Car insurance for 25-year-olds

How much is car insurance for a 25 year old?

According to data sourced from Quadrant Information Services, the average cost for full coverage car insurance for 25 year olds is $3,031 per year, which is a fair amount higher than the overall average annual full coverage premium for 40-year-old drivers of $2,458 per year. Premiums for minimum coverage cost an average of $830 per year for 25 year olds, while the national average is $678. 

At 25 years old, you most likely have more experience behind the wheel than teen drivers and as a result, pay lower average rates than when you were younger. However, you may still see high rates if you have other high-risk rating factors working against you. Driving infractions like speeding tickets and accidents can significantly increase your cost of coverage. A higher risk vehicle, like a sports car, may also lead to pricey rates. 

Does car insurance go down at 25?

Although 25-year-olds tend to pay higher premiums than 40- and 50-year-old drivers, you can usually expect car insurance rates to decrease at 25. Generally, you’ll see a significant drop in premium at the first renewal after you turn 25. Your policy renewal is the end of your policy term and the start of a new term. This means that, unless your renewal date falls on your birthday, you may have to wait a bit to see the savings. Keep in mind, too, that numerous factors impact premiums, so your own rate might not change much or could even increase, depending on your unique situation.

How much do rates decrease for 25-year-olds in each state? 

In addition to your age, where you live may have a significant impact on how much you pay for car insurance. In Hawaii and Massachusetts, auto insurance companies are not allowed to consider your age as a rating factor, but carriers in Massachusetts are allowed to consider how many years you have been a licensed driver. Louisiana and Florida have some of the highest average full coverage rates for 25-year-old drivers, while Hawaii and North Carolina have some of the lowest. 

The national average full coverage premium for 24-year-old drivers on their own policy is $3,391 annually. Considering the national average rate for a 25-year-old driver — $3,031 for full coverage — the average premium difference you might see between birthdays is 11 percent less per year. Note that you will likely not see your rate adjust until your policy renews. 

However, how much your rate decreases between 24 and 25 (if it does at all) depends on a number of factors, including the state you live in. Drivers in Wyoming and Montana might see the most significant savings, whereas North Carolina drivers typically experience the smallest reduction. 

The full coverager rates below are for 24-year-old drivers and 25-year-old drivers on their own policy.

Average full coverage premium decrease for 25-year-olds by state

Average cost of car insurance for males vs. females at age 25

Most states take gender into consideration when rating policies. Males tend to engage in riskier driving behavior than females, which may lead to more frequent or serious accidents. Because of this, the average male driver tends to pay higher premiums than the average female driver — particularly in their teens and 20s. This difference may not be relevant in states that do not allow gender as an insurance rating factor. These include California, Hawaii, Massachusetts, Michigan, North Carolina and Pennsylvania.

Cheapest car insurance companies for 25-year-olds

Although you will likely pay less for insurance than you did when you were a teen or in your early 20s, budget may still be a primary concern for you in your mid-20s. Many drivers in this age group are starting new jobs, moving out of their parents’ homes and may be purchasing their own car insurance policy for the first time. If securing cheap car insurance is your goal, shopping around is a key part of the coverage buying process. 

The rates below represent the average full and minimum coverage rates of a 25-year-old driver who rents their home. While these rates can give you a broad sense of some of the cheapest carriers across the country, if you are looking for the cheapest car insurance for 25-year-old drivers, you may want to check our selections (updated monthly) from your specific state to narrow down your search. From there, it's a good idea to compare quotes to find the cheapest carrier based on your specific rating circumstances. 

How to save on car insurance for 25-year-olds

Car insurance can be pricey in your 20s, but there are still ways to potentially save. Following the steps listed below might help you find the coverage you need at a price that fits your budget.

Shop around

Insurance companies weigh your personal rating factors differently, so it pays to shop around. For instance, one company might consider your occupation, whereas another company may not. Additionally, every driver has different preferences and needs when it comes to car insurance. Determining what you want, like certain coverage options or digital tools, could help you find the right company for you. Once you’ve nailed down the most appealing options, experts recommend comparing rates from at least three insurers for the same coverage to identify the best deal.

Compare discounts

Most auto insurance companies offer discounts, but some companies may have more savings opportunities that apply to you. If you can take advantage of several, you may see significant savings. You can often research discounts on a company’s website, but you can also talk to a customer service representative or visit a local agency to discuss discount options and figure out if you qualify.

Some of the common discounts available for 25-years-olds include:

• Defensive driving: By taking a defensive driving or safe driving course, you might earn a discount from your insurance provider.
• Safety features: If your vehicle has certain safety features (or you add them), such as anti-lock brakes or an anti-theft device, it could help you save.
• Bundling: Many car insurance companies offer discounts for purchasing multiple policies from them, such as auto and home.
• Paperless: Some auto insurance companies provide discounts for paying your bill online or agreeing to receive electronic communications. 

Increase your deductibles

Full coverage auto insurance policies typically have two deductibles, one for collision insurance coverage and one for comprehensive insurance coverage. Because collision claims tend to be more expensive, your collision deductible usually has more of an impact on your premium than your comprehensive deductible. Increasing one or both of your deductibles usually means you will pay a lower premium, but you will have more to pay out of pocket if you claim damage to your vehicle. Most insurance professionals advise choosing a deductible amount you can comfortably pay with no notice. Otherwise, you could put yourself in a financial bind if you cause an accident or need to make a comprehensive claim.

Reconsider the car you drive

Similar to how insurance companies rate each driver based on their individual rating factors, cars are also rated differently. Some cars may be cheaper to insure than others due to the price of parts and standard safety features. Before trading or selling your car, you may want to get an insurance quote for the car you plan to purchase.

Improve your credit score

Unless you live in California, Hawaii or Massachusetts (where state law prohibits or limits the use of credit as a rating factor), your credit history can impact your car insurance premium. Drivers with worse credit are statistically more likely to file claims, so insurance companies charge them a higher price to offset this risk. If you can improve your credit, you may see a reduction in your premium.

Frequently asked questions

Methodology

Bankrate utilizes Quadrant Information Services to analyze November 2024 rates for all ZIP codes and carriers in all 50 states and Washington, D.C. Rates are weighted based on the population density in each geographic region. Quoted rates are based on a 40-year-old male and female driver with a clean driving record, good credit and the following full coverage limits:

• $100,000 bodily injury liability per person
• $300,000 bodily injury liability per accident
• $50,000 property damage liability per accident
• $100,000 uninsured motorist bodily injury per person
• $300,000 uninsured motorist bodily injury per accident
• $500 collision deductible
• $500 comprehensive deductible

To determine minimum coverage limits, Bankrate used minimum coverage that meets each state’s requirements. Our base profile drivers own a 2022 Toyota Camry, commute five days a week and drive 12,000 miles annually. 

These are sample rates and should only be used for comparative purposes.

Age: Rates were calculated by evaluating our base profile with the age 25 (base: 40 years) applied. Driver may be a renter or homeowner. Age is not a contributing rating factor in Hawaii and Massachusetts.

Gender: The following states do not use gender as a determining factor in calculating premiums: California, Hawaii, Massachusetts, Michigan, Montana, North Carolina, Pennsylvania.

Bankrate Scores

Our 2024 Bankrate Score considers variables our insurance editorial team determined impacts policyholders’ experiences with an insurance company. These rating factors include a robust assessment of each company’s product availability, financial strength ratings, online capabilities and customer and claims support accessibility. Each factor was added to a category, and these categories were weighted in a tiered approach to analyze how companies perform in key customer-impacting categories. 

Each category was assigned a metric to determine performance, and the weighted sum adds up to a company’s total Bankrate Score — out of 5 points. Our scoring model provides a comprehensive view, indicating when companies excel across several key areas and highlighting where they fall short.

• Tier 1 (Cost & ratings): To determine how well auto and home insurance companies satisfy these priorities, average quoted premiums from Quadrant Information Services (if available), as well as any of the latest third-party agency ratings from J.D. Power, AM Best, Demotech and the NAIC, were analyzed.
• Tier 2 (Coverage & savings): We assessed companies’ coverage options and availability to help policyholders find a provider that balances cost with coverage. Additionally, we evaluated each company’s discount options listed on its website.
• Tier 3 (Support): To encompass the many ways an auto insurance company can support policyholders, we analyzed avenues of customer accessibility along with community support. This analysis incorporated additional financial strength ratings from S&P and Moody’s and factored a company’s corporate sustainability efforts.