How much is car insurance for a 17 year old?

Young drivers are often warned to prepare for the price of car insurance. But how much does car insurance cost for a 17-year-old? Why is it so expensive and how can you get the best deal?

Buying car insurance for a 17-year-old isn’t cheap, but there are a few ways to make it cheaper. Let’s look at some options.

Car insurance price for a 17 year old

According to online insurance company Clover, the average 17-year-old driver’s car insurance costs $5,900 a year. That is a huge amount of money, especially for someone who is still in high school and may not have a job(1).

Car insurance prices can vary significantly depending on many factors, such as where you live. In some areas, insurance will be cheaper, as little as $1,400 per year. In others, teenagers could pay as much as $10,500 a year to buy coverage.

Boys also tend to pay more than girls, with the average premium for a 17-year-old male reaching $6,300 compared to $5,500 for a 17-year-old female.


Average insurance prices by age

The good news for 17-year-olds is that their insurance won’t stay expensive forever. As you gain more experience, your car insurance tends to get cheaper. In fact, 16-year-olds have to pay an average of $7,200 a year for coverage, so just one year of experience has already reduced your premiums by $1,000.

This trend of big price drops continues every year until you’re in your 20s or so. Prices continue to fall slightly until you’re 60, when they start to rise again.

According to data from Motor1 car service, the average price of car insurance is by age(2):

Age Annual costs
19 $3,708
21 $2,786
25 $2,019
30 $1,831
40 $1,755
50 $1,658
65 $1,648
75 $1,912

Why is car insurance for a 17 year old so expensive?

Insurers use complex mathematical and predictive models to figure out what to charge for policies. Their goal is to charge what, on average, is left over after claims are paid, without charging so much that customers look elsewhere.

This means that they adjust the price of the policy based on the perceived risk. A driver who is more likely to get into an accident and file a claim will pay more than one who is seen as a safe driver and is unlikely to need the insurance company to cover the costs after an accident or crash.

Age and experience

We’ve already seen how age can affect insurance rates, but experience is another factor that plays a big role, and it’s closely related to age. You can only start gaining experience when you are old enough to get a driver’s license, but waiting to get your driver’s license until an older age will not make your insurance cheaper at that age.

Insurance companies look at how long you’ve been driving to determine your premium. While a 25-year-old getting a driver’s license for the first time won’t pay as much as a 17-year-old who just got his license, he’ll pay a lot more than a 25-year-old who’s been driving.

State and selected coverage requirements

Each state has different laws regarding car insurance and the coverage that drivers must purchase.

Massachusetts requires a minimum of $20,000 in personal injury liability coverage per person ($40,000 per accident, $5,000 in property damage liability, $8,000 in personal injury protection, and $20,000 in uninsured motorist coverage per person ($40,000 USD per accident).

In contrast, Florida has no requirement for bodily injury coverage, only mandating $10,000 property damage liability and personal injury coverage.

The level of cover you buy will affect the price you pay, with more cover being more expensive. If you want to buy the state’s minimum level of insurance, you’ll pay more in states with higher requirements.

Car make and model

Tea type of car that you drive can make insurance more expensive or cheaper.

Some cars, such as trucks and SUVs, with high safety ratings can help lower your insurance costs. Luxury sports cars are more prone to theft and are often driven dangerously. They can also be more expensive to repair, so if you’re driving a higher-end vehicle, you’ll face higher premiums.

Driving record

Insurers will look at your driving record and ticket history to try to gauge how well you drive and how likely you are to get into an accident. A clean record can have a huge impact on the price of insurance.

Getting a ticket for dangerous driving, such as speeding, can lower the price of your insurance. Get enough tickets and the premium doubles or triples for several years.

If you’ve been in an accident, insurers see you as a risk and will charge you more to compensate them. Even just filing claims can cause your insurer to raise your rates when you renew your coverage.

Credit history

In many states, insurance companies will look at you credit history and score as part of pricing your policy.

In general, insurance companies look at people with good credit be safer than bad credit bets. The idea is that someone who is careful with credit is also likely to be a safe and careful driver. Someone with bad credit may not drive as safely.

πŸ“š More information: Discover practical and free strategies to improve your credit score by checking out our guide how to get a loan for free.

In some cases, bad credit can increase your rates by as much as 50%.

If you live in California, Massachusetts or Hawaii, insurers cannot use your credit to determine the cost of coverage. However, your credit may play a role in the other 47 states.

As a 17-year-old, you probably won’t have a credit score because you’re too young to apply for most forms of credit. Add to parents card as authorized user is a start and building good credit will help you lower your insurance costs in the future.

πŸ“š More information: Starting your financial journey strong is essential; our post on how to get credit at 18 offers eight effective strategies to consider.

Lease

The state you live in determines the minimum level of coverage you must purchase, but where you live in the state also plays a role. For example, if you live in a big city, you will likely pay more for insurance than someone who lives in the suburbs or a rural area, simply because the rate of theft is higher and you are more likely to be in an accident with more people around.

State

Although this is not usually the case for 17-year-olds, it is a factor that insurance companies consider. In general, single people are considered riskier drivers and pay more for insurance than married drivers.

More drivers planned

Having multiple drivers on the same insurance plan can be cheaper than insuring each individual separately. For a 17-year-old child, the cheapest way to get insurance will often be included in the parents’ policy.


How to save money on insurance

Due to the high cost of insurance for young drivers, you should try to find the best deal. Taking the time to shop thousands of people can save you hundreds or $ a year.

Compare multiple insurers

The most obvious and one of the most important ways to find a good car insurance quote is to shop around. There are many insurance companies out there, so take the time to get quotes from multiple companies and compare them.

Consider the coverage each insurance company offers and how much each company charges. However, make sure that the insurance companies you are considering are reputable. Check their ratings from companies like AM Best, which rates insurance companies by likelihood of default.

The last thing you want is to file a claim only to find that your insurer doesn’t have the cash to pay out.

Consider a higher deductible

An insurance plan deductible is the amount you have to pay out of pocket before your insurance kicks in and starts paying for damage to your car or other liabilities.

If an accident causes $5,000 in damage to your car and you have a $250 deductible, the insurance will pay $4,750 in damages and you will pay $250. If your deductible is $1,000, you must pay that amount and the insurer will only pay $4,000.

A higher deductible can be risky because it means more cash when you’re in an accident, but it can lower your premiums.

Join the Parent Policy

Buying insurance for a 17-year-old on your own can be incredibly expensive. Adding a 17-year-old to a parent’s policy isn’t necessarily cheap, but it’s likely to be cheaper than separate insurance.

According to Car and driverBuying insurance for a teenager separately can be up to twice as expensive as adding it to a parent’s policy.

Driving an older car

Driving an older, less valuable car can be a good way to lower your insurance costs. In the event of a major accident, the insurer will have to pay much less if the car is totaled than if you totaled a brand new vehicle.

Limit unnecessary coverage

Some auto insurance, such as liability insurance, are absolutely necessary, but there are also​​​​​​other types of insurance that are good to have but not necessary in every situation.

Accident insurance covers the cost of repairing or replacing a car damaged in an accident. If you drive an old beater, you may not need collision insurance because the payment would be negligible and you’d rather save on premiums.

Comprehensive coverage is similar but covers non-accident damage such as theft or weather damage.

Check out the discount options

Most insurance companies offer a wide range of discounts that can help you save money. Bundling is a common discount that allows you to pay less if you get multiple types of insurance from the same company.

A discount that may be relevant for younger drivers is a good student discount. Some insurance companies will reduce a student’s premium by up to $70 a month or $840 a year if they get good grades.

Typical requirements are to maintain a B average in high school or college. Keep in mind that your insurer will want proof, so be prepared to send a copy of your report card or transcript.


Consider car insurance based on usage

A good way for both young drivers and adults to save money is to sign up for a Usage Based Insurance (UBI) plan.

πŸš™ More information: Dive into the world of usage-based insurance with our in-depth reviews Root insurance and Karma drive to see if they suit your driving style.

With UBI, your insurer collects data about your driving and uses that data to determine the cost of coverage. Typically, you plug the device into your car’s diagnostic port and the device will report your driving habits to the insurer.

The insurance company will collect data on when you drive, how far you drive and how often you brake too hard or accelerate too fast. Depending on how you drive, you can save up to 15% per year.

The average driver puts about 11,500 miles on their car each year, so if you drive fewer miles, UBI can be a good way to save money. It will also benefit you to be a careful driver and not crash or accelerate too quickly.

Some insurers even offer a pay-as-you-go plan, charging you a small base amount plus a fee for each mile driven.


summary

Car insurance for a 17-year-old can be expensive, running upwards of $5,000 a year. However, insurance gets much cheaper as you get older, and with some effort, such as shopping around and looking for discounts, you can often find insurers with much more affordable premiums.

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