Getting out on the road as a newly licensed teen driver is a amazing time in your life, but it can also be frustrating financially for both the teen and their parents. Regardless of who's paying for the bill, auto insurance costs for teen and young adult drivers tend to be surprisingly high compared to the same rates for slightly older and more experienced adults. Yet there's some ways around paying nearly $300 a month for added coverage to a parent's policy and over $400 for independent teen coverage. Find out how to get lower rates with careful negotiation and shopping skills.
Look for Tracking Equipment
It's not surprising that a teen driver might prefer to keep their driving habits private, but consenting to some tracking by the car insurance company can result in a surprising discount. The actual discount varies based on the insurance company, so compare rates and inquire about the potential for savings before choosing a certain tracking program. Adult drivers often report savings between 10% and 30%, with rates being the same or lower for most teen drivers.
Choose Older and Safer Cars
Choosing an inexpensive older car with good safety features may not get you as much attention from your friends, but it will also give you measurable savings over models that are known to cost more to insure. Add together the higher risks faced by teen drivers with a sports car or overpowered SUV and you've got a recipe for expensive monthly premiums. Sedans, larger compact cars with good side impact ratings, and hybrid and crossover vehicles that aren't too big or fast are all good options. Cars with a lower value require less coverage for collision and comprehensive. If you can find a car that is only a few thousand dollars and arrange to replace it yourself in case of an accident, you can spend more on your teen's liability insurance without breaking the budget.
Shop Your Student Discount
High school and college students need to compare the various student discounts offered by different insurance providers because they can vary greatly. Some companies specify a GPA or letter grade average you must maintain in order to qualify for the discount. Students that may need to reduce their credit hours in order to work or take care of family members will want to find a policy with a low minimum attendance requirement so they don't lose the discount as they adjust their course load.
Invest in More Training
You're never too young to take a defensive driving course, attend private driving lessons, or even take some online classes that provide certificates. It's rare, but some insurance policies don't give discounts for teen drivers taking these courses. Most companies are happy to take at least a few percent off of the annual premium in exchange for teen drivers taking courses or training every few years. If nothing else, some hands-on driving instruction from the parents can still improve car insurance rates over time as long as the teen drives safer and avoids accidents. Any help to prevent both minor and major accidents saves money on auto insurance rates in the long run, and teen drivers have a higher chance of getting into accidents than other drivers.
Finally, reducing certain parts of common insurance policies can make teen auto insurance cheaper. But be careful when reducing coverage without increasing your personal savings in return. If you drop the coverage that pays for your teen's car, you'll need to pay for the repairs and replacement yourself. This is one of the biggest reasons when a teen should choose a used car rather than a new one that requires comprehensive insurance at a much higher cost.