Virtually every teenager is excited to get their driver’s license. It’s one of the few “rites of passage” our culture provides for a youth becoming an adult. Parents, on the other hand, may be less ecstatic. A teen driver can increase worries and significantly lighten the wallet when it comes time to provide insurance. Increases of 50 to 100 percent are not unheard of when adding teenage drivers to a policy.
Parents are not without recourse when it comes to car insurance costs for their teenage driver. Following are 9 ways help take a bite out of those big insurance premiums.
It pays to do a little shopping. While premium rates may be pretty much standard across the industry for older drivers, such is not the case with teen drivers. Different companies may have different formulas for figuring the premium rates for drivers.
New or Existing Policy?
While you are shopping, also consider whether to simply add the teen to your policy or whether it might be advantageous to set up a separate policy. Your own driving record may have a big impact on this decision. The better record you have, the less expensive to just add them to your policy.
Youth/Adult Age Break
Also, keep in mind when your insurance provider considers a driver an adult. For many companies, that is at age 25, while for others it is at 23-year-olds. Whatever the age, lower rates should follow.
Choice of Car
Car makes and models affect insurance premium rates. Teens may have dreams of an ideal car to drive, but older, used vehicles often have better premium rates due to higher crash test rating scores and less likelihood of being stolen.
Whatever car is chosen, it is also financially advantageous to keep the car registered in the parent’s names. This too, can affect insurance rates.
Another important consideration is whether or not the insurance provider “assigns” a specific car to specific drivers. Cheaper rates will result if the teen driver can be assigned a specific car to drive. If so, your teen must understand that they may only drive the vehicle they are insured to drive. If they do drive another vehicle and are in an accident it may result in a significant insurance cost increase or even a refusal to renew the policy.
If your teen maintains a B average in school, they will likely qualify for a good student discount. Studies have shown a correlation between good grades and good driving habits. These discounts can be as much as 5% or even 10%.
A driver’s education course is a good option as well. As a matter of fact, some states require such courses for a teen to get their license at age 16. Otherwise, it will be at age 18. Driver’s education can provide up to a 15% discount.
Safe Driver Programs
Some insurance companies also provide “safe driver programs”. Teens who enroll and complete these programs may qualify for an additional 5% off of premium rates.