribute to higher car premiums for teen drivers.
Which car insurance is best for students?
- Best for discounts: Geico.
- Best for customer satisfaction: State Farm.
- Best for students leaving their cars at home: Progressive.
- Best for pay-per-mile coverage: Allstate.
Does insurance go down after 18?
Insurers typically charge higher premiums for drivers younger than 25, according to the Insurance Information Institute (III). But, as teen drivers get older, rates typically drop — as long as they maintain a good driving record, the III says.
Can an 18 year old be on parents insurance?
The Affordable Care Act requires plans and issuers that offer dependent child coverage to make the coverage available until a child reaches the age of 26. Both married and unmarried children qualify for this coverage. This rule applies to all plans in the individual market and to all employer plans.