Turning 21 comes with a lot of excitement for young adults. One reason to celebrate that people don’t often think about is car insurance rates may get less painful.

Forbes Advisor analyzed average costs to find the cheapest car insurance for 21-year-olds.

What Is the Cheapest Car Insurance for 21-year-old Drivers?

Geico is the cheapest car insurance company for adding a 21-year-old driver to a parent’s policy, according to our evaluation.

USAA and American Family are the next cheapest companies to check out when you’re comparison shopping for car insurance. These three cheapest companies are more than $500 a year lower than the national average.

It’s usually cheaper for parents to add a 21-year-old to their car insurance policy than for the young adult to buy their own. Here’s a look at the cheapest car insurance for a 21-year-old driver.

Cheapest car insurance companies for adding 21-year-old drivers

Here are the costs for adding a 21-year-old to an existing parent car insurance policy.

Insurance company Average annual cost to add 21-year-old to a parent's policy
$520
$542
$566
$765
$804
$967
$1,016
Overall average
$1,110

*USAA is available only to members of the military, veterans and their immediate families.

Cheapest car insurance for parents plus a 21-year-old driver

If you’re shopping for a new policy for both parents and a 21-year-old, USAA, Geico and Travelers may have the cheapest rates.

Insurance company Average annual cost to add 21-year-old to a parent's policy
$2,683
$3,039
$3,160
$3,480
$3,563
$3,876
Overall average
$4,072

*USAA is available only to members of the military, veterans and their immediate families.

Cheap car insurance for 21-year-olds on their own policy

USAA, Geico and Auto-Owners have the cheapest auto insurance for 21-year-olds who need to buy their own separate policy.

Insurance company Average annual cost to add 21-year-old to a parent's policy
$2,238
$2,950
$3,067
$3,096
$3,388
Overall average
$3,459

*USAA is available only to members of the military, veterans and their immediate families.

Average Car Insurance Cost for a 21-Year-Old?

It costs an average of $1,110 a year to add a 21-year-old to a parent’s car insurance policy, or $3,459 a year for a 21-year-old on their own policy.

Adding a young driver to a parent’s policy can be costly, about $93 more per month according to Forbes Advisor’s analysis, but it’s cheaper than the young adult buying their own car insurance. Overall, the average cost of a parent’s auto insurance policy with a 21-year-old driver included is $4,072 per year. With these eye-opening numbers, it’s good to look for the best car insurance so that the whole family has a financial safety net if there are insurance claims

Car insurance rates for 21-year-olds are lower than rates for teen drivers but are still a bit higher than costs for drivers aged 25 and older. That’s because 21-year-olds are more likely to get into accidents than more experienced drivers. Drivers aged 20 to 24 had a fatal crash rate of 19.2 per 100,000 people, compared to 17.5 for drivers aged 25 to 29, according to the Insurance Institute for Highway Safety.

Average Car Insurance Cost by State for 21-Year-Olds

State Average yearly cost to add a 21-year-old to a parent policy Average yearly cost for a 21-year-old on their own policy
$1,189
$2,845
$1,259
$2,723
$1,300
$2,721
$1,131
$2,966
$1,086
$3,525
$1,212
$3,602
$1,199
$2,936
$961
$3,748
$1,878
$5,271
$1,237
$3,352
$641
$1,345
$728
$1,791
$1,000
$3,997
$774
$2,613
$652
$2,123
$1,065
$3,145
$1,158
$2,703
$2,011
$4,805
$697
$2,190
$1,320
$4,711
$876
$4,371
$909
$4,037
$921
$3,816
$856
$2,840
$1,204
$3,049
$666
$2,459
$865
$2,341
$1,559
$4,046
$555
$2,212
$1,199
$3,480
$1,185
$2,919
$1,028
$5,089
$291
$1,419
$802
$1,960
$863
$2,042
$1,203
$3,626
$933
$2,299
$1,178
$4,990
$1,114
$3,737
$1,112
$3,245
$630
$2,741
$1,017
$2,853
$1,328
$3,336
$1,293
$2,988
$368
$1,796
$755
$2,292
$1,013
$2,747
$918
$2,836
$772
$2,638
$519
$1,903

Average Car Insurance Cost by Gender for 21-Year-Old Drivers

Male 21-year-olds are more likely to be in car crashes and file claims, so males pay a bit more for car insurance than their female counterparts. When adding a male age 21 to a parent policy, rates are 39% higher than if insuring a female 21-year-old.

Average car insurance cost for 21-year-old drivers on a parent’s policy

Average yearly car insurance cost to add 21-year-old female to parent policy Average yearly car insurance cost to add 21-year-old male to parent policy Average $ increase males pay Average % increase males pay
$929
$1,292
$363
39%

 

Average car insurance cost by gender for 21-year-old drivers on own policy

Average yearly car insurance cost of 21-year-old female on their own policy Average yearly car insurance cost of 21-year-old male on their own policy Extra cost per year for males Extra % for males
$3,222
$3,696
$473
15%

 

What Factors Influence the Cost for 21-Year-Old Drivers?

Understanding the factors insurance companies use to determine car insurance rates can help you control your costs.

Age

Adding a teen or young adult to a parent’s car insurance increases costs because insurance companies view inexperienced drivers as a high risk. You can’t avoid an increase, but you can take steps to reduce the financial impact. For example, good driver training will help your teen avoid accidents. That can be a huge saving compared to the car insurance bill you’ll face if the 21-year-old causes an accident.

Gender

Car insurance companies make their rate decisions based on past claims paid. Because teenage and young adult males are the source of more claims than females in the same age range, insurance for males costs more.

Related: Gender and Age affecting Car Insurance Rates

Location

Local factors related to location that often impact auto insurance prices include:

  • The frequency of auto accidents.
  • The cost of vehicle repairs, including parts and labor.
  • The frequency of claims related to auto theft and vandalism.
  • Weather and disaster claims such as hail and floods.
  • The cost of medical care, which affects how much insurers pay for injury claims.

Type of car

When you include collision and comprehensive insurance as part of your auto insurance policy, it will pay for claims related to damage to your vehicle from auto accidents, hitting guardrails, car theft, trees falling on the car, and more. If your vehicle is more expensive to repair or replace than other vehicles, the extra cost will be reflected in your rates for collision and comprehensive coverage.

What Discounts Are Available for 21-year-olds?

There may not be a lot of car insurance discounts for 21-year-olds because they’re known as risky drivers. But it’s wise to see what your young adult driver may qualify for.

Good student discount

A “good student discount” is a good way to save if your 21-year-old driver is eligible. You should bring it up with your agent because your car insurance company may not know to add it.

Forbes Advisor’s analysis of good student discounts found an average of 4% savings.

The eligibility rules for this discount may vary a bit by insurer, but usually, the student needs to be within a certain age range, going to high school or college full-time, and receiving good grades.

Typically “good student” can mean any one of these:

  • Grade average of B for better.
  • Average of 3.0 or better.
  • On the Dean’s List, Honor Roll or comparable listing.
  • In the upper 20% of their class.
  • In the upper 20% of a national standardized test within the past 12 months, such as the SAT or ACT.

Student away-from-home discount

If your 21-year-old is off at college away from home you may be able to get a discount. “Student away from home discounts” have an average savings of 8%, according to Forbes Advisor’s analysis.

To qualify for a student away-from-home discount, your 21-year-old will need to meet certain requirements, which can vary by company. Basic qualifications for the discount typically include:

  • The student attends and resides at a school more than 100 miles from home; and
  • The car stays at your home while the student is away at school; and
  • The student only drives the car when home during school holiday periods and vacations.

Discount for a driver training class

This discount tends to be less common but it’s worthwhile to ask about it. If your 21-year-old completes an approved driver training program, you may be able to get a discount. Make sure the course is approved for the discount by your insurer before starting on it.

Related: Car Insurance for College Students

Can a 21-Year-Old Get Their Own Policy?

Yes, a 21-year-old can get their own auto insurance policy. A young adult who is 21 can own and register a vehicle in their own name and can also buy a car insurance policy in their name.

First-time car insurance buyers should familiarize themselves with the types of car insurance and how they work. This is true regardless of age, but especially so for young adults. Drivers ages 18 to 25 were the most likely to misunderstand how car insurance coverage works, according to a Forbes Advisor survey on basic car insurance knowledge.

If the 21-year-old does not yet own their own vehicle and lives at home, adding or keeping the young adult on a parent’s policy is usually cheaper.

How to Get the Cheapest Insurance Policy at 21

Here are some tips for getting the cheapest car insurance for a 21-year-old.

Get multiple quotes

The car insurance company with the most competitive rates for parents may not be the best choice when adding a 21-year-old to the policy. When you’re adding a new driver, especially a younger one, it’s a good time to compare car insurance quotes to see which companies offer the best deals.

Explore discount opportunities

To find discounts for a 21-year-old, focus on good student discounts and rate reductions for completing a driver’s education class. But also ask your auto insurance agent what other discounts might apply for families with a 21-year-old driver.

Drive an affordable car

Collision and comprehensive insurance will be more affordable if your vehicle is cheaper to repair or replace. You want a safe vehicle for your young adult driver, but avoid luxury cars, and especially avoid sports cars if you want to keep car insurance rates low.

Increase your deductibles

When you purchase collision and comprehensive insurance, you choose a deductible. You can usually save on costs by having a higher deductible—such as $1,000 instead of $500.

To figure out what deductible is best for you, ask your car insurance agent to give you quotes for various deductible levels. Then you can decide if the savings is worth it. Be mindful that a 21-year-old driver is more likely than older adults to collide with something.

Coverage amount

You may be contemplating reducing your coverage in order to save money on car insurance. But if you have a 21-year-old driver, it’s no time to skimp on auto insurance coverage. Teens and young adult drivers are more likely to be involved in car crashes, so their chances of needing good insurance due to claims are higher.

You can find cheap full coverage car insurance that has higher liability limits than is required in your state, along with comprehensive and collision coverage to provide protection for your car.

Methodology

We used data from Quadrant Information Services, a provider of insurance data and analytics. Rates are based on parents and a 21-year-old driver with good driving records insuring a Toyota RAV4 with $100,000 in bodily injury liability coverage per person, $300,000 per accident and $100,000 in property damage liability (together known as 100/300/100), uninsured motorist coverage and collision and comprehensive with a $500 deductible.

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Cheap Car Insurance for 21-Year-Olds FAQs

Why is car insurance cheaper at 21 than 18?

Car insurance is cheaper for a 21-year-old than for an 18-year-old because as you gain more experience behind the wheel, you become less of a risk to insurers. By age 21, you may have around five years of driving experience.

Typically, when you have three to five years of driving experience—and have been able to steer clear of accidents and traffic violations, like speeding tickets—you can earn a good driver discount with car insurance companies. Being able to take advantage of more car insurance discounts like this one will reduce what you pay.

Related: Car Insurance for 20-year-olds

Can a 21-year-old be on their parent’s car insurance policy?

Yes, a 21-year-old driver can be on their parent’s car insurance policy if they continue to drive their parent’s car and live at home. If the young adult has bought and registered a vehicle in their name, they usually would buy their own policy as well.

When a 21-year-old is buying their own car insurance policy, it’s wise to compare car insurance quotes with multiple companies to find the one that offers the best rates.

Will safe driving influence the cost of car insurance for a 21-year-old driver?

Safe driving will influence the cost of car insurance for a 21-year-old driver in a good way. Demonstrating safe driving habits makes you eligible for cheaper car insurance rates. For instance, if you have a clean driving record, you may qualify for a good driver discount, which will help lower your auto insurance costs.