Auto insurance is an expensive part of owning a car. Throw in a teen driver on a family plan, and your rates could skyrocket. But despite this, it is possible to keep your cool when shopping for insurance for your teen. Below, find out what discounts are available, which car to buy to guarantee the best rates, and which coverage to choose to keep your rates as low as possible.
Good student discount for teenage drivers
Let’s start with the discount created explicitly for teenagers. Insurance companies have determined that good students are, on average, better drivers. Most insurance companies offer a good student discount that can increase your savings, which generally applies to students with at least a B average (3.0 on a 4.0 scale). Have your teen’s most recent report card ready when you buy car insurance. If a 3.0 is not possible by the time you add your teen driver, the discount can always be added at a later date if the GPA improves. If you need an extra incentive to get your teen to pull themselves together, have them pay the difference in premium costs up.
Is your teenager an occasional operator?
Sharing a car with your teen (or noting that they’re at school in another state) is a great way to save money. Most carriers can then register your teenage driver as a secondary or occasional driver. Be sure to mention this to your agent as this discount may go unnoticed.
Choosing the Right Vehicle for a Teen Driver
If car-sharing is still not part of your teen’s vocabulary or busy schedule, don’t allow car sharing, consider choosing a vehicle for your teen. Look for something reliable yet affordable. You don’t want your teenager getting stuck on the side of the road in a beat-up old truck, but at the same time, you also don’t want to take out a loan for their luxury sports vehicle. Depending on your price range, look for a car that is between 6 and 10 years old and still in excellent condition. Check airbags and other safety devices and consider a safety inspection. I’ Liability insurance on a car with airbags is cheaper than on a vehicle without because airbags reduce the risk of serious injury. Whatever you do, don’t do it get a sports car for your teenager – it will skyrocket your rates.
Choosing the right coverage for your teen driver could save you hundreds of dollars. If you have followed the above rules regarding choosing the right vehicle, you are in a great position to secure the car with personal liability and property damage, PLPD, only. To get PLPD only, you can’t have a loan on the vehicle, and you’ll want to be able to replace the car yourself if anything were to happen to it. PLPD is the least insurance you can buy, making it the cheapest. Physical damage is the most expensive coverage for a teen driver. Avoiding physical damage coverage such as comprehensive and collision damage waivers can save you a lot of premiums.
Resident student discount
A teenager allowed in school must still be insured. Even when your teen doesn’t have access to a vehicle, insurance is usually required because they’ll be coming home from time to time. An even greater discount is available from most insurance companies for students absent from school. If your teen is in school, make sure your insurance company knows about it.
Ensure parent policy or a separate policy
Which is cheaper adding a teenager to their parent’s policy or on a separate plan? This is a tricky question to answer. Insurance company rules and prices vary. It’s impossible to say which is the best route to take without doing your homework. Theoretically, adding a young driver to their parent’s policy would be the cheapest way to go. The teen driver would benefit from all major parent discounts, such as multiple cars and multiple policies.
Some insurance companies must assess a teenager on all police vehicles, not just the one driven by the teenager. This is the main reason why it can be cheaper to put a teenager on a separate car insurance policy. If a teen is automatically rated on all vehicles and a few cars have full coverage, you will pay a higher rate. Having a teenager on a separate policy ensures that the insurance company only charges for the use of one vehicle. Significant discounts can sometimes extend to a teenager on their policy if they live in the same household as another policyholder with the same carrier.
Teenage drivers can be expensive to insure. Think ahead when it comes to protecting your teen. Start working harder on good grades, looking for the best vehicle, and reducing your coverage. Ask your insurance agents for a school discount and have your teen take out a separate policy to reduce premiums. A driver’s license is a rite of passage for most teenagers. Don’t let the high cost of insurance get in the way of your teen’s newfound freedom.