Getting your driver’s license for the first time can be an exciting milestone. It can give you a sense of accomplishment and freedom that you may not have had before. You can drive to work or school, run errands easily, or go on a spontaneous adventure. But when you just get your license, you’re considered a new driver, and getting car insurance for new drivers can be more expensive until you get some more experience under your belt.
What makes you a new driver?
A new driver refers to someone getting their driver’s license for the first time with limited or no driving experience. Because new drivers are just getting their driver’s license, they typically don’t have an official driving record or history.
New drivers may fall into the following groups:
- Teenagers getting a driver’s license after reaching legal driving age
- Adults who learn or start driving later in life, such as residents from places like NYC or New Jersey moving to the suburbs
- Adults who might have a gap in their driving record because they canceled their insurance when they sold their car in the past
- Immigrants or others who are new to the U.S.
Being a new driver in the U.S. is largely based on having a limited or non-existent driving history. Not having years of driving experience can hike up car insurance premiums as insurers may deem you a risk since there are no previous years to refer to. Similar to the way not having a credit profile can lead to higher interest rates on things like loans or a credit card, car insurance premiums may be higher when there is no verifiable history.
Why is car insurance for new drivers so expensive?
Car insurance for new drivers may be more expensive because of the level of risk. When determining your car insurance premiums, auto insurance companies look at things like your driving record and insurance history. This also includes how many years you’ve had your driver’s license.
If you recently turned 16 and got a license or just moved to the U.S., you don’t have a track record to show yet.
How many years of experience you have as a driver can be more important than your age. Some people think that your car insurance rate will go down automatically once you reach a certain age, but it’s not true; that’s just a myth.
Another reason car insurance may also be more expensive is if you can’t demonstrate a track record of safe driving or continuous insurance coverage over time. Driving discounts are typically connected to a verified driving history.
Also, if you’re a teenager or immigrant, you might not even have an established credit score just yet — which some insurance companies use to determine your rate.
How much does car insurance for new drivers cost?
All drivers’ car insurance premiums are based on risk. Each individual has a unique risk profile, and many factors are considered when setting rates. As a new driver, you might wonder how much auto insurance for new drivers costs? While it may be more expensive due to added risk, it’s hard to put a price tag on auto insurance.
New drivers come from all walks of life, and various factors contribute to the rate you get (new driver or not). Being a new driver is just one part of the risk assessment. But car insurers may look at your zip code, credit score, marital status, type of car, and more to determine the level of risk.
Insurance companies focus on risk and whether certain groups of drivers might be more likely to get into an accident when driving.
We also found that people who don’t have established credit histories (like immigrants) can pay about the same premium as someone with a DUI. However, credit isn’t used as a factor in all states. The age and type of vehicle typically have the biggest impact on your rate.
7 reasons why pay-per-mile coverage is ideal auto insurance for new drivers
There is no single new driver profile. The only signifier for a new driver is the lack of driving history. Whether you’re a student who just got a license or you moved out of a metro city to a suburb and traded your train commute for a car, you may be a new driver. Given your schedule and experience, you may not be driving very often.
If that’s the case, pay-per-mile coverage is ideal auto insurance for new drivers because you pay based on how much you drive. Why pay more when you may be able to pay even less based on the miles you drive? Let’s take a look at seven reasons why pay-per-mile coverage is good auto insurance for new drivers.
1. You don’t drive that much because you’re in school
If you’re a student, it’s likely you’re stuck in classes most of the day and aren’t driving as often.
Whatever your situation is, you probably don’t put too many miles on your car. So with pay-per-mile insurance, you could save money by paying for the miles you drive.
2. You got your license and started driving later in life
If you grew up in a major city that relies on public transportation, you may have never needed to learn how to drive or had a chance to learn. Maybe you decide to move to the ‘burbs, and now you need a license.
Perhaps you always let your partner drive, but now you want some independence to do things on your timeline. Even though in these cases you’re older and wiser, you’re still considered a new driver as you’re getting your license for the first time and have a lack of driving history. You may benefit from pay-per-mile car insurance if you don’t drive that often.
3. You took a break from driving and had a lapse in coverage
If there are gaps in driving experience and insurance coverage, you may be considered a new driver. Even though you have previous driving experience, auto insurers like to see continuous coverage over time.
In that case, you may have higher rates, but you can save with pay-per-mile insurance if you’re easing into driving and don’t rack up that many miles.
4. You just moved to the U.S.
You may be an experienced driver somewhere else but if you just moved to the U.S., you may be considered a new driver. As an immigrant, you might not have a driving or insurance record in the U.S. The good news is that lack of a driving history in the U.S. isn’t a factor in all states. If it is, it’s typically noted in the rule manual or underwriting guidelines.
It can feel frustrating, like starting from scratch as some insurance companies might consider you to have no driving experience or a motor vehicle report they can consider. Sadly, some insurance companies won’t accept an international license. But if that’s not the case, and you don’t plan on driving very often, you could lower your costs with pay-per-mile insurance. Unlike traditional insurance companies, Metromile focuses on someone’s actual driving, primarily how often you drive, to determine the price you pay.
5. You drive an older car which can be cheaper to insure
In general, it’s less expensive to insure an older car. Older vehicles tend to be easier to repair because parts are more readily available or cheaper for you or your mechanic to purchase and install.
A good way to save is by purchasing a used vehicle. Not only could you save big bucks by avoiding the brand-new sticker price, but you could also lower your expenses by removing collision and comprehensive coverage, which is designed to help you replace or pay for repairs to your vehicle. The extra coverage might come with a deductible that’s higher than the car is worth. This is because cars generally lose their value over time. If there are multiple people on the policy, it’s important to understand how the insurer assigns drivers to vehicles as it can impact the total cost. For example, if a policyholder has a new car, but you’re on the policy with an older vehicle, you may or may not see additional savings.
You can personalize your coverage with Metromile, giving you the confidence that your policy is right for your lifestyle or needs. Metromile’s pay-per-mile auto insurance offers four different levels of liability protection and choices for your comprehensive and collision deductibles so that you have greater control over how much you want to pay. If you’re looking for auto insurance for new drivers, this could be a good option that is customized for your needs.
6. You took a defensive driving course and may score a new driver discount
If you’re in search of car insurance for new drivers, you want to find affordable coverage. If you take a defensive driving course, you may be able to score a lower rate. In some states, Metromile offers discounts to new drivers who take a defensive driving class.
Having a defensive driving class under your belt demonstrates that you know the rules of the road and how to respond safely to dangerous situations when you’re behind the wheel. It also shows an insurance company you’re taking steps to become a safer driver.
7. Your car has safety features
If your car has safety features such as automatic seat belts, airbags, tracking devices, etc., you may get a lower rate with pay-per-mile coverage. In some states, Metromile offers discounts to drivers who have features that can improve safety while lowering the risk of theft.
Because these safety features might reduce the likelihood of getting into an accident or your car getting stolen, you may be eligible for a lower car insurance premium as a new driver.
How much could Metromile save me on car insurance?
There’s no doubt that car insurance for first-time drivers may be more expensive due to higher levels of risk and no track record to refer to. But pay-per-mile car insurance with Metromile could be good auto insurance for new drivers and keep costs more affordable if you’re not driving that much. Here’s a look at just how much money low-mileage drivers can save with Metromile:
*Average annual car insurance savings by new customers surveyed who saved with Metromile in 2018.
The bottom line
It can feel like a big step to get your license and be free to drive but you may be discouraged by the high cost of car insurance for new drivers. New drivers can consider pay-per-mile coverage as a way to lower costs if driving less while gaining more experience on the road. Remember, car insurance is based on many factors and you won’t always be considered a new driver. To find the best car insurance for first-time drivers, get a free quote with Metromile.