Getting your first car is a momentous milestone in any teen’s life…but it’s unfortunately accompanied by some pretty bleak financial realities. Insuring a teenage driver can be very expensive. And now that most states require car insurance to drive, it’s unavoidable.
This is for good reason, too. Teen drivers are the most dangerous cohort of drivers on the road. Naviety, hormonal imbalances, and two tons of steel rarely go well together. In 2013 alone, just under a million teenage drivers were in police-reported car accidents. From those accidents, there were 373,645 injuries and just under 3,000 deaths.
So it’s easy to see why insurance companies are hesitant to cover a teenager’s mistakes.
But don’t fret! There are still some effective ways to get cheap car insurance for young drivers, and we’ll show you how.
1. Take Driver’s Ed
If you’re a teenager, an insurance company needs extra proof that you’re a safe, reliable driver. To do this, you should take a Driver’s Education course, even if your state’s DMV doesn’t require it.
Most of the time, car insurance agencies will you give a good discount on your coverage. And what’s a few hours a week for hundreds of dollars in savings?
2. Stay in School
Insurance companies don’t just want to see that you’re an educated driver, they want to see that you’re an educated person. By staying in school and getting high marks, you’re more likely to get cheaper car insurance coverage.
It’s unclear what the rationale is behind this. But it’s safe to say that insurance companies assume that kids with good grades are more responsible, and more stay home studying more often. This means they’re less prone to drinking and driving home from parties or going out for late-night joyrides. It is unclear if any of this is actually scientifically accurate, however.
But at the end of the day, if you want to save more money, you’re going to have to boost your GPA.
3. A Family That Stays Together, Saves Together
If you’re the parent of a teen and you’re looking to buy your teen separate policy for their auto insurance, think again.
It’s generally much better to lump your teen’s policy with your current plan, as insurance companies tend to give you “multiple-vehicle” discounts for keeping your business in the family.
Besides, if your teen were to get a completely separate insurance policy, you’d have to cosign their policy anyway, so why not get the discount where you can?
4. Buy Old, Drive Old
This is true for any age bracket, but it’s especially true for teens. Insurance companies to favor older, more reliable cars when giving out cheap coverage. The Dodge GT Viper is the most expensive car to insure, so look for, well…the opposite of that when picking a car.
Cars like old Honda Civics and Toyota Camrys are usually very easy to get cheap coverage for. They don’t lend themselves to joy rides or high-speeds very easily, so the Geico lizard smiles upon them favorably.
And once you’ve got your Ol’ Reliable, make sure you drive it like a geezer, too. Insurance companies also lower your premiums if you have a long record of safe driving.
5. Alternatively, Go Green
If you don’t want a to whip an old jalopy around town, your other alternative is to go green if you’ve got the cash to spare.
Insurance companies will give you discounts if you drive fuel-efficient or electric vehicles. This is partly because these cars also don’t go very fast. Try getting to 100 MPH in a Prius, it’s pretty tough.
But at least with these cars, you’ll have the benefits of modern luxuries like dashboard GPS, satellite radio, and auxiliary inputs that you wouldn’t find in a ’99 Honda Civic.
6. Raise the Roof (and Your Deductible)
If your absolute end goal when with your insurance is to pay as little per month as possible, you can always voluntarily raise your deductible to lower your monthly payments.
Of course, by doing this, you’re either betting that you or your teen won’t get into an accident, or you have the savings to cover the deductible should something bad happen.
If you want to take advantage of this tactic, you may want to wait until 6 months after your teen first gets her car. Crash statistics have shown that the risk of crashing for teens is highest in the first six months and then falls sharply after that.
7. Play Musical Chairs in the Driver’s Seat
When you add a teen to your family car insurance policy, they’ll be listed as the primary or secondary driver on one of the vehicles you own. If you, your significant other, and your teenager all have separate cars, you want to make sure that your teen is listed as the primary driver on the cheapest car in your garage.
This can bring the price down on your insurance costs drastically. If you only two cars – you and your spouse’s -, then your teen will be listed as a secondary driver on both of the cars, which will still be cheaper than listing them as the primary driver.
8. Beware of Scammers
If you’ve found a great deal for car insurance online that seems too good to be true, it probably is. There is a bevy of fraudsters on the Internet that look to swindle naive teens out of their hard-earned cash.
Stick to insurers you know, just to be safe.
9. Go Long-Distance
If you’re going away to college and leaving your car at your parents’ house, insurance companies often give you a discount while you’re away. Just talk to your agent and let them know.
If you’re going to be returning home for winter and summer breaks, this is a better option than just canceling your policy altogether.
10. Let Big Brother Track Your Driving Habits
Lastly, insurers will give you a big discount on insurance if you let them track your driving. Using “telematics,” or technology that connects to the steering column of your car, insurance companies can track how fast you go, how quickly you brake, and what times of the day you’re driving.
By using systems like OnStar, or Progressive Auto’s Snapshot, you can get big savings on your auto insurance.
Now That You Know How to Get Cheap Car Insurance for Young Drivers…
You may want to check out the rest of the financial advice our site has on offer. Getting cheap car insurance for young drivers is just the tip of the iceberg of financial frugality.
If you’re looking to build credit and spend responsibly, you might even want to check out our insights on student credit cards.