Cheapest car insurance for an 18-year-old

Even a no-frills car represents a huge expense for the 4 million or so Americans working a minimum-wage job.

But it represents a bigger challenge in some places than in others. Young drivers in Rhode Island and New Hampshire will work nearly three times as long as their counterparts in Illinois to buy liability insurance that meets their state minimum car insurance requirements, according to a CarInsurance.com analysis.

We ranked states by the number of hours needed to buy coverage, comparing their cheapest car insurance for 18-year-olds with their minimum wage.

This is as cheap as insurance gets, and there are few trade-offs available to save further. For example, by law you can’t reduce your limits below the minimum amounts. And you can’t raise your deductible. There are no deductibles on liability insurance.

According to the Bureau of Labor Statistics, the average hourly wage was $24.57 in December 2014, up from $24.17 per hour a year earlier. The average annual outlay for liability car insurance, says the Insurance Information Institute, was $504 as of 2012.

This means an average worker could buy a year of liability car insurance with about 21 hours of work.

But consider an 18-year-old working an entry-level job. The average state minimum wage as of July 2015 was just $7.92 an hour. And teenagers pay much more for insurance: The average price of a year of bare-bones coverage was $841, according to rates gathered from national car insurance carriers.

At those averages, a year of state minimum liability insurance would require 106 hours of work.

Because both wages and car insurance rates swing dramatically, we looked at affordability by comparing the cost of legal-minimum auto insurance with each state’s minimum wage. Young drivers in Rhode Island and New Hampshire had it worst, with 174 hours required to buy the cheapest liability policy we found. A young driver finds much cheaper insurance in Illinois -- a year of liability insurance takes just 56 hours of work.

How much is car insurance for an 18-year-old?

We compared rates using the state’s cheapest ZIP code for a young driver with a clean record, good credit and previous insurance on a parent’s policy. We chose the least expensive rate we found. Unless you’re 18, male, a resident of the particular addresses we used and proud owner of a 1997 Ford Taurus, your quotes probably won’t exactly match ours, which are only a snapshot of available rates.

They are, however, a good indicator of the financial hurdle confronting teenagers who depend on their own car to commute to school or work.

What an 18-year-old pays for state-minimum liability

* Data missing or unavailable at time of publication

** States that have no minimum wage or a minimum wage lower than the federal wage are displayed at the federal minimum.

How young drivers can get more affordable car insurance

The cost of liability insurance has more to do with the driver than the car. (The insurance company isn’t going to fix your car, just the person’s you hit.) In your search for affordable auto insurance, these are the factors you have some control over:

• Your driving record: More than one violation or accident is going to hurt.
• Your credit: If it’s dismal, you’re seen as a bigger risk of a claim and thus charged more in many states.
• Your mileage: The less you drive, the less risk of your hitting someone.
• Your insurance history: If you’ve let your policy lapse, even for a few days, you’ll pay about 5 percent more than you would have otherwise, according to Insurance.com.
• Your insurance company: No two insurers offer identical rates, and even on state-minimum policies, premiums can differ by hundreds of dollars a year.
• Your car: If your car has a significantly higher rate of claims than most (because, say, it’s driven mostly by young drivers), your liability rates will reflect that risk.

Whether you're a parent or a teen, read our guide to car insurance for young drivers for plenty more information that can help you make the car insurance choices that are best for you.