Car insurance is a must if you drive—but paying too much isn’t. In 2025, the cost of insuring your vehicle has gone up in many states, but the good news is that there are still plenty of ways to save. Whether you’re looking for the cheapest bare-bones coverage or a full protection plan without draining your wallet, this guide breaks down the best and most affordable car insurance options available in the U.S. right now.
Let’s explore which companies are offering the best rates, who qualifies, and how you can reduce your premium in today’s market.
Who Has the Cheapest Car Insurance in 2025?
Best for Full Coverage: Travelers
If you're looking for full coverage—which typically includes liability, collision, and comprehensive—Travelers stands out as one of the most budget-friendly options in 2025. On average, a full coverage policy with Travelers costs about $1,776 per year or $148 per month.
Best for Minimum Coverage: Mercury Insurance
For drivers who only need the state-required minimum liability insurance, Mercury offers some of the most competitive rates, with an average cost of $1,239 per year, or around $103 monthly.
Cheapest Insurance Based on Driving Profile
Not every driver will pay the same rate. Your age, driving history, and even your credit score can all affect your premium. Here’s a breakdown of the cheapest insurance options based on different profiles and situations.
Young Drivers (Age 20)
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Best Option: GEICO
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Average Cost: Around $4,100/year
Middle-Aged Drivers (Age 40)
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Best Option: Travelers
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Average Cost: $1,691/year
Senior Drivers (Age 70+)
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Best Option: Travelers
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Average Cost: $1,660/year
Drivers With a Recent Accident
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Best Option: Travelers
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Average Cost (Liability Only): $2,418/year
Drivers With a Speeding Ticket
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Best Option: Nationwide
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Average Cost: $1,932/year
Drivers With a DUI
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Best Option: Progressive
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Average Cost: $2,484/year
Drivers With Poor Credit
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Best Option: Nationwide
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Average Cost: $2,076/year
Teen Drivers on Parent’s Policy
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Best Option: Nationwide
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Average Cost: $2,808/year
Military Families and Veterans
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Best Option: USAA
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Average Cost (Full Coverage): $2,068/year
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Minimum Coverage: ~$597/year
(Note: Only available to active military, veterans, and their families.)
How Much Is Car Insurance in 2025?
The average cost of car insurance in the U.S. has increased, now reaching about $2,068 per year—a noticeable jump from the 2024 average of $1,459. Rising repair costs, supply chain disruptions, and natural disasters have all contributed to the spike.
Still, if you shop around and understand your options, you can find policies that are significantly cheaper than average.
How to Lower Your Car Insurance Premium
Even if you’re not in the “cheap to insure” category, there are plenty of ways to reduce your monthly payments. Here are some smart strategies to keep your rates low:
1. Compare Rates Regularly
Insurance prices change all the time. Experts recommend comparing quotes at least once a year. Switching providers could save you hundreds annually.
2. Increase Your Deductible
Raising your deductible (the amount you pay out of pocket before your insurance kicks in) from $250 to $500—or even $1,000—can result in meaningful savings. Just make sure you can afford that cost if you ever need to file a claim.
3. Take Advantage of Discounts
Many insurers offer discounts for:
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Good driving behavior
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Low annual mileage
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Being a student with good grades
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Bundling multiple policies (e.g., auto + home)
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Installing anti-theft devices or driver safety features
4. Use a Telematics App
Programs like Nationwide SmartRide or USAA’s SafePilot track your driving habits through a mobile app or plug-in device. If you’re a safe driver, you could score a significant discount.
5. Take a Defensive Driving Course
Some insurance providers offer lower rates if you complete a certified driving course—especially for senior or teen drivers.
6. Drive a Low-Cost-to-Insure Vehicle
Some vehicles naturally come with lower insurance premiums. Look for models with high safety ratings, low repair costs, and low theft rates.
Most Affordable Vehicles to Insure in 2025
Your car itself plays a huge role in your insurance cost. In general, SUVs and sedans with strong safety reputations and low repair costs are cheaper to cover. Here are some of the cheapest-to-insure models this year:
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Mazda CX-5
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Honda CR-V
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Subaru Outback
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Hyundai Kona
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Kia Niro
According to recent reports, insuring one of these vehicles could save you up to $1,000 per year compared to more expensive or risk-prone models.
Quick Comparison Table: Cheapest Insurance by Category
| Situation | Best Insurer | Estimated Annual Cost |
|---|---|---|
| Minimum Coverage | Mercury | ~$1,239 |
| Full Coverage | Travelers | ~$1,776 |
| Liability-Only Coverage | GEICO | ~$492 |
| Drivers Age 20 | GEICO | ~$4,105 |
| Drivers Age 40 | Travelers | ~$1,691 |
| Seniors (Age 70+) | Travelers | ~$1,660 |
| Post-Accident Drivers | Travelers | ~$2,418 |
| Good Record Drivers | Nationwide | ~$1,452 |
| Speeding Tickets | Nationwide | ~$1,932 |
| At-Fault Accidents | Nationwide | ~$2,532 |
| DUI on Record | Progressive | ~$2,484 |
| Low Credit Score | Nationwide | ~$2,076 |
| Teen Drivers (On Parent Plan) | Nationwide | ~$2,808 |
| Military/Veterans | USAA | $2,068 (full), $597 (min) |
| Safe Drivers (U.S. News) | Erie | ~$1,532 |
2025 Insurance Market Trends
As the industry adapts to higher repair and replacement costs, insurance premiums have trended upward nationwide. Factors contributing to these increases include:
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Tariffs on imported auto parts
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Climate-related damages (floods, fires, storms)
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Labor shortages in repair shops
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Increased vehicle prices and repair costs
States like California, Arkansas, and Pennsylvania have seen increases between 7%–9% so far in 2025. That means now, more than ever, it’s important to compare rates and look for hidden savings.
Final Thoughts: How to Get the Best Deal on Car Insurance in 2025
With premiums on the rise, being proactive about your car insurance is critical. Here’s how to stay ahead:
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Shop around and get quotes from at least three insurers.
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Consider switching if your premium increases—even with your current provider.
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Ask about all available discounts.
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Use telematics if you’re a safe, low-mileage driver.
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Don’t overpay for full coverage on an old or low-value car.
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Check if you're eligible for military-related savings with USAA.
Whether you're insuring your very first car or trying to cut costs after years with the same company, 2025 is a great year to re-evaluate your options.
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