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As the parent of any newly licensed driver knows, buying auto insurance for a teenager is expensive. Even if he’s taken a driver’s education course, it’s common for car insurance premiums to go up anywhere from 50 percent to over 150 percent when you add a teenage driver to the policy.
Fortunately, there are ways to save, even when one of the drivers is very young. If you have a teenager who’s ready to get behind the wheel, keep reading for ways to find cheap, or cheaper, auto insurance.
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Table of Contents
The cheapest insurance for a teenage driver is an add-on to his parents’ insurance policy.
While a teen can get car insurance on his own on a separate policy, it will almost always be far less expensive for him to be added on to his parents’ policy.
The reason it’s usually cheaper is that the teen can indirectly benefit from discounts and such the parents receive. More mature drivers are also more likely to have vehicles with advanced safety equipment, which also brings down premiums.
The only time this isn’t the cheapest option is if the parents have cars that are very expensive to insure anyway and they have a certain kind of car insurance, which does not allow the family to designate the primary driver for each vehicle.
If all the parents have is expensive vehicles and the teen would be assigned to all of them, it’s probably better to buy him a less expensive car and get him his own policy.
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Most insurance companies and policies assign a primary driver to each vehicle in the household. If there are two cars, dad is the primary driver of his commuter car, and mom is the primary on the family vehicle.
Usually, they are considered secondary drivers on the other vehicle, meaning they are covered when they drive it, it’s just not the vehicle they drive most of the time.
If you have this kind of policy, it’s probably cheapest to add your teenager as a secondary driver to these two cars. Since someone else drives them most of the time, the risk is a bit lower for the new driver.
If you are going to get your teen his own car, or if he is buying one himself, get a car with the insurance in mind, not just the cost of the car.
For instance, while many teens love driving a sports car, it’s absolutely the worst kind of car for him to have if you want to keep insurance costs down.
In fact, everyone pays higher deductibles on sports cars, no matter what their ages, but young adults, especially men under the age of 25 pay a lot more.
There are two different things you can do when buying a teen a car. Car insurance companies love vehicles with lots of safety features.
So look for a car with airbags, anti-theft devices, crumple zones, etc. These can be found in older, used cars as well as new. Just do some research on the best models of the past several years, and you’ll find many good options in the used market.
The other thing you can do is to buy a car that is inexpensive enough that you can do without the comp and collision coverage.
This requires paying cash with no car loan, as all lenders require this coverage. Comp and collision is a major expense for anyone, but especially a teenager, who is four times more likely to crash than any other age group, according to the CDC . So doing without it can save quite a bit.
This means that the total cost of repairing or replacing that vehicle is the teen or their parents’ responsibility. This is why many parents buy their teens older cars worth less than $3,000.
If they wreck it, it’s not devastating financially. The cost of the vehicle is usually made up for in just a few months by not carrying comp and collision.
One of the easiest ways to lower premiums when adding a teen to your policy is to raise the deductible on your comprehensive and collision on every car on the policy.
The deductible is your out-of-pocket responsibility when you or anyone on your policy is at-fault in an accident.The typical deductible levels are $250, $500, and $1,000.
However, the higher the amount you agree to pay out of pocket, the lower your premiums will be.
Just as adults receive a discount when they take a defensive driving course, teens can receive a discount, anywhere from 5 percent to 15 percent depending on your insurance company, if they take a teen safety course.
This is not the same as the driver’s education course they take in order to get a license, but a special course designed to help teens avoid accidents, injuries, and fatalities.
Unfortunately, teen drivers are more likely to participate in risky behavior that increases their likelihood of getting a ticket, being in an accident, and dying in that accident.
Drivers aged 16 to 19 lead all other groups in the number of traffic violations and fatal car wrecks, according to the California Department of Motor Vehicles.
The other problem with young drivers is they just don’t have the experience to handle many of the situations they find themselves in. Of course, the only way to gain this experience is to drive, but they can take measures to reduce their risk so that they can get the experience they need.
That’s where teen safety courses come in. These classes help students to recognize and reduce things like not wearing a seatbelt, speeding, having too many distractions in the car, and using alcohol or drugs.
They can also further educate them on how to deal with everyday driving hazards.
While some insurance companies have their own programs for teens to complete, there are some national ones available.
The National Highway Traffic Safety Administration has set up a teen driving program to help reduce the number of accidents and deaths caused by teen drivers.
Check with your insurance company to see if this will help lower your premium.
Another safety measure is a graduated license. While some states have instituted a graduate licensing procedure for their teen residents, the National Safety Council says you can institute one in your home even if you don’t live in one of these states.
A graduated license is one in which a new driver does not have full driving privileges for the first year or two.
Depending on the state, teen drivers are restricted to only having one non-family member passenger. They are also allowed to drive only during certain hours without a waiver. There are other procedures as well, designed to help teens drive safer while gradually allowing them more autonomy.
One of the best things teens can do to save themselves or their parents’ money on their insurance is to concentrate on keeping their grades high. Not only will this help teens get into college, but many insurance companies give discounts off those high teen premiums if the teen makes Bs and above.
The reasoning behind this is that teens that are responsible enough to make good grades are going to be responsible behind the wheel as well. This usually means they will take fewer risks behind the wheel that will result in fewer accidents.
If you or your student makes As and Bs, be sure to ask your insurance company for a good student discount.
Also, be sure to let your insurance company know if the teen doesn’t drive to school every day. The premium you’re quoted usually assumes the teen drives himself to school.
The only way you’re going to know if you’re getting the cheapest car insurance for your teen driver is to get several quotes from different companies. Try a variety of companies, from large nationwide corporations to local providers and see what your best deal is.
Make sure you are getting fair comparisons. To do this you need to make sure that you are being quoted for the same level of coverage. While it’s a good idea to get quotes for different amounts, like one for a $500 and a $1,000 deductible, be sure to do this from each company.
For example, you may think that one company has the best deal until you see that instead of quoting you the recommended 100/300/50 amount of liability, they are quoting the state minimum amounts, which are usually far lower. Since your teen is more likely to cause an accident, this is not the time to be lowering this coverage.
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