Personal Finance

The Cost of Car Insurance for a New Driver Per Month

Getting car insurance for the first time can be an expensive endeavor, especially if you’re a new or young driver. But just how much does it cost per month for a new driver to get insured?

The average cost of car insurance for a new driver per month is typically between $150 to $300 depending on age, location, driving history and other factors. Teenage drivers usually pay the most at over $500 per month on average.

Why is Monthly Car Insurance So Expensive for New Drivers?

Insurance companies classify new drivers, particularly teens, as high risk due to lack of experience behind the wheel. Statistics back this up – drivers aged 16-19 are 4 times more likely to be involved in an accident than older drivers.

Some key reasons new drivers pay more per month for insurance include:

  • Higher accident likelihood – Teen drivers have crash rates 3 times higher than 20-year-olds
  • Overconfidence – New drivers tend to overestimate abilities and engage in dangerous behaviors
  • No prior insurance history – No demonstrated history of safe driving or insurance coverage
  • No no-claims bonus – Insurers award discounts for each claim-free year, which new drivers haven’t accumulated

Additionally, young male drivers pay some of the highest premiums due to tendency to speed, drink-drive, and get distracted easily.

Also Read: What is Comprehensive Car Insurance Coverage?

Average Monthly Cost of Car Insurance by Age

Car insurance rates differ considerably by age group. Here are the average monthly costs for new drivers by age:

  • 16 year olds – $632 per month
  • 17 year olds – $468 per month
  • 18 year olds – $413 per month
  • 19 year olds – $309 per month
  • 21 year olds – $232 per month
  • 25 year olds – $195 per month

As the statistics indicate, average monthly premiums exceed $500 for teen drivers ages 16-18. Costs start dropping closer to age 21 and by age 25 monthly payments fall below $200 typically.

So in terms of the concern, the average car insurance cost for a new driver per month is between $150 to $300 depending on exact age. Teen drivers can expect to pay over $500 monthly.

How New Drivers Can Save on Monthly Payments

Getting affordable car insurance rates is frustrating for new drivers but not impossible. Here are some of the best ways to save on monthly payments:

  • Compare quotes from at least 5 insurers to find the lowest rate
  • Ask about discounts available to students or new drivers
  • Consider usage-based auto insurance with driving monitoring programs
  • Take defensive driving courses to demonstrate lower risk
  • Reduce coverage limits or increase deductibles if finances allow
  • Have parents add teen driver as additional insured on family policy

Finding the cheapest car insurance for new drivers does require some work. But being a smart shopper and policyholder can yield decent savings on monthly premium costs.

Frequently Asked Questions on Monthly Car Insurance for New Drivers

How much is car insurance for a 16 year old per month?

On average, car insurance for a 16 year old costs $632 per month for full coverage based on industry rate estimates. Due to high accident rates for teen drivers, average monthly premiums typically exceed $500 until age 18.

Is it cheaper to pay monthly or annually?

Most insurance companies charge convenience fees for breaking payments into 12 monthly installments rather than paying for a full year upfront. So it’s always cheaper to pay annually if you have the funds available, which can save over $100 annually.

How can a new driver get the cheapest insurance per month?

The best ways to get lower monthly car insurance rates as a new driver are comparing insurer quotes, taking safety classes, limiting vehicle mileage, raising deductibles, and having an experienced driver co-sign the policy.

Does car insurance get cheaper each month for new drivers?

Unfortunately, premium costs do not decrease each month. Monthly payments stay the same for the 6-month or 12-month policy period. However, upon renewal, rates can go down if the new driver maintains a clean record. Significant monthly rate drops happen closer to age 25.

Can parents pay for a teen’s monthly car insurance?

Yes, parents can pay for adding their licensed teen as an additional driver on their own auto insurance policy. This allows the teen to take advantage of potentially lower family rates. But the parents’ monthly premium will still increase substantially.

Jim Collins
Jim Collins is a leading expert in savings accounts, offering profound insights into optimizing financial growth. With a keen understanding of insurance and policies, Jim provides invaluable guidance for securing a stable financial future.

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