If you have a teen who drives, here are a few tips to help you land inexpensive car insurance. Car insurance is high enough for two people in the family – adding a teenager to the pool can send the premium through the roof.
It’s fortunately true that women get car insurance cheaper. It’s also true that young people are automatically charged more. But there are some discounts that you can take advantage of to bring costs down.
- Tip 1: Buy an insurance-affordable car: By this I mean that if you had a choice between a Honda Accord and a Mustang convertible, go for the Honda. It’s as a sweet ride as the convertible, but it will cost less, is safer and much cheaper to insure. Safety wins over sporty in this department.
- Tip 2: Stick to one car: If you have three cars in the household, decide which car the teenager has access to. Add his/her name only to that car.
- Tip 3: Understand what you are buying: If you bought a very cheap car, comprehensive coverage might be unnecessary. You need to have liability insurance for your automobile. But if you don’t care much about your own car, you can probably skip all the extra coverage.
- Tip 4: Consider the mileage: If your kid is only going to drive the car occasionally and you won’t be driving it much as well, ask for a discount for low mileage. Calculate the mileage as accurately as you can. After you have all the information, it is time to shop around.
- Tip 5: Shop around: This step is applicable to anyone looking for cheap car insurance. It is always good to shop around every six months to a year.
- Tip 6: Own policy or add-on: Ask for a quote with both these scenarios – adding junior to your account or getting his/her own insurance. Usually adding him/her to your insurance will be cheaper, but not always. If you had some problem with your credit score and/or you had auto accidents or tickets, it might be worthwhile to get a quote for his/her own policy.
- Tip 7: Consider a higher deductible: The higher the risk you assume, the lower the premium is going to be. I don’t know if this is worthwhile to do for a very new driver, but at least after the first year you can increase the deductible if you become more confident with your teen driver.
- Tip 8: Set up automatic payments: Automatic electronic payments sometimes knocks a few dollars off the premium. So does paying the full amount at once. If you have such opportunity, take and make your kid pay you monthly.
- Tip 9: Help start credit history: If you are confident your child will be responsible, it might be helpful for his future to add him as an authorized user (some cards are good for this as they actually ask for the SSN of the other users, not just the name). A good credit score and history would help him get a good rate when he is on his own. Not just for insurance, but for a lot of other things as well.
- Tip 10 : Consider the discounts: Students get some pretty sweet discounts, don’t forget to ask the insurance agent about all the discounts your kid might be eligible for:
- Good student – If she/he maintains a 3.0 GPA, she/he might qualify for a good student discount.
- Good driver – A common misconception is the rates will magically go down when he is 25. That is not true actually. The rates will gradually go down from 18-25 as long as he doesn’t get into an accident or rack up tickets. So before you give those keys please make sure he is well trained. His training will also get him insurance discounts.
- Resident student – Will she/he be studying out of town and visiting only during weekends or in summer? Then she/he might qualify for a resident student discount. This is a little gem insurance companies never tell you about.
- Defensive driver – Did Junior go above and beyond the usual driving school and take defensive driving or any smart ride courses? That would get a sweet discount.
- Safety features in the car – After all the research you did to find the safest best car for your teen, make sure to mention all the safety features the car has (ABS, air bags, car alarm, etc.).
Have you shopped for car insurance for teens? What tips do you have for us?
101 Centavos says
We have a 15-year who is talking more and more about that magic milestone. It looks like we’ll be passing down one of our vehicles, probably the Mrs’s car. Nice article.
Neal Frankle says
I have always recycled our cars to the kids. My goal was to have one car – our 1994 Camry service all the kids. But my wife decided last year (rightly so) it was time to upgrade. Anyway, my youngest is still only 12 so it would have been a stretch. I believe it could have been possible!
I’m about to take the plunge myself, as I have a teen who will be getting his license this summer. *Sigh* After a bit of shopping around, it turns out it will indeed be cheaper to add him to my account. I already have a multi-product discount going for me, and adding my child, though painful, is offset a little by the multi-product deal. Thanks for the tips-I will be checking out the good grades discount!
Neal Frankle says
Having gone thru this twice already….I feel your pain. But…this might not be a bad time to consider suggesting to your teenager to help out with the insurance by getting a part-time job. This depends on his/her schedule of course but it might be a great opportunity …..and a way to ease the financial burden for you!
Neal Frankle says
You are welcome Ben!
Thanks so much for sharing these great tips!