Keeping teen auto insurance affordable
4 Ways to Reduce the Cost of Teen Auto Insurance
by Lynn Kirkpatrick
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.
Take the Next Step
- How much should my working teen contribute to auto insurance and gas?
- Use this handy cheat sheet from a 30-year veteran of the auto insurance industry to get the best auto insurance deal that you can.
- Help your teen get a smart financial start. Compare savings and money market account rates and open an account for them today.
- It's tough raising kids today! You need every time and money saving idea you can find. That's why you'll want to get our free weekly Dollar Stretcher for Parents newsletter. You'll find great ideas designed just for parents that will help your family 'live better...for less'! Subscribers get a copy of our ebook Little Luxuries: 130 Ways to Live Better...For Less for FREE.
Lynn Kirkpatrick writes for askforinsurance.com where you can learn the difference between term and whole life insurance.
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