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

The cost of car insurance for 25-year-olds is $3,207 per year, or $267 per month, on average. Average insurance rates go down by about 11% when drivers turn 25, but the discount from the extra year is not significantly higher than year-to-year changes in a driver’s early 20s.

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We found the cheapest car insurance for 25-year-olds is Erie Insurance, though drivers should shop around as no single insurance company is the most affordable for everyone.

Below, we analyzed car insurance rates for 25-year-olds by a variety of factors including age, gender, company and location.

Read on to find car insurance costs for 25-year-olds by ...

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

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

AgeAverage annual premium

Do car insurance rates go down at age 25?

Yes, but there is nothing unique about the change in rates from 24-years-old to 25-years-old. The average cost of car insurance went down from $3,600 a year to $3,200 per year when our driver turned 25, a decrease of 11%. However, our sample driver saw similar or even larger drops in costs in one-year differences for other ages from 18 to 25.

The cost of car insurance typically goes down as you age, as long as all other factors affecting rates are held equal. In other words, there's nothing unique about car insurance rates for those under 25.

Young drivers should also note that insurers may price you not just based on age but also based on experience. Car insurance for a 25-year-old new driver will cost more than car insurance for a 25-year-old with nine years of driving experience.

25-year-old males will pay slightly more for car insurance than 25-year-old females

For younger drivers, there is a noticeable difference in the cost of car insurance between males and females. However, at age 25 that difference begins to narrow. We found the difference in average cost of car insurance for 25-year-old males and females was only 2.5%.

AgeAnnual premium - maleAnnual premium - femalePercent difference

This gap is smaller than that of age 24 — 6% — and much smaller than the gender differential for drivers in their late teens. For example, on average, we found 18-year-old men's car insurance may cost approximately 11% more than the female equivalent.

In certain states, you won't see any difference between car insurance costs for males and females. These states have fully or partially banned using gender as a variable in setting rates:

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

How company quotes differ for 25-year-old car insurance

Any given insurer will offer you a different rate based on the factors they use to measure the riskiness of a driver. From our sample insurers, Erie Insurance offers the cheapest rates for 25-year olds, with an average cost of $1,518 per year, 53% lower than our overall average of $3,207.

The second cheapest insurer is USAA, with an average yearly premium of $1,673.

But Erie is only available in 12 states plus Washington D.C., and USAA clientele is limited to current or former military members. Of insurers with widespread availability, GEICO has the most affordable rates for 25-year-olds at $2,100 per year on average.

InsurerAnnual premium
State Farm$2,688

You should always shop around multiple insurers as you never know which could offer you the best rate. One insurer could be the cheapest if you want bare minimum coverage, while another could be the most affordable for those seeking a cheap full coverage policy. So many individual factors are incorporated into car insurance quotes that there is no single best fit for everyone.

Best car insurance companies for 25-year-olds by state

Every state regulates insurance differently, and car insurance prices fluctuate from state to state. We looked at the average cost of car insurance for 25-year-olds in the 10 most populous states and also provided a cheap insurance recommendation for each.

With an average cost per year of $1,510, North Carolina is the cheapest state for 25-year-olds, with rates lower than half the overall average.

Michigan, on the other hand, is extremely expensive for 25-year-olds (and most ages) compared with other states. Its rates are just under three times the overall average.

StateAverage 25-year-old annual premium
North Carolina$1,510
New York$2,960

Although our quotes represent an average — and thus not necessarily indicative of the best insurer for you — we've compiled recommendations for the cheapest insurance companies by state for the 10 most populous states in the country. Use these recommendations as a starting point for shopping around for your quote.

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

StateInsurerAverage annual premium
FloridaState Farm$2,548
GeorgiaGeorgia Farm Bureau$1,451
IllinoisState Farm$1,468
New YorkGEICO$2,244
North CarolinaGEICO$564
OhioState Farm$1,451
TexasState Farm$1,658
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 to find cheap car insurance when you turn 25

The keys to getting cheaper car insurance are the same at 25 as they are at any other age:

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

Below we provide a brief guide to utilizing these strategies to get the cheapest auto insurance possible.

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

As our data above shows, the exact same driver profile can get a variety of rates for equivalent coverage. The savings could even be up to thousands of dollars in extreme cases. To take Michigan — the most expensive state — as an example:

InsurerMonthly premium
Frankenmuth Mutual$323
Auto-Owners Insurance$325
State Farm$468

To summarize:

  • If you're a 25-year-old former or current military member who qualifies for USAA, you can get car insurance for about $239 per month.
  • Progressive, widely available, quotes our 25-year-old driver at $302 per month.
  • But if you only shopped with Allstate or Hanover, you could end up paying thousands per month in premiums when similar options are available at a fraction of the price.

The easiest way to start your search is to shop for car insurance quotes online. When browsing, make sure to select the same coverage limits and features for each insurer, if possible, to ensure you're getting prices for comparable policies.

Check with insurers to see what discounts are available

Twenty-five-year-olds have likely aged out of ways younger people can save, such as remaining on their parents' policy or good student discounts, but insurers still offer them plenty of ways to lower their premium.

You should always check if an insurer offers discounts for:

  • Defensive driving: Insurers may reward you for taking a safe or defensive driving course.
  • Bundling: If you're also buying home or renters insurance, you could bundle the two policies with the same insurer for savings.
  • Safety features: If your car has anti-lock brakes or anti-theft devices, you may qualify for savings.
  • Payment: You're often able to get some minor savings if you pay your policy in full for its entire term, or if you opt for paperless billing.

Don't buy unnecessary coverage

Our advice is to buy as much coverage as necessary to ensure financial protection from costly events, but not all elements of auto insurance may be appropriate for every person. For example:

  • Purchase appropriate liability coverage: Liability coverage protects you against the costs of property damage or bodily injury in a crash for which you are at fault. Make sure you have liability limits that cover your total net worth. But if higher limits beyond your worth are an unreasonable expense, stick to what you can afford.
  • Only buy comprehensive and collision coverage if your vehicle is worth it: Comprehensive and collision insurance can be invaluable if you have a high-value car. But if your car is worth a few thousand dollars or less, you could be paying too much money to protect an asset that has little value.

When shopping, talk to an insurance agent to understand exactly which coverages are included in your policy so that you're not buying insurance beyond what is necessary to protect you.

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