Best Car Insurance for Millennials
The most affordable insurer for you will depend on your age, credit and driving history. Finding the right company can help millennials save more than $130 per year.
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Nationwide is the best car insurance company for millennial drivers, based on this analysis of the largest insurance companies in the United States. When it comes to drivers with average or worse-than-average credit, Nationwide was often the most affordable option.
Both Geico and Progressive were also strong options for millennial drivers looking for good rates. Geico, in particular, offers a top-rated app, which is a major factor as more insurance is handled online.
The millennial generation is in an unusual spot. Long discussed as a younger group, millennials are now 25 to 40 years old. Their arrival at stages of financial independence and life milestones, such as buying a home and starting a family, has come through a slew of economic disruptions, including the COVID-19 pandemic.
Cheapest insurance for millennials: Nationwide
Nationwide is the best car insurance company for millennial drivers, based on this analysis of the largest insurance companies in the United States. When it comes to drivers with average or worse-than-average credit, Nationwide was often the most affordable option.
Both Geico and Progressive were also strong options for millennial drivers looking for good rates. Geico, in particular, offers a top-rated app, which is a major factor as more insurance is handled online.
The millennial generation is in an unusual spot. Long discussed as a younger group, millennials are now 25 to 40 years old. Their arrival at stages of financial independence and life milestones, such as buying a home and starting a family, has come through a slew of economic disruptions, including the COVID-19 pandemic.
Cheapest insurance for millennials with bad credit: Nationwide
Nationwide is recommended for drivers with below-average credit. The company's average rate for millennials with bad credit was $132 less per year than the next-cheapest major insurance company. Below-average credit increased average rates by 11%.
- Nationwide: Best for 25-year-olds with bad credit
- Geico: Best for 30-year-olds with bad credit
- Nationwide: Best for 35-year-olds with bad credit
- Nationwide: Best for 40-year-olds with bad credit
Geico offered the second-best rates for 25-year-olds with bad credit. Progressive had the second-best rates for both 35- and 40-year-old drivers. USAA also offered low rates but is only available to those with military ties. Millennials came of age as the college debt bubble took off, meaning debt and credit issues are unfortunately common and often affect rates.
Best-rated apps for major insurance companies
Millennials, for the most part, grew up in the digital age and are tech savvy. That means a higher level of comfort with online tasks as insurance companies create more avenues to interact with policyholders on the internet.
Every major company in the study has a phone app, and many use apps to track driving for telematics or pay-per-mile programs. Some of the apps are better than others, according to Apple and Android user reviews.
Company | AppStore rating (out of 5) | Google Play rating (out of 5) | Average |
|---|---|---|---|
| Geico | 4.8 | 4.7 | 4.75 |
| State Farm | 4.8 | 4.6 | 4.7 |
| USAA | 4.8 | 4.5 | 4.65 |
| Nationwide | 4.4 | 3.9 | 4.15 |
| Allstate | 4.8 | 3 | 3.9 |
| Progressive | 3.5 | 4.2 | 3.85 |
Tips for millennials looking to save money on insurance
Millennial drivers, like anyone else behind the wheel, are trying to get the most coverage at a good price. There are a few helpful things you can do to that end. Companies offer a variety of ways to save money on a policy.
- Hunt for discounts: Insurance companies offer discounts for things such as good driving, being a good student, installing anti-theft devices on vehicles or bundling policies. That last one could include renters insurance or homeowners insurance as millennials move into the homebuying stage.
- Enroll in usage-based insurance programs: Most major and some smaller specialty insurance companies will provide discounts if policyholders allow their driving to be tracked. To get the maximum benefit, you must drive smoothly and attentively. In some cases, there is a risk of higher prices.
- Work on improving your credit: Drivers with better credit get lower rates nearly universally. Staying on top of bills and paying off debt could lower your insurance costs.
- Get quotes from multiple companies: Looking at multiple options is always a good way to ensure you're getting a better deal. National insurance companies have the advantage of scale to keep prices down, but some local options can deliver low rates as well.
Pay-per-mile insurance options for millennials
Pay-per-mile insurance is one avenue for any driver looking to save money, especially anyone who works from home or doesn't use a car to commute. That type of insurance allows drivers to pay a lower base rate and then a small fee — usually less than 10 cents — for each mile driven.
The pandemic led to many more people working at home, and pay-per-mile is often cheaper than traditional insurance for remote workers. However, millennials are also leaving cities as they get to middle age, which means less access to public transit or easy walks to work. Some popular options for pay-per-mile coverage include:
- Metromile
- Nationwide SmartMiles
- Allstate Milewise
Frequently asked questions
Why is insurance more expensive for younger drivers?
Younger drivers tend to get in more accidents, meaning more expensive to insure. This is because of less experience behind the wheel and younger people being more prone to risky behavior.
What insurance do I need if I finance a car?
In most cases, you'll need comprehensive, collision and liability insurance. Every state requires a minimum amount of liability coverage. The company financing your auto loan will likely require collision and comprehensive, which protect your vehicle from accidents and other damage, such as hail or theft.
How much insurance do I need?
At the very least, you will need the state minimum level of liability. It's better to get more than the minimum, as accidents involving bodily injury frequently require a larger payout than a minimum policy can cover. If you have an expensive vehicle, would prefer not to deal with a large repair bill or just want your own vehicle protected, consider adding comprehensive and collision coverage.
How do I improve my credit?
The best ways to improve your credit score are to pay your bills in full and not use too much credit. It also helps to have older, established lines of credit, so if you are just starting out, establishing at least one line of credit is important. However, requesting too much credit in a short period of time can hurt your score.
Do I need insurance if I don't have a car?
If you are still doing a lot of driving, especially in terms of borrowing cars the answer is yes. If you are renting cars, you can pay for insurance from the rental company, but that's costly. If you allow your insurance to lapse, you will likely pay higher rates when you buy your next policy.
Methodology
To determine the best rates for millennials, quotes for a full coverage policy were collected for 25-, 30-, 35- and 40-year-old 2015 Honda Civic EX drivers in Ohio, Pennsylvania and Georgia with average or below-average credit.
This analysis used insurance rate data from Quadrant Information Services that was publicly sourced from insurance company filings. Quotes should be used for comparative purposes only.
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.