How to Cut Insurance Costs for Teen Drivers
Getting that learner’s permit fills a 16-year-old with joy, and you with fear. New teen drivers cost their families an extra $2,276 to insure from ages 16 to 19. Ouch.
The Insurance Institute for Highway Safety reports teen drivers are three times as likely to get into a fatal crash as people 20 or older. Fair or not, auto insurance costs also vary by gender. Expect your bill to go up an average of 92 percent for a 16-year-old boy and about 67 percent for a girl.
With that bad news out of the way, here are five ways to keep your car insurance from getting dented too badly.
Preparing Teen Drivers for the Road
The more time behind the wheel with a restricted license, the better for your insurance costs. Every state has a graduated driver’s license program that requires as many as 50 hours of road time in order to issue a restricted license. You can possibly save 10 percent on insurance if you enroll your teens in a good driver’s education program through school, privately, or online through DriversEd.com.
Should Your Child have Her Own Car?
It makes sense financially for your teen to share a car with other family members. It’s also a safer bet. In most cases it limits your teen’s road time – a good way to ease her into driving. It also avoids the gas and maintenance costs that come with a second automobile. Most important, it means you won’t have to buy a separate insurance policy.
Should You Keep Your Teen Driver on Your Policy?
Experts say absolutely. If you are a good driver, your low rates will offset the cost of a newbie secondary driver. You might also be eligible for a multi-driver discount. Also explore ways to lower your deductible. For example, you could weigh the cost of dropping comprehensive or collision coverage. Just be sure you have enough cash reserves on hand to cover repairs or a new vehicle if yours gets totaled.
What If Your Teen Needs a Car?
If it’s more practical for your teen driver to have his own car, choose a vehicle that is safer and cheaper to insure. Click here to see the IIHS list, then check Autotrader listings for a good deal on a quality used car. Encourage him to keep his grades up; some insurers will lower rates for students with high GPAs. And don’t be afraid to shop around: discounts for teenage drivers vary widely among carriers.
Consider Usage-based Insurance
This is one time Big Brother is really your friend. Usage-based devices determine premiums based on driving skills. UBIs use self-installed devices that track the number of miles driven, the time of day, and behaviors like acceleration and braking habits, hard cornering and speed. These programs might be a good deterrent to risky behavior. Nationwide, Progressive and GEICO are three companies that offer this technology.
Your new teen driver will certainly give you some white-knuckle moments, and you can’t prevent all mishaps; but you can do your best to protect them and your insurance costs by preparing your young driver, choosing a safe car, and keeping them on your policy if possible.