Car Insurance Costs for 25-Year-Old Males and Females

On average, car insurance for 25-year-olds costs $3,207 per year, or $267 per month. When drivers reach the age of 25, their insurance rates drop by about 11% on average, but the discount from the extra year is not significantly higher than year-to-year changes in a driver's early twenties.

Erie Insurance has the cheapest car insurance for 25-year-olds, but drivers should shop around because no single insurance company is the most affordable for everyone.

Which companies offer the best cheapest car insurance quotes for 25-year-olds?

Any given insurer will offer you a different rate based on the factors they use to assess a driver's riskiness. Erie Insurance has the lowest rates for 25-year-olds among our sample insurers, with an average cost of $1,518 per year, which is 53% less than our overall average of $3,207.

USAA is the second cheapest insurer, with an average annual premium of $1,673.

However, Erie is only available in 12 states plus Washington, D.C., and USAA customers must be current or former military personnel. Geico has the most affordable rates for 25-year-olds among insurers with widespread availability, at $2,100 per year on average.

You should always shop around for multiple insurers because you never know who will give you the best deal. One insurer may be the cheapest if you only need the bare minimum of coverage, while another may be the most affordable for those looking for a low-cost full-coverage policy. Car insurance quotes include so many individual factors that there is no single best fit for everyone.

How do car insurance costs for 25-year-old males and females differ?

There is a noticeable difference in the cost of car insurance between males and females for younger drivers. However, at the age of 25, the gap begins to close, though 25-year-old males pay slightly more for car insurance than 25-year-old females. We discovered that the difference in average car insurance costs between 25-year-old males and females was only 2.5 percent.

This gap is smaller than that of age 24 — 6% — and much smaller than the gender differential for late-teen drivers. For example, we discovered that 18-year-old male car insurance may cost approximately 11% more than the female equivalent.

In some states, there is no difference in car insurance costs between men and women. These states have either completely or partially prohibited the use of gender as a variable in rate setting:

• California
• Hawaii
• Massachusetts
• Parts of Michigan
• Montana
• North Carolina
• Pennsylvania

How much is car insurance for a 25-year-old?

Young drivers pay disproportionately more for car insurance than older age groups on average, but each year they age can result in significant savings. For a 25-year-old, the average cost of car insurance is around $3,200 per year, or about $270 per month. This is nearly $4,000 less per year than the average 18-year-old.

Do car insurance rates go down at age 25?

Yes, but the change in rates from 24-years-old to 25-years-old is not unique. When our driver turned 25, the average cost of car insurance dropped from $3,600 per year to $3,200 per year, an 11% decrease. Our sample driver, on the other hand, saw similar or even larger drops in costs in one-year differences for other ages ranging from 18 to 25.

When all other factors affecting rates are held constant, the cost of car insurance typically decreases as you age. In other words, car insurance rates for people under the age of 25 are not unique.

Young drivers should also be aware that insurers may charge you not only based on your age, but also on your experience. A 25-year-old new driver will pay more for car insurance than a 25-year-old with nine years of driving experience.

What are the best car insurance companies for 25-year-olds by state?

Every state regulates insurance differently, and car insurance rates vary by state. We examined the average cost of car insurance for 25-year-olds in the ten most populous states and provided a low-cost insurance recommendation for each.

North Carolina is the cheapest state for 25-year-olds, with rates less than half the national average at $1,510 per year.

In comparison to other states, Michigan is extremely expensive for 25-year-olds (and most ages). Its rates are just under three times higher than the national average.

Although our quotes are averages and thus may not be indicative of the best insurer for you, we've compiled recommendations for the cheapest insurance companies by state for the country's ten most populous states. Use these suggestions as a starting point when looking for a quote.

The most affordable auto insurance company for 25-year-olds in each of the 10 largest states

USAA was not used for these recommendations. It only accepts policyholders who are current or former military members. Without its exclusion, it offers the cheapest car insurance for 25-year-olds in Illinois, Michigan, New York, Pennsylvania and Texas.

How can you find cheap car insurance when you turn 25?

The keys to finding lower-cost car insurance at 25 are the same as they are at any other age:

• Shop between multiple insurers
• Seek out available discounts
• Obtain appropriate coverage (in other words, not too much)

We've put together a quick guide to using these strategies to get the cheapest car insurance possible.

Shopping between insurers can get you similar coverage at a lower price

As our data shows, the same driver profile can receive a wide range of rates for equivalent coverage. In extreme cases, the savings could amount to thousands of dollars. As an example, consider Michigan, the most expensive state:

To summarize:

• If you are a 25-year-old former or current military member who is eligible for USAA, you can get car insurance for around $239 per month.
• Progressive, a well-known insurer, quotes our 25-year-old driver $302 per month.
• However, if you only shopped with Allstate or Hanover, you could end up paying thousands of dollars in monthly premiums when comparable options are available for a fraction of the cost.

The most convenient way to begin your search is to look for car insurance quotes online. When shopping, choose the same coverage limits and features for each insurer, if possible, to ensure you're getting comparable policies at comparable prices.

Check with insurers to see what discounts are available

Twenty-five-year-olds have likely outgrown ways for younger people to save, such as remaining on their parents' policy or taking advantage of good student discounts, but insurers still offer them numerous ways to reduce their premium.

Always check to see if an insurer provides discounts for:

• Defensive driving: Insurers may give you a discount if you take a safe or defensive driving course.
• Bundling: If you're also buying home or renters insurance, you could save money by bundling the two policies with the same insurer.
• Safety features: If your car has anti-lock brakes or anti-theft devices, you may qualify for savings.
• Payment: You may be able to save some money if you pay your policy in full for the entire term, or if you choose paperless billing.

Don't buy unnecessary coverage

Our recommendation is to purchase as much coverage as is required to ensure financial protection from costly events, but not all aspects of auto insurance may be appropriate for everyone. As an example:

• Purchase appropriate liability coverage: Liability coverage protects you against the costs of property damage or bodily injury caused by a collision in which you are at fault. Check that your liability limits cover your total net worth. However, if exceeding your worth is an unaffordable expense, stick to what you can afford.
• Only buy comprehensive and collision coverage if your vehicle is worth it: If you own a high-value vehicle, comprehensive and collision insurance can be extremely beneficial. However, if your car is worth a few thousand dollars or less, you may be paying too much money to protect a low-value asset.

When shopping for insurance, speak with an agent to ensure that you understand exactly which coverages are included in your policy and that you are not purchasing more insurance than is necessary to protect you.