How Much Is Car Insurance for 23-Year-Olds?
Last Updated on February 7, 2023
As a 23-year-old, you pay higher-than-average rates for car insurance. The average 23-year-old, according to our research, pays around $2,494 per year for full coverage car insurance, which is $1,000 more than the US average.
Fortunately, there are easy ways to save money for a 23-year-old driver. Some insurers welcome young drivers to their pool to balance risk. Other insurers charge young drivers higher rates because they prefer older, more experienced drivers.
Keep reading to find out everything you need to know about the cost of car insurance for a 23-year-old driver.
Table of Contents:
- The Average Car Insurance Cost for a 23-Year-Old
- Factors Impacting the Price of Car Insurance for 23-Year-Old Drivers
- Best Car Insurance Companies for 23-Year Olds
- How to Save Money on Car Insurance as a 23-Year-Old Driver
The Average Car Insurance Cost for a 23-Year-Old
We calculated average insurance premiums in all 50 states. We created multiple driver profiles with different accident histories – from clean records to multiple incidents. Some of our model 23-year-old drivers received their license the day they turned 16 and had seven years of safe driving history, while others had only one or two years.
After crunching all of these numbers, we discovered the average 23-year-old driver in the United States pays around $2,494 per year for full coverage car insurance.
Comparatively, teenage drivers pay over $3,500 per year for full coverage car insurance. Although $2,494 per year may seem high, you’re paying much less than younger drivers, on average.
Meanwhile, the average driver in the US pays around $1,450 per year for full coverage car insurance.
As a 23-year-old driver, you pay relatively high insurance premiums today. However, your insurance premiums continue to drop as you get older. After age 25, for example, insurance premiums tend to drop significantly – as long as you maintain a clean driving record.
Factors Impacting the Price of Car Insurance for 23-Year-Old Drivers
The average 23-year-old driver in the United States pays $2,494 per year for car insurance. However, numbers vary widely based on many factors.
23-year-olds in Florida, Louisiana, and Michigan, for example, pay over $3,200 per year for car insurance on average, while drivers in Idaho, Maine, and North Carolina pay less than $1,900 per year.
Here are some of the most critical factors impacting the price of car insurance for a 23-year-old driver:
State Insurance Laws & Other State-Specific Factors: Some states have strict insurance laws, high limits, and unique insurance systems. Other states have high rates of natural disasters, high rates of crime, high density, and other factors impacting risk. As a 23-year-old driver in Maine, you could pay less than $1,800 per year for full coverage car insurance. As a 23-year-old driver in Louisiana, that same policy could cost over $3,500 per year.
ZIP Code: Does your ZIP code have high rates of crime, high traffic density, or high rates of vehicle theft? Insurers consider ZIP codes when calculating premiums. Some ZIP codes are low-risk, while others are high-risk. Moving from a safe community to a community with high vehicle vandalism and theft rates could cost you hundreds of extra dollars per year – even if you never make a claim.
Vehicle Make & Model: 23-year-old minivan drivers are less risky to insure than 23-year-old sportscar drivers. Some vehicles have higher accident rates for all ages.
Gender: Young males pay higher insurance premiums than young females, all else equal. This trend tends to flip with age. However, young men under age 25 tend to pay the highest rates for car insurance.
Claims History: Have you ever made a car insurance claim? 23-year-old drivers with one or more claims on their record could pay higher rates for car insurance. If the claim was a situation where you were not at fault, then the claim could have a negligible impact.
Actual Cash Value of Vehicle: Insurers cover the actual cash value of your vehicle. If you are involved in a total loss accident, the maximum the insurer needs to pay for your vehicle is its actual cash value. You’ll pay more for car insurance if you have a $25,000 vehicle than a $10,000 vehicle.
Driving History: 23-year-old drivers with speeding tickets, at-fault accidents, DUIs, and other incidents on their driving record will pay higher rates. Generally, insurers check your driving record for incidents dating back 3 to 7 years. As a 23-year-old, that span could cover your entire driving history.
Years of Driving Experience: If you received your license on the day you turned 16, you could have seven years of safe driving experience. Insurers love to see years of safe driving experience. In comparison, someone who got their license at age 20 could have a similarly clean record but only three years of safe driving experience, leading to higher rates.
Annual Mileage: The average American drives 14,500 miles per year. You could save money if you drive significantly fewer miles than average. Many insurers now offer app-based vehicle tracking systems and pay-per-use insurance, helping you save even more.
Coverage Options: Some drivers are willing to splurge on a high-limit insurance policy with all of the bells and whistles. Many 23-year-olds, however, save money by buying a liability-only insurance policy. Liability-only policies provide limited protection for your vehicle, but they may be the best choice based on your vehicle’s age and risk tolerance.
Best Car Insurance Companies for 23-Year Olds
Many insurers welcome young drivers into their pool to balance risk and charge higher premiums. Some insurers prefer older, more experienced drivers, while others prefer a balanced mix.
During our research, some companies were consistently more affordable than others for 23-year-old drivers. Those companies included:
Shop around and compare quotes regularly to ensure you’re getting the best car insurance for your unique needs as a 23-year-old driver.
How to Save Money on Car Insurance as a 23-Year-Old Driver
23-year-old drivers pay higher-than-average rates for car insurance. However, there are proven ways to save money as a 23-year-old driver.
Here are some of the best ways to save money on car insurance as a 23-year-old driver:
- Compare quotes every 6 to 12 months. As a 23-year-old, your life could be changing regularly. You might move to a new ZIP code, get a new partner, change states, graduate school, or get a new job, for example. That means your ideal insurer will also change. Compare quotes every 6 to 12 months to ensure you always have the best insurer for your unique needs, situation, and budget.
- Improve your credit score. Many 23-year-olds have an average credit score. Student loans and other debt can lower your credit score. As you begin to pay off your student loan or improve your credit score in other ways, you could find increasingly affordable car insurance premiums. As a 23-year-old with a bad credit score, you could find it particularly difficult to get affordable car insurance.
- Take advantage of student discounts. Many insurers now offer good grade discounts to full-time students. If you maintain a certain grade point average, you could save hundreds per year on car insurance.
- Buy a liability-only policy. Consider buying a liability-only policy if you drive an older vehicle with a lower cash value. A liability-only policy covers damage you cause to other people and vehicles with limited protection for your own vehicle. You could save over $1,000 per year compared to a full coverage policy. If you drive an older vehicle, full coverage car insurance may not be worth it.
- Take advantage of alumni or professional association discounts. If you’re a new professional association member or a recent graduate, you could have specific exclusive discounts. Many groups partner with insurers to provide discounts to members, for example, helping you save money.
- Bundle policies together. Most 23-year-olds are not homeowners, so they can’t bundle home and auto insurance to save money. However, you can bundle multiple auto insurance policies in the same household together. If you live with a roommate, partner, or family member, then bundling all insurance policies under the same company could save you hundreds per year.
- Be patient and maintain a safe driving record. The older you get, the less you’ll pay for car insurance. Your risk of causing an accident drops sharply after age 25, and many insurers start to reduce rates substantially after this point. Be patient, maintain a safe driving record, and rates inevitably drop.
Final Word: Car Insurance for 23-Year-Olds
As a 23-year-old, you pay cheaper car insurance premiums than teenage drivers – but costlier car insurance premiums than the average American adult.
Fortunately, by taking advantage of discounts, bundling policies together, and shopping around frequently, you can pay the cheapest possible rates for car insurance as a 23-year-old driver.