How to Save Money on Teen Car Insurance
Teen drivers can pay several times more on their car insurance than drivers in their late-20s and early 30s. But that doesn’t mean you need to bite the bullet and sign on the dotted line with the first insurance offer you receive. In fact, if you play your cards right, you can save a huge sum of your money on teen auto insurance policies.
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8 Ways to Save on Teen Car Insurance Premiums
On average, a 16-year-old driver will pay between $2,400 and $2,600 for the most basic car insurance policy. This is significantly higher than the $1,000 or so that a 20-year will pay, and this drops to $800 for someone aged 22 or higher.
A young driver is more likely to be involved in an accident according to the Centers for Disease Control and Prevention (CDC). This means they are more likely to claim on their insurance policy, which is why insurance quotes are so high.
Don’t worry, though, as you can bring these car insurance rates down with a few simple tips.
1. Get a Safe Car
Every teenager wants a fast and flash sports car. They want something they can show off to their friends, something that will impress in the school parking lot and something that is loud, proud, and stylish.
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However, buying them a sports car is one of the worst things you can do for many reasons.
Even if you find a sports car that is cheap and well within your budget, it will still cost a lot more to insure and won’t afford you much room when choosing optimal coverage and increasing the deductibles. For this reason, a sports car is a liability, and that’s not the only reason, as young drivers are also more likely to be involved in an accident and to suffer serious injuries if they are driving a car like this.
Instead, look for a car that has been fitted with safety features and anti-theft features, including air bags, anti-lock brakes, seatbelt alarms, emergency braking, parking cameras, power steering, and more.
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It can be a new car or an older car, it doesn’t really matter, as long as the car has those features.
2. Get Good Grades
Car insurance companies are encouraged to offer good student discounts to young policyholders. College students can save if they have at least a B average, and this discount could be as much as 25%.
This discount varies greatly, however, and it is not offered by all providers.
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Check with your chosen car insurance provider to see if they offer such a discount and if they do, work on keeping those grades high so you can take advantage of it.
3. Try Bundling
If you are a parent buying an auto policy for a child, look into multi-car and multi-policy discounts. The former allows you to add several cars onto the same policy, which is much cheaper than if you were to get separate policies.
As for bundling, this combines multiple types of insurance policies into one, including homeowners insurance and car insurance.
4. Looking into Driving Courses
A teenage driver seeking to save on insurance costs should look into driver’s education courses and defensive driving courses. These are some of the most generous insurance discounts and can save anywhere from 5% to 10% on the cost of those monthly premiums.
5. Look into Other Discounts
Driving courses are not the only way to secure cheaper car insurance quotes. You can get a discount if you live on a college campus or drive very little and agree to the insurer placing a telematics device in your car.
These devices will track how many miles you do and gauge what sort of driver you are. The insurer will then use this information to get an accurate representation of your driving habits and offer you a more accurate quote.
6. Stay Safe
A safe driving record is paramount if you want to get the most comprehensive coverage at the lowest possible price. The more years you spend on the roads without making claims for bodily injury or property damage, the cheaper your car insurance quotes will be in the future.
If you think quotes are high now, wait until you have an accident, make a claim, and then renew.
Car insurance is all about risk and liability. Your risk is high when you’re young, as young drivers are more likely to make claims, but these risks are even greater for young drivers who have been involved in an accident or have picked up a ticket for speeding.
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7. Check Your Credit Score
A good credit score is hard to acquire and maintain if you’re a teenager, but credit scores are always factored into the equation when you’re applying for insurance. The more your score increases, the more likely you are to be offered a respectable rate.
This won’t prevent you from paying much more than drivers older than you, but it could shave a few bucks off your monthly premiums and will also prepare you for the future.
8. Compare Quotes
Speak with an insurance agent, use comparison websites, and compare as many car insurance companies as you can.
Don’t use State Farm because your parents do; don’t use Geico because a friend recommended them. By all means, take recommendations on board and get quotes from those companies, but be sure to look into the many other providers as well, including Progressive, Liberty Mutual, Allstate, and the many other national and local providers out there.
Bottom Line: Getting the Best Rates
To summarize, if you want the best rates as a teenage driver, keep all of the following in mind:
- Maintain a good report card
- Maintain a clean driving record
- Look into bundling and multi-car discounts
- Compare and contrast as many companies and policies as you can
- Speak with an insurance agent if you have any questions
- Keep your credit score as high as you can
- Look into safe driver and defensive driver discounts