Insuring a young driver is an expensive proposition no matter how you go about it, because insurance companies know that drivers aged 15 to 19 are inexperienced and therefore three times more likely to be in accidents than older drivers. The average cost of insuring a young driver may run around $800 to $1200 a year, but can be much higher. However, there are some methods of controlling costs and getting the cheapest car insurance for young drivers.
For instance, the kind of car the teenager will drive will have a major impact on the premium. Naturally, he or she wants a brand new, high-powered sports car or SUV, but this is exactly the kind of car that will send your insurance rates through the roof. A new car is more expensive and therefore more costly to insure. High performance vehicles and SUVs are more likely to be involved in accidents, and insurance companies know this and charge accordingly for young drivers car insurance. An older, larger car will be cheaper to insure. Larger cars are more difficult to drive recklessly and the car itself is worth less, so that an accident causes less monetary damage. However, some safety features like anti-lock brakes or automatic seat belts may reduce your rates and these features may not be available on older cars.
Be aware that highly popular models of car are also frequently stolen. The thieves strip the cars for parts and respond to the high demand for the parts of popular models by stealing these cars more frequently. These models are more costly to insure because of the theft rate. Your insurance agent can give you a list of cars that are less frequently stolen and cheaper to insure.
Another consideration is whether to put your teenager on your insurance policy, or get the teenager his own policy. Usually, putting the child on the parents’ policy is best and cheapest, but there may be exceptions. Putting a teenager on a policy with multiple vehicles may cause an increase in premium for all vehicles on the policy. If the young driver will have his own older, less valuable automobile, instead of driving the family’s new luxury car, a separate policy might be cheaper. Also, some insurance companies will offer special, lower cost policies for teenagers, with added requirements such as no night driving and drivers’ education. Compare quotes from a number of companies to see which offers the lowest cost car insurance for teens.
If you do decide to put the young driver on your policy, be sure to get the teenager listed as an “occasional” or “additional” driver, so that all of the discounts you receive are passed on to the teenager. Remember that if your child attends college more than 100 miles from your home, your insurance carrier may give you a lower rate. You also need to inform the insurance company when the teen begins to drive, but most companies will not charge an additional premium until the teen is a licensed driver. Billing fees can be avoided by paying the premium up front, or by having it automatically withdrawn from your checking account.
You will also want to check into raising the deductible amount on the car the young driver will use. Rates are much cheaper with higher deductible amounts, and in a few years you will save more on the annual premium than the amount of the deductible. If your teen is driving an older car that is paid for, try dropping the collision and comprehensive coverage. They are not required by law and dropping them can lower your rates significantly. This will probably mean that you pay for a few fender benders out-of-pocket, without telling the insurance company. Paying is still cheaper than seeing your insurance premiums head for the ceiling.
Your young driver may also be eligible for several discounts on his or her own. Most insurance companies offer a good student discount for students who maintain at least a B average and are enrolled full-time in high school or college. Companies view good students as more responsible and want to have them as long-term customers. Discounts from regular rates can be 10% or sometimes more.
Many companies also offer discounts to young drivers who take drivers’ education courses. Make sure the course is accredited and check with the insurance company ahead of time. The discount can be up to 25%. Often, these courses can also be used to remove points from a license if your teenager has already had some problems.
Another surprise is that some companies offer discounts to young drivers who participate in community organizations. Did your child volunteer at a local hospital? Is he an Eagle Scout? Check with the insurance company to see if a discount applies.
By far the largest discounts offered by insurance companies, however, are for accident-free driving. Cheap insurance for young drivers rates are earned with years of safe driving. Everyone begins driving with a clean slate. If your teenager maintains a safe driving record and avoids collecting traffic tickets, you and he will pay lower premiums in the future. The converse is also true. If your young driver is involved in accidents and is at fault, or receives moving violations, his insurance rates will skyrocket. Make sure your young driver is aware that the consequences of poor driving will have a financial impact on you and on him for years to come.
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