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No matter where you live, it’s a fact of life that teen car insurance is going to be expensive. The best states for cheap teen auto insurance earn their place with rates that are lower than average in general, but also thanks to insurance companies that offer a wide variety of car insurance discounts for teen drivers.

Teen drivers are inexperienced and statistically much more likely to have an accident than older drivers. But there are some places where parents of teens don’t pay quite as much for insurances as their peers in other states.

Before you call the moving company, of course, it’s important to remember that average rates don’t always apply to you. That also means you may be paying a lot more even in a state with a cheap average rate. That said, take a look at what auto insurance for teenagers looks like in the states with the lowest average rates.

The 10 Cheapest States to Insure a Teen Driver

Although parents aren’t going to escape the sticker shock of adding a newly licensed driver anywhere in the U.S., we gathered average rates for teen drivers and ranked every state by just how shocking that sticker is.

We also looked at which insurance companies offer coverage to teens in each state and counted up the available discounts, looking at how much you can reduce your teen’s insurance rates by qualifying for things like a good student discount.

Teen drivers will qualify for more discounts when added to a parent or guardian’s existing policy.

To help your search, we’ve listed the company with the cheapest teen driver rates on average. Where USAA had the lowest rates, we also listed the next cheapest option, since not everyone is eligible for USAA auto insurance.

Let’s take a look at which states leave parents of teens with a little extra money in their pockets.

#10 – Iowa

• Teen Driver Monthly Auto Insurance Cost: $526/month
• Total Teen Driver Discounts Offered in State: 10
• Cheapest Auto Insurance Provider for Teens: State Farm

Landing at the number 10 spot, Iowa has the largest possible number of discounts available, which means parents of teen drivers have a lot of companies to choose from with a wide variety of discounts. Looking for the company with the most discounts that apply to your situation will make a big difference to your rates. It’s also important to know how and when to add (and remove) a teen driver.

The cheapest company for teen drivers, based on average rates, is State Farm. That doesn’t mean it will be the cheapest for your teen, though, so it will take a little comparison shopping to get the best price.

#9 – Wisconsin

• Teen Driver Monthly Auto Insurance Cost: $517/month
• Total Teen Driver Discounts Offered in State: 9
• Cheapest Auto Insurance Provider for Teens: American Family

Teen drivers in Wisconsin still aren’t getting what most people would consider a cheap rate for car insurance, but on average rates here are lower than most other states.

American Family Insurance has the cheapest rates on average, but with a total of nine different discounts available, there may be a cheaper choice for you. The trick is to find the best combination of base rates and discounts. This is a state where smaller companies seem to perform better, so check regional options like Erie car insurance as well.

#8 – Montana

• Teen Driver Monthly Auto Insurance Cost: $508/month
• Total Teen Driver Discounts Offered in State: 8
• Cheapest Auto Insurance Provider for Teens: SafeCo

Montana is one of the few states on our list where one of the biggest companies in the country doesn’t have the best price for teens. SafeCo auto insurance rates come in below the rest for young drivers here.

Since Montana doesn’t really have any huge cities, averages are not skewed too much by the higher rates of urban areas. That means the average is likely to be fairly accurate regardless of where you live. Of course, comparing rates from different companies is still a wise idea.

#7 – Massachusetts

• Teen Driver Monthly Auto Insurance Cost: $501/month
• Total Teen Driver Discounts Offered in State: 7
• Cheapest Auto Insurance Provider for Teens: State Farm

The biggest auto insurance company in the nation is also the most affordable choice for teen drivers in Massachusetts, at least out of the large companies for which we were able to compare rates.

Although it ranks at number seven for the cheapest companies and there are quite a few discounts available, the average rate here still sneaks over $500 a month.

With a little effort, you might be able to get that down by shopping around. State Farm auto insurance is the cheapest option of the bigger providers.

#6 – Wyoming

• Teen Driver Monthly Auto Insurance Cost: $486/month
• Total Teen Driver Discounts Offered in State: 6
• Cheapest Auto Insurance Provider for Teens: SafeCo

Wyoming is the first state on the list to have an average auto insurance rate for teen drivers that’s under $500. There are fewer options for discounts here, and that’s because four of the major insurance companies don’t offer coverage in Wyoming.

That doesn’t mean you can’t get a better deal on teen car insurance. The cheapest company in Wyoming is SafeCo, and states with fewer major companies operating often have better deals from smaller insurers.

#5 – Alaska

• Teen Driver Monthly Auto Insurance Cost: $463/month
• Total Teen Driver Discounts Offered in State: 5
• Cheapest Auto Insurance Provider for Teens: USAA, State Farm

If there’s one advantage to living in the Last Frontier, it’s cheaper car insurance for young drivers. USAA is the cheapest choice, but for those that don’t qualify, State Farm is a close second.

Like in Wyoming, there are not as many big-name car insurance companies operating in Alaska. That means the total number of discounts available on our list is smaller but that doesn’t mean you can’t save. Again, small insurance companies may have a lot to offer here, in spite of the fact that the cheapest rates we found were from big players.

#4 – Maine

• Teen Driver Monthly Auto Insurance Cost: $451/month
• Total Teen Driver Discounts Offered in State: 8
• Cheapest Auto Insurance Provider for Teens: USAA, GEICO

USAA again offers the lowest rates in Maine, but if you’re not eligible, GEICO car insurance is another cheap option. Maine has a lot of discount options for families with teen drivers, and the good news is that the state’s minimum coverage levels are really high, which means you’re actually getting a lot of protection for your teen driver.

Maine is the cheapest state overall for car insurance, so it’s no surprise that it ranks highly on our list.

With a little time and effort, you have a good chance of finding lower-than-average rates.

#3 – North Carolina

• Teen Driver Monthly Auto Insurance Cost: $448/month
• Total Teen Driver Discounts Offered in State: 7
• Cheapest Auto Insurance Provider for Teens: Liberty Mutual

With an average rate that’s more than $75 less each month than the number 10 state above, North Carolina slips into the top three for cheap teen car insurance. You can choose from a good selection of major insurance companies with a variety of discount options to bring that rate down even more.

Liberty Mutual offers the cheapest average rates for teen drivers here. As always, checking as many companies as possible is the best way to find a rate that’s below-average.

#2 – Virginia

• Teen Driver Monthly Auto Insurance Cost: $404/month
• Total Teen Driver Discounts Offered in State: 6
• Cheapest Auto Insurance Provider for Teens: GEICO

Virginia’s teen drivers pay more than $100 a month less on average than three of the top 10 states, which adds up to savings of $1,200 a year over the averages in those states. That’s good news, and it gets better if you can qualify for some of the bigger discounts out there for teen drivers. You might even get in under $400 a month.

GEICO comes in as the cheapest company for teenagers in Virginia, on average. That’s not surprising since GEICO manages to outprice the competition in many rate comparisons. 

#1 – Hawaii

• Teen Driver Monthly Auto Insurance Cost: $225/month
• Total Teen Driver Discounts Offered in State: 7
• Cheapest Auto Insurance Provider for Teens: State Farm

As if the rest of the country didn’t have enough reasons to be jealous of those that call Hawaii home, the state is also the cheapest place to have a teen driver. At $225 a month on average, teen drivers in Hawaii cost almost half of what their peers in Iowa pay.

State Farm is the cheapest option on average, but Hawaii is also home to some smaller, local companies that cater to the island’s drivers. Even when you live in the state with the cheapest insurance for teen drivers, it can’t hurt to see if you can get that rate down a little more.

Full Study Results: Teen Auto Insurance Rates by State

Wondering what you can expect to pay when you add a teen driver to your car insurance? Take a look at the map below to see the average rate for teen drivers in each state and how many discounts are available from the biggest auto insurance companies.

It’s no surprise that Michigan has the most expensive rates for teen drivers. The state’s no-fault system has driven rates up among the highest in the country, even for older drivers. According to the Insurance Information Insititute (III), fraud in no-fault states bears a lot of responsibility for high rates. Add that to already-expensive teen rates, and it’s a recipe for a big insurance bill.

Frequently Asked Questions: Cheapest Auto Insurance and New Drivers

If you have questions about teen auto insurance, take a look below to see if we’ve answered them.

#1 – What state has the cheapest auto insurance rates?

The cheapest auto insurance overall is found in Maine. That said, personal factors have a big impact on your rates, so where you live may not be the biggest factor.

#2 – How can teens get cheaper car insurance?

The best way to get cheap auto insurance for new drivers is usually to bundle with a parent’s policy. When it comes to teenage car insurance, the average cost per month is always high, but when they’re added to an adult’s policy they can take advantage of more discounts.

The number-one way to get lower rates, though, is to shop around. GEICO’s teenage driver insurance cost is usually lower than some other companies but every situation is different. 

#3 – What are the cheapest cars to insure for teenage drivers?

As a general rule, an older car will come with cheaper rates. Look for cars with a lot of safety features and avoid sports cars or more expensive cars.

#4 – What is the best car insurance for new drivers under 25?

If you’re under 25 and a new driver, you can expect high rates regardless of age. That said, the cheapest car insurance for an 18-year-old may still be higher. As a general rule, cheap car insurance for new drivers under 21 is harder to find than for older drivers. 

Whether you need cheap car insurance for a 20-year-old or a 16-year-old, shopping around and comparing rates is your best bet to find lower rates.

Methodology: Ranking the Best States for Affordable Teen Auto Insurance

We started with average rates for 17-year-old drivers provided by Quadrant Data Solutions and averaged out the rates quoted by the top companies in each state. 

We then looked at company information provided on the providers’ websites to compare the available discounts. We specifically narrowed it down to discounts that would apply to teen drivers:

• Good Student
• Multiple Drivers
• Newly Licensed
• Students & Alumni
• Young Driver (Teen / Minor)
• Distant Student
• Family Plan

We counted the total number of discounts available from all of the top companies. These two factors combined created our list, with the average cost of insurance carrying the most weight.

Cheap Auto Insurance

05.03.2021 /