How To Buy Car Insurance For the First Time

How To Buy Car Insurance For the First Time

Find Cheap Auto Insurance Quotes in Your Area

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Finding car insurance as a first-time buyer can certainly be overwhelming. Insurers tend to charge first-time drivers much higher rates, regardless of age, because these drivers lack experience. In some cases, you can expect to pay $5,000 or more for car insurance in your first year.

We created a guide to help you better understand the process and help you save money when buying auto insurance for the first time.

How to get car insurance for the first time

When buying car insurance for the first time, shoppers will need to:

  • Gather personal and vehicle information.
  • Get an online quote or work with an insurance agent.
  • Get multiple insurance rates to compare quotes.

First-time drivers may not realize how much information is needed to get auto insurance quotes, and the process can be tricky to figure out for new shoppers the first time around. Below, we list all the items you'll need.

Once you have those materials ready, you can get a quote directly from most insurers on their websites or work with an insurance agent. We typically recommend getting quotes from at least three insurers to find your best rate.

What information you'll need when you get car insurance for the first time

When you're shopping for quotes, you will need some personal information on hand for you and anyone else listed on the policy:

  • Driver's license
  • Date of birth
  • Address
  • Occupation
  • Marital status
  • Education level
  • Driving history
  • Insurance history

Some of this information — driving history and location, most notably — will affect the cost of insurance for first-time drivers. You will also need information for your vehicle, including the vehicle identification number (VIN), date of purchase and person registered to the vehicle.

Having the year, make and model of your car ready is also important, as it will help provide you with the best and most accurate policy for your new car insurance.

Why first-time drivers pay more for car insurance than experienced drivers

Many factors affect car insurance costs, including location, demographic profile, driving history and experience. Driving experience is the most important factor when it comes to setting car insurance rates. Experienced drivers will pay far less than new drivers because insurance companies consider them lower risks for getting into an accident or filing a claim.

How much more new drivers will pay for car insurance

First-time drivers pose a higher risk to insurance companies and will pay more for coverage. On average, our sample data shows first-time drivers are paying about $4,529 per year for car insurance, whereas experienced drivers are only paying $1,427 per year.

This graph shows the cost difference of a driver with no experience versus 15 years' experience

These car insurance rates are for a 35-year-old California resident and shows the difference in cost between a new driver and an experienced driver.

The insurance quotes for new drivers are considerably higher. Geico is the most expensive, charging our sample driver with no experience $6,339 per year. Geico will charge a new driver $5,101 more for insurance than the same driver with 15 years' experience. Essentially, inexperienced and first-time drivers will be charged more, regardless of age.

How first-time drivers can find cheap car insurance

Drivers can find cheap car insurance if they:

  • Shop around and compare insurance rates.
  • Get the right amount of coverage.
  • Improve outside factors that may affect insurance rates, such as credit scores.

Shop around and compare insurance rates

You should get several quotes from multiple car insurance companies to determine which company will offer you the cheapest insurance quotes for first-time drivers. It's easy to compare free insurance quotes online. However, speaking to an independent insurance agent may provide you with multiple quotes to find the cheapest insurance for first-time car buyers.

While first-time drivers may have higher car insurance quotes than more experienced drivers, you may still save by comparing insurers. Different companies use different factors when calculating your rates, and some of the more well-known insurance companies may not necessarily offer the lowest possible rate.

Get the right amount of coverage

If you buy more car insurance coverage than you need, you'll be paying extra for protection you'll never use. That means one way to save money on car insurance is to only buy as much as is necessary for your situation. However, car insurance has many different types of coverages; below, we've provided a brief cheat sheet to guide you on how much of each type of insurance to buy.

Type of coverage
Is it required?
Do I need this coverage?
Bodily injury liabilityYes, except in FloridaAccident limits based on net worth
Property damage liabilityYes, in every stateAccident limits based on net worth
Collision and comprehensiveNo, unless you lease or finance a vehicleNeeded if your car is worth more than $2,000
Uninsured and underinsured motoristYes, but only in 22 statesAccident limits based on net worth if you don't have personal injury protection or collision insurance
Personal injury protection (PIP)Yes, but only in 14 statesNot needed unless your health coverage does not include auto-related injuries

As a first-time driver, you want to get car insurance that protects your net worth. You can certainly get more coverage for extra protection, but this will raise your insurance costs. To determine your net worth, add up your assets and subtract your debts. If your net worth is less than the minimum requirements for your particular state, and you're looking for the cheapest policy possible, you should only consider purchasing the minimum liability coverage.

While new drivers can compare car insurance online, an insurer will typically suggest certain levels of coverage.

It's important to understand the different types of coverage, requirements and how much car insurance you really need. Otherwise, you're paying out of pocket for unnecessary expenses.

Improve factors that affect insurance rates for first-time drivers

Many factors affect car insurance rates for first-time drivers. Some of them can't be controlled, such as age and location. But there are important factors, such as credit scores, that drivers can take steps to improve over the long term and get lower insurance rates.

If you have a low credit score, insurers think you are more likely to file higher claims, and insurers will thus charge you higher premiums. In the long run, gaining driving experience and being a safe driver will result in insurance companies charging you less.

Finally, you should apply for every car insurance discount available within your demographic and location when looking for cheap first-time car insurance. Sometimes you can see these discounts through a company's online quote tool, but you may be eligible for even more discounts if you talk to an insurance agent before finalizing your quote.

Methodology

We analyzed car insurance quotes from Allstate, State Farm, Progressive and Geico. Our sample driver was a single 35-year-old male who drives a 2015 Honda Civic EX. This driver had $15,000 of liability coverage per person injured and $30,000 of coverage for all injured persons. This sample driver also has $5,000 in property damage liability coverage. The only parameter that changed was years of driving experience, which was either zero or 15 years' experience driving.

ValuePenguin's analysis used insurance rate data from Quadrant Information Services. These rates were publicly sourced from insurer filings and should be used for comparative purposes only — your own quotes may be different.

Editorial Note: The content of this article is based on the author’s opinions and recommendations alone. It has not been previewed, commissioned or otherwise endorsed by any of our network partners.