While we can’t promise you that we’re going to take the sting out of these high premiums, we can share with you some helpful strategies to save you money on insuring your teen driver. There are savings opportunities out there for young drivers, but finding them can be a challenge. We’re happy to have done the legwork for you!
How to Save Money on Teenage Car Insurance for Teens
If you’re struggling with the cost of your new car insurance premium after adding a teen driver to your policy, don’t feel alone. Even though it’s cheaper than your teen buying their own insurance, parents who choose to add their teen to a family policy will find that their premiums will more than double (a 152% rate increase on average).
Even though your car insurance company or your agent may not have offered all or any of these ten savings strategies, being aware of them might save you hundreds of dollars (if not thousands) over the years your teen is on your policy. Without further ado, check out these money-saving tactics to lower your car insurance costs when adding your young driver to your policy.
#1: Take a Safe Driving Course
According to the National Safety Council, half of all teens will be involved in a car crash before graduating from high school. Having your teen enroll in and complete a defensive driving course at school or through a certified, private instructor will not only give you greater peace of mind when your teen gets behind the wheel, but it can also get you a nice discount.
Many insurers, reward young drivers with a discount for completing a driver safety training course. Teaching young, inexperienced drivers how to drive safely and defensively and helping them understand traffic laws can pay off handsomely for you.
#2: Keep Good Grades for Good Student Discounts
Good students tend to be more responsible drivers, and most large car insurance companies give a discount to teens who crack the books and earn good grades.
For instance, one insurer could offer one of the more liberal good student discounts by rewarding students with a “B-“ average (cumulative) a discount.
Others can require at least a “B” average to receive a good student discount until they’re 25 years old or in their last year of school. Some companies will require written proof of your child’s grades to give you a discount.
#3: Drive a Safe and Reliable Car
The type of car your teen drives will greatly impact their rates. As you can imagine, the rates for insuring a 2023 8-cylinder Chevrolet Corvette will be considerably higher than they will be for a 4- 4-cylinder 2017 Ford Focus.
Used cars are also typically less costly to insure than new cars. However, you may lose some of your discounts if your older vehicle lacks safety features like an anti-lock braking system or anti-theft device.
You can save money if you get car insurance quotes on the different cars you’re considering adding to your policy. You may find a later model car might cost you less to insure than an older model vehicle.
Additionally, older cars tend to have lower values, which means you don’t need to have comprehensive or collision insurance, which can provide significant cost savings.
RELATED: Types of Car Insurance Coverage Explained
#4: Bundle Multiple Insurance Policies
“Bundling,” which means having more than one type of policy with the same insurer, can also get you a discount on your car insurance rates. For example, most insurers give you discounts if you buy both your homeowners insurance and car insurance policies from them. Depending on the insurer, bundle discounts can be as high as 25%.
If your teenager is away at school and lives off campus, they can get a renters policy to bundle their car insurance if they aren’t on their parent’s policy.
In addition to saving you money, bundling your insurance can make your life easier. Getting one bill from the same insurance company every month can save you time paying your bills and make it simpler when you need to file a claim.
#5: Leverage Distant Student or Low-Mileage Savings
If your teen driver moves away from home to attend college (typically 100 miles or more) and leaves their car behind, they might be eligible for a discount. Some car insurers offer a “distant student” or “student-away” discount because your young driver will be spending much less time on the road, driving fewer miles, and is less likely to be involved in an accident.
If your insurer offers both the good student discount described above and the student away discount, it can add up to a nice savings every month. And keeping the mileage down on your car is also a saving for you.
#6: Save by Using Telematics
An increasing number of car insurance companies now offer “telematics” programs, which can save you money. Telematics programs sometimes use a small device kept in your vehicle that monitors your teen’s driving habits and will reward them for smooth acceleration and braking, as well as driving the speed limit. Many companies also use an app to track telematics, which is less invasive than a plug-in device.
For example, when participating in the SteadyDrive experience, the following are monitored through your smartphone: speed, acceleration, braking, cornering, and phone use while driving. You can track your progress and see your driving score in the SteadyDrive app. After about a month of driving as you ordinarily do, you’ll know if you’re eligible for a personalized discount from one of the company’s insurance carrier partners.
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#7: Shop Around with Different Insurance Providers
Shopping around and getting quotes from multiple insurance companies can save you a lot of money on your teen’s car insurance. There are a couple of ways to do this.
First, there are a number of reputable websites that will let you enter the information necessary for them to provide you with car insurance quotes from several different companies. You can get your quotes quickly online, and you don’t have to speak with an agent if you don’t want to. Some sites will even let you complete an application online.
Second, you can either contact several “captive agents” who work for one company and get a quote from each to compare, or you can work with an independent agent who can get you quotes from multiple carriers. Some people prefer to work with an agent who can answer their questions and be there for service if they need to file a claim.
RELATED: How & When To Switch Auto Insurance in 3 Steps
#8: Practice Good Driving Habits
Practicing good driving habits can earn your teen a discount through telematics, but it also will save them, and you, money by not being involved in an accident or getting speeding tickets and even qualify for a safe driver discount. While taking a defensive driving course is a great way to get a discount, you can instill good driving habits and model them for your teen when you drive, which can lead to lower rates for both of you.
Kids carefully watch how their parents drive, and they often drive the same way. When you drive, with or without them in the vehicle with you, observe the speed limit, use your turn signal, don’t run red lights, and come to a complete stop at stop signs. If you observe these practices, your teen driver is likelier to do the same.
Having a clean driving record without moving violations or accidents is a great way for your teen to get better car insurance rates. Conversely, if they get speeding tickets or are at fault in an accident, they may get a large enough rate increase that will be unaffordable and keep them from driving.
#9: Remain on a Parent’s Car Insurance Policy
If you get quotes for both having your teen get their own car insurance policy and adding them to your policy, you’ll probably find that it’s cheaper to add them to your policy instead of buying them their own coverage. This isn’t always the case, but it usually is. There are exceptions, such as if you have a recent DUI or multiple speeding tickets on your driving record.
#10: Use SteadyDrive to Save on Car Insurance for Young Drivers
SteadyDrive is an excellent tool for drivers 18 and older to save money on premiums. It’s a phone app that tracks their driving habits to help them earn discounts from leading insurers after just a few weeks of exhibiting good driving behavior.
SteadyDrive collects and grades your driving by measuring things like acceleration, braking, phone use, and speed. Positive results may help keep rates down, but it also encourages teens to practice safer driving habits.
There is no cost to use SteadyDrive; it’s free and easy to use. If your teen is a good driver, it can save you hundreds of dollars per year, and it takes less than a minute to sign up.
Also, SteadyDrive test drives do not negatively affect insurance rates if your driving score is not optimal.
RELATED: How SteadyDrive Can Save You Money
Frequently Asked Questions on Teen Car Insurance
These are some of the questions we’re most often asked about teen car insurance.
Do I have to add my teenage driver to my car insurance policy?
Not necessarily, depending on your insurer and the state you reside in. Most insurers will require any licensed household member to be listed on your policy. If your teenager has their license, they will need to be listed on the policy. But if they’re not driving, some states will allow you to exclude them from coverage.
How much is car insurance for teens?
The cost of teen car insurance depends primarily on whether they purchase a separate policy or are added to their parent’s car insurance. For example, according to Bankrate, the average premium for an 18-year-old driver with their own policy (without discounts) is $5,320 per year for full coverage.
But adding an 18-year-old driver to their parent’s policy is $3,352 per year (with good student and driver’s training discounts), a savings of almost $2,000 annually. For comparison, a 40-year-old driver, on average, pays just $1,771 a year for car insurance.
When do car insurance rates start to drop for teens?
Car insurance rates for teens can start to drop anywhere between 19 and 21 years of age, depending upon the insurance company and the teen’s driving record. Car insurance rates don’t automatically begin to decline at age 25.
Insurance companies calculate rates individually for each driver, so, for example, a 21-year-old driver with a DUI will not see their rates drop as soon as someone the same age with a clean driving record.
Are there programs that will help me save money on car insurance?
Yes, there are programs that will help you save money on car insurance. One of these is SteadyDrive, which tracks your driving habits for just a couple of weeks and will then get you quotes from several different insurers, who may offer you discounts if your data shows you practice safe driving habits, like driving the speed limit and not accelerating quickly or braking suddenly.
Why is teen car insurance so expensive?
There’s a simple reason teen car insurance is more expensive than coverage for any other age group: teens are involved in the most accidents. Most new drivers exhibit several qualities that cause them to experience more crashes, such as speeding, being distracted while driving (texting, talking), and not wearing a seatbelt.
Parents can help keep teen car insurance rates down by encouraging them to review driver’s training materials, limiting their driving at night, and riding with them frequently during the first year.
Disclaimer:
SteadyDrive is not an insurer or an insurance agent or broker. SteadyDrive does not provide you with an insurance policy, so make sure that you have insurance coverage while you drive. Please contact your insurer or an insurance agent or broker (if applicable) directly regarding questions you may have pertaining to auto insurance coverage. For more details, see SteadyDrive’s Terms of Service.
Safe drivers can save hundreds per year on car insurance
