Insurance costs are high at the best of times, regardless of our age. For teen drivers, however, it remains a significant headache for families to deal with.
It’s usually a day of celebration when our teens finally get their licenses and are free to take themselves here and there. It can be the end of a long transportation burden, but also gives teens a new sense of independence and responsibility. All of that can easily go out of the window when you see typical insurance rates.
According to an article put out on nerdwallet.com, the cost of full-coverage for 16-year-old licensed drivers is $6,613, and still as much as $2,733 for the minimum coverage. When they get to 17 years old, that only drops to $5,373 and $2,206 respectively. In other words, even the minimums are far above the national average for adults.
So, what can you do to bring those numbers down? In today’s blog, we’ll share 8 easy ways to find a cheap car insurance for young and teen drivers.
How To Get Cheap Car Insurance For Teens And Young Drivers
1. Combine Your Many Carriers into One
By the time your kids are grown up and learning to drive, your family probably already has multiple insurance types, possibly from different carriers. Kids getting their driver’s licenses means more insurance is being added to the portfolio, and chances are your shopping around will take you to yet another provider. Consider this: get all your insurance types consolidated under one carrier.
Whatever other insurance policies you’ve signed up for, a common example being home insurance, for instance, try to get all your policies from one provider. The reason is that many providers give multi-policy discounts, so the amount you pay overall will likely be less, not just individually on the kids’ car insurance policy.
2. Get a Scholarly Discount
High school and college teens can enjoy significant discounts on their insurance if they are high achievers with good grades. Valuepenguin.com found that Allstate had the highest single discount on offer at about 20 percent off the premiums, but that the best final price of $2,220 a year was from State Farm, down from $2,632m which represents a discount of 15.7 percent. Other providers in their investigation included Progressive, Geico, Nationwide, Farmers and Allstate.
To qualify for these kinds of discounts, you need to be aged 16-25 years, single, and enrolled full-time in high school, college or homeschooling. You need ‘B’ grades or a 3.0 GPA, or otherwise be able to prove you are in the top 20 percent of your class. You can also get it by being in the top 20 percent of the ACT, SAT, PSAT, TAP or PACT tests.
3. Make a Smart Choice of Car
A teen’s age is enough of a hindrance to getting cheap car insurance, so there’s no need to also throw in an expensive brand-new or high-specification car into the mix as well. A part of you might think that a new car with all the latest tech wizardry and Advanced Driver Assistance Systems (ADAS) would make insurance cheaper but this is simply not the case. Insurers currently see ADAS firstly as expensive additional equipment making the car more of a financial risk, and secondly an easy way for young and inexperienced drivers to get complacent and inattentive.
Choose an older, simpler car for your teen. You can still strike a nice balance of technology and function with age and stability. Older cars that have been through the depreciation cycle are less of a financial risk to insurers and therefore will help to bring down premiums. Don’t skimp on overall safety ratings, though.
4. Choose a Safe Car
Another key part of making a smarter choice of vehicle for your teen driver is to choose something that has been highly rated in safety by either the NHTSA or IIHS. Both of these ratings are highly regarded and are considered acceptable national safety standards. Testing is rigorous and insurers know it, which is why cars receiving higher ratings on these tests will ultimately be cheaper to insure.
This also helps to solve one of the other great worries of your teen getting their license, which is where you worry about their safety on the road. You don’t have to break the bank to also guarantee safety. Many older, cheaper models were also in receipt of high NHTSA/IIHS ratings when they were made, and those ratings still stand.
5. Tell the Insurer When They’re Away at College
Some drivers are frustrated by the fact that they’re paying insurance for young drivers on cars that aren’t being used for most of the year. Many kids go to college out of state or at least away from home and leave their cars behind. Did you know that you can inform many insurance providers when your teen is away from home and that the car isn’t currently being used day to day. This can result in lower premiums, at least for part of the year.
The other benefit of this approach is that your teen still has the coverage they need when they come home during the holidays and during vacation time between semesters. The insurance provider may have a distance requirement, such as your child having to be at least 100 miles away from the car, but that’s already the norm for a huge number of young Americans going off to college, be it in-state or out of state.
6. Take Advanced Driving Courses
One of the big risks for teen drivers is inexperience and lack of skill on the road. As new drivers, they are more vulnerable to a number of risks out on the road. This is an unavoidable fact in the beginning, but it’s one you can remedy with advanced and defensive driving courses. Major providers like Liberty Mutual and State Farm offer special programs that are focused on teen drivers specifically. Liberty Mutual’s is called teenSMART and involves a course designed to mitigate the six most common factors that cause teen car accidents.
Premiums can come down from 10-15 percent depending on the provider and course, and how well your teen achieves in it, of course. They are a worthy investment and are widely available nationwide. You should talk to your insurance provider about these provisions, either for in-house courses they offer or third-party courses in your area that they will recognize.
RELATED: 10 Car Driving Tips For Beginners
7. Look Into Use-Based Car Insurance
Use-based insurance refers to the practice of insurance providers installing tracking devices in cars, or sometimes using tracking via an app on your smartphone. By willingly signing up for these measures, you can translate good driving behavior into quick discounts. It’s hard to say how much you can get discounted because it’s tailored to individual policyholders, but it’s one of the easiest ways to get cheaper insurance if you are, generally speaking, a safe driver.
This one is great for teen drivers who are frustrated by insurance providers viewing them as an automatic risk because of the behavior of other teens past and present. It’s a quick way for these safe drivers to prove themselves as different from “the crowd” and enjoy lower premiums as a result.
8. Keep Deductibles High and Shop Around
Finally, you will always get more optimum results if you shop around for the right policy to suit your needs, and if you always offer to all providers a higher deductible that you’re willing to pay in the event of a claim being made. Raising the deductible is a good strategy for any driver looking to lower their insurance costs, but for teens it’s also a great strategy, especially when you know that the car isn’t going to be used for huge parts of the year, which lowers the overall risk.
As for shopping around, it’s also important not to exclude smaller local and independent providers from your search. You might think at first that there’s no way they will compete with “the big boys,” but often they surprise you with competitive discounts, especially if you get multiple policies.