Teen Car Insurance: Cheap Car Insurance

Teen drivers are significantly more likely to claim on a car insurance policy than adults. Car insurance companies offset these costs by charging higher rates, often 3x or 4x more than adult drivers. But by shopping smartly, comparing prices, and utilizing a few simple tricks, a teenage driver can save hundreds on car insurance premiums without sacrificing coverage.

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Why Young Drivers Pay More

Insurance is all about risk and probability. The more likely you are to claim, the higher your insurance costs will be. And because they can’t look into the future, they have to base this probability on statistics. They know, for instance, that a driver aged between 16 and 18 is between 1.5x and 2x as likely to claim as one aged between 18 and 20, and more than four times as likely as one over the age of 25.

A teen driver is three times as likely to be involved in a fatal crash than someone aged 20, and, according to the CDC, this age group accounts for 8% of the total cost of road traffic accidents, even though they make up for just 6.5% of the total population.

It’s not just the age group, either, as research also suggests that male drivers are twice as likely to claim as female drivers. All of these statistics are taken into account when establishing insurance premiums, which is why they tend to be much higher.

Cheap Car Insurance Quotes for a Teenage Driver

New drivers can expect to pay considerably more than experienced drivers with a safe driving record. This is especially true for 16-year olds, who are charged more than any other age range.  To give you an idea of just how different costs can be, take a look at these premium averages:

  • 16 = $3,900
  • 17 = $3,500
  • 18 = $3,100
  • 19 = $2,200
  • 20 = $2,000

Your age, car, record, and discounts (discussed below) will typically have more impact on the policy cost than the insurance provider you choose, but the rates still differ considerably. After getting a free quote from several top providers, we found that the following offered the cheapest rates on average:

  1. Geico
  2. State Farm
  3. Nationwide
  4. Progressive
  5. Allstate

Teen Car Insurance: Adding a Young Driver to your Policy

One of the best ways to save money with young driver insurance is to add them to your policy. If you have been with the same insurer for a number of years, there’s a chance they will contact you when your child is ready to drive. They likely know your children’s ages and use automated promotions to send them offers as soon as they are of age.

If not, contact them and get a quote and then compare this to quotes received from affordable car insurance providers.

Generally speaking, the average household can expect a price rise of around 150%, and the rate is much higher if the new driver is a male. 

Insurance Discounts for Teens

If you’re a good driver and a safe driver, you can save money on your quotes, even when you’re a teen driver added to your parent’s policy. There are numerous discounts that can help you, including:

Good Student Discount

If you have good grades, you can get cheap car insurance, it’s as simple as that. The rates will still be higher than what you’d be quoted as an adult, but good student discounts can save you between 5% and 10% every year. Generally speaking, you need at least a B average to take advantage of these discounts.

Living Away

If you’re a student living away from home, you can qualify for a discount. Some insurance companies offer as much as 30% off, but the average is around half this. To qualify, you need to be living away from home, such as on campus, while at school.

Defensive Driving

If you have completed a defensive driving course or other driver training, then you can get the best car insurance for less. These courses prove that you can handle yourself on the road and they greatly reduce your chances of making a claim.

Type of Car

One of the biggest things influencing car insurance rates is the type of vehicle you drive. A new car typically comes fitted with anti-theft and safety features, securing you a driver discount by reducing the chances of that car being stolen or involved in a serious accident.

The safest cars are all SUVs, which might not be the best or cheapest choice for new teen drivers. However, as long as you focus on a relatively new vehicle, and don’t opt for a sports car, you can secure a good price.

Low Mileage

You can get cheap car insurance if you drive very little and agree to a telematics device being added to your car. This device will be used to monitor your driving habits, focusing on how many miles you do. 

If you’re a teen driver doing just a handful of miles a day, this could be a great option and may save you between 30% and 50%.

Things that Could Increase Auto Insurance Rates

Numerous things can increase the cost of insurance coverage and this is true whether the young driver has their own policy or has been added to a household policy.

  • Minor Violation: A minor violation can increase your auto insurance premiums by as much as 40%. These violations include speeding tickets, which are far more common in younger drivers.
  • Major Violation: A major violation could double the cost of those premiums. These violations include DUIs and road traffic accidents.
  • Claims Record: How many claims you have will dictate how much your auto insurance coverage costs, so keep this in mind the next time you apply.

Bottom Line: Cheap Car Insurance for Teen Drivers

Teen drivers can be very expensive and if you need to add one to your policy, you can expect those rates to climb considerably. However, your kids need to learn somehow; they need to build a safe driving record, get some experience, and prove to auto insurance companies that they deserve a discount in the future.

So, let them get their learners permit, help them buy their first car, and encourage them to collect car insurance discounts and drive safely. That way, in just a few years, they’ll have the experience and the record needed to get even cheaper insurance.