Keeping teen auto insurance affordable
4 Ways to Reduce the Cost of Teen Auto Insurance
by Lynn Kirkpatrick
The Car Purchase Project
Can Your Budget Handle a Teen Driver?
For teenagers, there is perhaps nothing more exciting than passing the driver's licensing exam and being permitted to drive on your own. Unfortunately for parents, this big step also comes with a big expense. Once your teenager is licensed, he or she will need to be included on your auto insurance policy. If they have their own vehicle, costs will be even higher. Teenage drivers account for more than nine percent of license holders in the United States, according to the Center for Disease Control and Prevention. Because of this, insurance companies typically have specific teen insurance rates. Read on to learn about four ways to reduce the costs of your teenage driver's auto insurance.
1. Shop Around and Compare
Although rates for adults and older drivers might be relatively standard across the board, many insurance providers have very different policy fees for young teenage drivers. Before you commit to any particular policy, spend some time shopping around and contacting a range of different providers. Be sure to give them your current family rate and see which company is willing to offer the best coverage at the lowest price. Robert Klein of the Center for Risk Management and Insurance Research at Georgia State University in Atlanta suggests that unless you have a history of accidents, "You are probably best off simply adding your teen driver to your own policy and paying the increased premium," rather than creating a new policy just for the teenage driver.
2. Choose a Safer or More Reliable Vehicle
The costs for your teenage driver's auto insurance policy will differ substantially depending on the type of car that he or she drives. Brand new and expensive cars will come with high insurance fees, but so will old cars that will undoubtedly need extensive maintenance in the near future. The best compromise is a safe and reliable vehicle that can help to keep insurance costs for your teen down to a minimum.
3. Ask About Honor Student Discounts
On the whole, those students with better grades are proven to also be more responsible behind the wheel. For this reason, insurance providers often give teenage drivers with honor roll grades or a B average a discount of up to 20 percent on their policy costs. If your students makes the grade, contact your provider to find out what kind of discounts or deals you can get on your own insurance policy.
4. Take Additional Safety Classes or Programs
In most states, teenage drivers are required to take driver training courses and safety seminars. However, many insurance companies still find that additional training or lectures can reduce the accident rates or number of alcohol-related deaths. Call your existing provider to find out if they offer any discounts for teenage drivers who have taken specific classes or workbooks, as this can often translate into 10 percent savings or more on your car insurance rates.
There is no avoiding the fact that adding a teenage driver to your auto insurance policy will increase your monthly rates. However, these tips can help to keep costs to a minimum and save you money.
Debt is preventing me from taking a vacation this year or the vacation I'd like to take this year! Tell us: Yes, debt is affecting my vacation plans! or No, we're going exactly where we want to go but we'd love to learn make our trip as inexpensive as possible!
Lynn Kirkpatrick writes for askforinsurance.com where you can learn what is the difference between term and whole life insurance.
Take the Next Step
- For more money-saving auto articles, check out The Dollar Stretcher Auto Section.
- Reduce the cost of your gasoline with a 'gas card'. Compare them now to find the best one for you.
- Are you getting the best auto insurance rate? See how much you could save with one click. Fast, free quotes, online comparisons, and instant access to ID cards!
- Before you buy or sell a vehicle, get all the facts. Edmunds.com will give you what you need to know to make a confident deal.
Share your thoughts about this article with the editor.