How to Get the Cheapest Car Insurance for Teens

Last Updated on December 11, 2025

Getting cheap car insurance as a teenager is tough. Teens pay higher rates than any other age group because they’re new to driving and statistically more likely to be in accidents. Still, “expensive” doesn’t have to mean “impossible to afford.” With the right setup, discounts, and car choice, you can significantly lower what you pay.

Below, we explain how teen car insurance works, which coverages you actually need, how to decide between your own policy and your parents’ policy, and the best ways to get the cheapest car insurance for teens.

Key Takeaways

• Teens pay the highest car insurance rates because they’re new drivers, but staying on a parent’s policy is usually far cheaper than buying a separate teen policy.
• Teen drivers must meet the same state minimum liability requirements as adults, and may also need optional coverages like collision and comprehensive for newer or financed cars.
• Good student, distant student, telematics, and defensive driving discounts can together cut teen insurance costs by hundreds or even thousands of dollars per year.
• The cheapest setup for most teens is a safe, modest car; one well-structured policy with parents; smart use of discounts; and a clean driving record that lets rates fall over time.

How Car Insurance Works for Teen Drivers

Teen drivers follow the same basic insurance rules as adults. Each state sets its own minimum requirements, but most require some level of basic liability insurance that includes both property damage liability coverage and bodily injury liability coverage.

If you’re still living at home, the most common (and cheapest) setup is to be listed under your parent’s car insurance policy. This will increase your parents’ premium, but it’s usually much cheaper than buying your own separate policy as a teen.

Some teens do buy their own policies instead. This might happen if:

• You own a car that’s titled in your name only.
• You live at a different permanent address (not just a dorm) where your parents’ policy can’t extend.
• Your parents’ insurer requires you to get a separate policy because of your driving record or other risk factors.

If you are under 18, you usually need a legal guardian to sign your insurance contract. As a minor, you generally can’t sign a legally binding contract – including a car insurance policy – without a legal guardian’s signature.

If you permanently move away from home (for work or your own household), you’ll typically need your own car insurance policy at your new address. You usually can’t stay on your parents’ policy if you live in a different household and keep your own car there.

There’s one big exception: college students. If you’re living away from home and going to college, many insurers allow you to remain on your parents’ policy, especially if your parents still own the vehicle or it’s “garaged” at home during part of the year.

What Coverage Do Teens Need?

Specific insurance requirements vary by state, but teen drivers are held to the same minimum standards as adults. Typically, that includes:

• Bodily Injury Liability Coverage: Pays for medical bills and related damages (like hospital bills and lost wages) for people you injure in an accident you cause.
• Property Damage Liability Coverage: Pays for damage you cause to another person’s property—usually their car, but also things like fences or mailboxes in an accident where you were at fault.
• Other State Requirements: Some states also require uninsured/underinsured motorist coverage (UM/UIM) or personal injury protection (PIP).

You don’t have to memorize your state’s minimums. When you buy car insurance, the policy is required to meet your state’s minimum legal limits automatically. You can choose higher limits for better protection, but your insurer won’t let you buy less than the legal minimum.

For example, drivers in California now need at least $30,000 of bodily injury liability coverage per person, $60,000 per accident, and $15,000 of property damage liability coverage—expressed as a 30/60/15 plan. Many states have similar minimums, and some require matching limits for uninsured motorist coverage as well.

Remember: minimum coverage is only the legal floor. Teens who drive newer or financed cars may also need collision and comprehensive coverage (more on that below), especially if a lender or leasing company requires it.

Staying on Your Parent’s Policy vs. Getting Your Own Insurance

Most teen drivers face a big decision: stay on a parent’s policy or get your own policy.

In almost every case, staying on your parent’s policy is the cheapest option. Adding a teen often increases the family premium by a few thousand dollars per year, but a separate teen policy for full coverage can easily cost even more—sometimes nearly double for the same car and coverage.

Staying on your parents’ policy may not be allowed if you permanently move out and take the car with you (unless you’re a college student), but when it’s an option, it’s usually the best value.

Pros and Cons of Staying on Your Parent’s Policy

• Pro: Usually the cheapest car insurance for teen drivers.
• Pro: You get the same coverages and discounts your parents do, often at a lower incremental cost than your own policy.
• Con: Not always available for teens who live away from home full-time (except many college students who can stay on their parents’ policy while at school).

Pros and Cons of Getting Your Own Policy

• Pro: More freedom and independence—you control your own coverage, billing, and insurer.
• Pro: You start building your own insured history and may help build credit history earlier if you pay your own bills on time.
• Con: Typically the most expensive way for teens to get insured, especially for full coverage.

Best Discounts to Get Cheap Car Insurance for Teens

One of the easiest ways for teen drivers to cut insurance costs is to stack discounts. Qualify for just a few, and you can save hundreds—or even thousands—per year.

Good Grade Discount: Do you keep solid grades in high school or college? Many insurers offer “good student” discounts to full-time students with a B or 3.0 GPA or better. Depending on the company, this can shave roughly 10% to 25% off certain coverages.

Student Living Away from Home Discount: If you’re away at school full time, without a car on campus, you may qualify for a “student away” or “distant student” discount. You stay on your parents’ policy and can drive when you’re home for breaks, but you’re rated as a lower risk because you drive less.

Telematics or Driver Tracking Program Discounts: Many companies offer driver tracking program discounts. These telematics apps or plug-in devices monitor your braking, speeding, time of day, and mileage. Good drivers can save around 10% to 30% or more, depending on the insurer and how safely they drive. As a teen, that can mean a big dollar amount.

Defensive Driving Course Discounts: If you’ve taken a driver’s education program or defensive driving course—or plan to—many insurers offer additional savings. These programs can earn you a discount and help you become a safer driver, which can lower your risk of tickets and accidents long-term.

Other potential discounts for teens include:

• Multi-car or multi-policy discounts (when your parents bundle home and auto)
• Safe driver / claims-free discounts over time
• Paid-in-full or automatic payment discounts
• Safety feature and anti-theft device discounts on your vehicle

Top Car Insurance Companies for Teen Drivers

Certain car insurance companies are known for offering relatively affordable rates and strong discounts to teen drivers. Rates still vary widely by state and driver profile, but these companies often appear among the cheapest options for teens.

Below are twenty insurers that frequently offer competitive prices for teen drivers. The “best” option for your family will depend on your location, vehicles, and driving record.

1. USAA: If you or a parent is an active duty or retired member of the military, you may qualify for USAA car insurance. USAA is consistently among the cheapest and best-rated insurers in the country. For eligible families, it’s often the top choice for teen coverage.
2. GEICO: GEICO often offers some of the lowest prices in America for drivers of all ages. In many states, GEICO is the cheapest or second-cheapest option for teen drivers.
3. Travelers: Travelers frequently offers competitive premiums to teen drivers in many states, often just behind USAA and GEICO on price.
4. Allstate: Allstate is one of the largest insurers in the country, with a wide range of discounts for teens, including telematics options and good student savings.
5. Progressive: Progressive offers teen coverage in all 50 states and is known for flexible pricing tools and strong discounts.
6. State Farm: State Farm insures more vehicles in the U.S. than any other company and often has attractive rates and teen driver programs—especially when parents already use State Farm.
7. Liberty Mutual: Liberty Mutual is popular with drivers who want to mix and match coverages. It may offer strong teen discounts, particularly when bundling or insuring multiple vehicles.
8. Farmers: Farmers often scores well for customer service and renewal rates. It offers extensive discount opportunities for families with teen drivers.
9. Nationwide: Nationwide can be a good option for teens with a clean record, especially when paired with its telematics and low-mileage programs.
10. AAA: While AAA auto insurance rates for teens can be higher than some competitors, many families value AAA’s roadside assistance, customer service, and regional club structure.
11. American Family: American Family often offers solid pricing for the whole household, including teen drivers, particularly in states where it has a strong local presence.
12. Erie: Erie operates in a limited number of states but is well-known for high claims satisfaction and competitive teen rates where it’s available.
13. Kemper: Available nationwide, Kemper offers a wide range of coverage options and discounts that can appeal to teen drivers and their families.
14. MetLife: MetLife has historically offered personal auto insurance across much of the U.S. and is often associated with employer or group plans that may benefit teen drivers in participating families.
15. The Hartford: The Hartford is best known for claims handling and many AARP-focused programs, but in some markets it can also be competitive for families with teen drivers.
16. Mercury: Mercury offers below-average premiums in many of the states it serves, making it a popular option for cost-conscious teens.
17. Amica: Amica is a mutual insurer known for customer satisfaction and can be a strong choice for teen drivers in regions where it’s widely available.
18. Shelter: Shelter is often a top pick for families in the central and southern U.S., thanks to strong service and competitive teen pricing in its coverage area.
19. Farm Bureau: In states with a Farm Bureau subsidiary—like North Carolina Farm Bureau—personalized local service and competitive pricing can make Farm Bureau a great option for teen drivers.
20. COUNTRY Financial: COUNTRY Financial offers auto insurance in select states and is sometimes among the best-priced carriers for teen drivers there.

Rates change frequently. Even if a company is known for low teen rates overall, they might not be cheapest where you live. That’s why it’s always smart to compare quotes from multiple insurers.

Drop Collision and Comprehensive Coverage (When It’s Safe) for Maximum Savings

All teen drivers must carry liability coverage to meet state law. Collision and comprehensive coverage are optional in every state—although lenders and leasing companies usually require them for newer or financed vehicles.

If you want the lowest possible premiums and drive an older, paid-off car, you might be able to save big by removing collision and comprehensive coverage from your policy.

Collision Coverage: Collision coverage pays to repair or replace your own vehicle after an at-fault accident or a collision with another car or object. Without collision, if you cause a crash, you’ll pay for your own repairs out of pocket.

Comprehensive Coverage: Comprehensive coverage pays for non-crash damage to your car, including vandalism, theft, hail damage, storm damage, and fallen tree branches. Without comprehensive, you won’t be paid if your car is stolen, broken into, or damaged by weather.

Dropping collision and comprehensive is risky for newer, high-value, or financed vehicles. But many teens drive older used cars that aren’t worth much. If the car’s value is low enough that you could afford to replace it yourself, the savings from dropping full coverage can sometimes be worth it—especially when combined with a higher deductible on any remaining coverage.

Drive a Cheaper, Safer Car

The cheapest cars to insure for teens tend to be:

• Moderately priced sedans, minivans, or small SUVs
• Vehicles with strong crash-test ratings and modern safety features (airbags, automatic emergency braking, lane assist, etc.)
• Models with relatively low repair and parts costs

High-horsepower sports cars, luxury models, and heavily modified vehicles tend to cost much more to insure—especially for teens.

Recent data often shows that practical vehicles like the Subaru Outback, Honda CR-V, Jeep Wrangler, Toyota RAV4, and similar small SUVs frequently rank among the cheaper cars to insure thanks to good safety ratings and reasonable repair costs. Exact rankings change over time, so always compare insurance quotes for any vehicle you’re considering.

Teen Insurance Premiums Vary Widely: Always Compare Quotes

We’ve mentioned that certain companies and car types often have lower rates for teen drivers. It’s also true that no single company is cheapest for everyone.

Yes, USAA and GEICO often offer the cheapest auto insurance to teen drivers in many states, but not in all. In some areas, a regional or local insurer beats the big national names.

That’s why it’s crucial to compare quotes from several of the major car insurance companies in your area—especially when:

• A teen in your household just got their license
• Someone’s driving record changes (accident, ticket, or DUI)
• You buy a different vehicle
• Your policy is up for renewal and the price jumps

Enter your ZIP code and compare quotes online in just a few minutes. The difference between the most expensive and cheapest option for a teen can easily be thousands of dollars per year.

FAQs on Getting the Cheapest Car Insurance for Teens

Final Word on Auto Insurance for Teens

If you want the cheapest car insurance as a teenage driver, your best bet is usually to stay on your parent’s policy if you’re eligible. This is often available for teens living at home and many college students living away from home.

If you can’t stay on your parents’ policy, you’ll need your own coverage—and as a teen, it won’t be cheap. But you can still keep costs down by:

• Choosing a modest, safe, and inexpensive car
• Dropping collision and comprehensive coverage on older, low-value vehicles (when it’s safe and allowed)
• Stacking discounts like good student, defensive driving, distant student, and telematics programs
• Keeping a clean driving record—no tickets, DUIs, or at-fault accidents

Teen insurance will always be pricey compared to older drivers—but it doesn’t have to be impossible. Make smart choices now, drive safely, and your rates can drop significantly in just a few years.