The words “bargain” and “insurance” probably shouldn’t be used together, especially when looking for the lowest insurance prices for drivers under 21. In an attempt to save some money, let’s introduce you to some of the factors that impact auto insurance rates, and find out if you can lower the price of the next policy you buy.
The make and model of vehicle on the policy is a large factor in finding the most economical car insurance for drivers under 21. Vehicles with higher performance, a lack of advanced safety features, or a track record of large liability claims will cost quite a bit more to insure than more modest models.
The table below estimates insurance costs for a selection of the most economical automobiles to buy insurance for.
|Vehicle||Estimated Cost for Full Coverage|
|Ford Escape XLS 2WD||$4,187|
|Honda Accord EX 4-Dr Sedan||$4,193|
|Honda CR-V EX-L 2WD||$4,250|
|Ford Explorer XLT AWD||$4,662|
|Toyota Tacoma 4WD||$4,670|
|Dodge Grand Caravan SE||$4,662|
|Ford Edge SE AWD||$4,912|
|Chevrolet Malibu Hybrid||$4,975|
|Chevrolet Impala LT||$4,982|
|Volkswagen Jetta LE 4-Dr Sedan||$4,975|
|Toyota RAV4 Limited 4WD||$4,980|
|Chevrolet Equinox LT AWD||$4,975|
|Dodge Ram 3500 Crew Cab Laramie 2WD||$5,035|
|Ford F-150 FX4 4WD||$5,045|
|Jeep Wrangler Unlimited Sport Islander Package 4WD 4-Dr||$5,035|
|Ford Focus SEL 4-Dr Sedan||$5,221|
|Hyundai Elantra Blue 4-Dr Sedan||$5,227|
|Honda Odyssey EX-L||$5,284|
|Toyota Camry SE||$5,289|
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Price data assumes single male driver age 20, no speeding tickets, no at-fault accidents, $1,000 deductibles, and New Jersey minimum liability limits. Discounts applied include claim-free, and safe-driver. Prices do not factor in vehicle garaging location which can change coverage rates greatly.
By looking at the data, you can infer that vehicles like the Ford Escape, Honda Accord, Honda CR-V, Toyota Prius, and Ford Explorer are likely to be the less-costly vehicles to insure for minors. The price of auto insurance will be higher anyway just because there is more claim risk for drivers under 21, but in general those specific models will tend to have the lowest prices compared to all other vehicles.
Finding good, affordable auto insurance is difficult, and determining which company quotes the cheapest car insurance rates for drivers under 21 will take even more rate comparisons.
Each insurance company has their own formula for establishing rates, so we need to take a look at the car insurance companies that tend to have lower prices in Newark. Keep in mind that Newark car insurance rates are determined by lots of factors that may substantially change the price you have to pay. This price variation is why drivers need to shop around to find the cheapest car insurance quotes for drivers under 21. Insurance rates can be altered by many things and can decrease or increase without notice, so the most economical option two years ago may now be costing you a lot of money.
Best Cheap Insurance Rates for Minors
|Rank||Company||Cost Per Year|
|3||New Jersey Manufacturers||$1,271|
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21st Century may offer some of the best car insurance rates in Newark at around $1,078 a year. Travelers, New Jersey Manufacturers, Palisades, and Penn National also qualify as some of the most economical Newark, NJ car insurance companies.
As shown in the table above, if you currently have a policy with Palisades and switched to 21st Century, you may see a yearly price reduction of upwards of $276. Insureds with Penn National could save as much as $301 a year, and Allstate policyholders might lower prices by $400 a year.
Remember that these estimates are averaged for all types of drivers and the different vehicles they drive and are not factoring in a specific location for drivers under 21. So the company that fits you best may not even be in the top 19 companies in the list above. That point stresses why you need to compare rates from multiple companies using your own personalized driver profile and vehicle information.
For minors, one of the big factors that are used to help calculate the cost of insurance is your zip code in Newark. Areas with high crime rates or more dense population tend to pay slightly more, whereas areas with less congestion benefit from lower coverage costs.
The next table sorts the most costly cities in New Jersey for drivers under 21 in which to buy car insurance. Newark shows up at #1 with an annual premium of $2,572 for car insurance, which is around $214 monthly.
|Rank||City||Premium Per Year|
|5||West New York||$2,431|
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Prices are comparative as specific location information can alter premiums noticeably.
Price comparison of only insuring for liability
Buying cheaper car insurance should be important to most drivers, and one easy way to buy cheap insurance for drivers under 21 is to buy only liability coverage. The chart below shows the comparison of yearly insurance costs with and without physical damage coverage. The costs are based on no claims or driving violations, $500 deductibles, single marital status, and no discounts are factored in.
On average, physical damage coverage on your policy costs $3,012 per year more than buying just liability insurance. That may make you wonder if full coverage is worth the money. There isn’t a written rule of when to exclude physical damage coverage, but there is a general convention. If the annual cost of your full coverage insurance is more than around 10% of the settlement you would receive from your company, then you may want to consider only buying liability coverage.
The example below shows how choosing a deductible can change insurance costs when getting quotes for cheap insurance for drivers under 21. The premium estimates are based on a single male driver, full coverage, and no discounts are factored in.
The chart above illustrates that a 50-year-old driver could lower their car insurance rates by $396 a year by changing from a $100 deductible up to a $500 deductible, or save $594 by changing to a $1,000 deductible. Even younger insureds, like the age 20 example, could roll back prices as much as $1,296 every year by choosing a larger deductible amount. When choosing a higher deductible, it will be necessary to have emergency funds available to allow you to cover the extra out-of-pocket expense, which is the one shortcoming of high deductibles.
Why you should be shopping around
New Jersey car insurance rates are impacted by many factors that control the cost of having a policy. Improving your credit rating, buying a home instead of renting, or having an at-fault accident can trigger changes in premium resulting in some rates now being cheaper than competitors. In addition to those changes, insurance companies change rates every year in order to be able to pay unexpected claims. Unexpectedly high claims can result in a rate increase, while lower claim expenses can result in cheaper Newark car insurance rates.
To help illustrate this point, the data below shows which companies have the cheapest car insurance in Newark, NJ for a 35-year-old female driver with a good driving record, no prior claims, and a high credit rating. If we compare prices based on her current risk factors, 21st Century might quote the best car insurance rates in Newark at $1,592 annually. This is $260 less than the average price paid by New Jersey drivers of $1,852. Travelers, New Jersey Manufacturers, Penn National, and Palisades are also included in the top five cheapest Newark, NJ auto insurance companies.
In this example, we will give the driver from the above example a claim or two, a lower credit rating, and a speeding citation. Since each insurance company has a unique formula for setting prices, analyzing rate quotes most likely will result in a substantially altered list of the cheapest companies as shown below.
The Hartford now has the lowest price in Newark, NJ with Allstate, USAA, Mercury, and Travelers also having competitive pricing. This example demonstrates why it is so important to perform an extensive rate comparison when trying to find cheap insurance rates for drivers under 21.
Insurance prices are calculated by many factors and change substantially, so the most economical company three years ago may now be quite expensive.
How to find more affordable car insurance for drivers under 21
Below you’ll find many penny-pinching ideas that can help New Jersey drivers get cheap auto insurance.
- Increase deductibles to save money
- Do not pay for full coverage if not needed
- Buy vehicles with five-star safety ratings
- Good credit can save money
- Save money by staying claim-free
- Bundle home and auto and earn a discount
- Compare prices frequently to find the best deal
That last tip is certainly crucial, as we pointed out in this article. Prices in Newark can change considerably based on profitability, so don’t be tentative to change to a new company if a cheaper rate is available.
Brand loyalty is not necessarily bad, but it isn’t a good idea if your bullheadedness ends up costing you a wad of cash every year. Take a few minutes and shop around to find cheaper auto insurance for drivers under 21.
If you have questions and prefer to get some professional advice when shopping for cheaper insurance for minors, the agents below can aid you in deciding which auto insurance policy would work best for you.
To locate a Newark car insurance agency near you, click the button at the bottom or click here to compare prices now.
Ed Young Agency
942 S Orange Ave – Newark, NJ 07106 – (973) 375-0003
Halsey Street Agency Inc
199 Halsey St – Newark, NJ 07102 – (973) 621-0955
Goker and Associates Insurance Agency
121 Elizabeth Ave #101 – Newark, NJ 07108 – (908) 344-7577
Milwaukee Insurance Co
10 Park Pl – Newark, NJ 07102 – (973) 648-3000