If you have a teen or first-time driver on your insurance policy, chances are your wallet is feeling it. Luckily, there are many ways to get discounts on your teen driver’s car insurance that can put some of that money back in your pocket. This article will uncover how to find and apply those discounts to your auto insurance policy.
Why is Teen Driver’s Insurance so Expensive?
Before diving into the ways to find discounts for teen drivers’ insurance, it is important to understand why younger drivers’ insurance is so expensive in the first place. Insurance companies take several factors into account when working with a young motorist.
Less Experience
Young drivers are far less experienced behind the wheel than the average adult is, therefore putting them at a higher risk of getting into an accident. They simply haven’t had enough time behind the wheel and may not respond appropriately in the event of a wreck.
More Likely to Engage in Distracted Driving Behaviors
When it comes to distracted driving, teens are more likely to pay attention to other things besides the road in front of them. Using their cell phone, talking to friends, and loud music all make focusing on safe driving significantly harder.
Young Drivers are More Likely to Be Reckless
There have been many studies done that show that teens are more likely to engage in risky behaviors. According to the CDC, teen drivers tend to be more reckless behind the wheel, which can cause them to be in more accidents and file more insurance claims.
Ways to Get a Teen Insurance Discount
1. Sign Your Teen Up for an Online Driver’s Ed Course
While driver’s education courses aren’t required in every state, signing your teenager up for a class is well-advised (and mandatory in California). Not only will they get additional skills, knowledge, and experience to improve their driving, but many insurance companies also offer a discount for teens that have taken an online driver’s ed course. Websites like ours offer a DMV-approved course for drivers in California. A little extra knowledge and experience can go a long way for both you and your young driver.
2. Get a Better Rate with a Multi-Vehicle Family Plan
You can save some money when you have a multi-vehicle family plan with your insurance company. If your teen driver has (or will have) their own car to drive, it’s often better cost-wise to add them to your current policy and bundle the vehicles together, rather than getting them a separate policy. Most insurance companies will automatically apply the savings for having a multi-vehicle policy as you add them. This is a great way to earn savings with minimal effort on yours or your teen’s part.
3. Opt for Purchasing a Used Vehicle with Great Safety Ratings
Aside from losing value the moment you drive a new car off the lot, the insurance rates are also higher for a brand new vehicle. Newer cars are more expensive to insure because the parts and technologies are more expensive to replace if your teen is ever in an accident. According to The Zebra, by purchasing a vehicle that’s at least five years old, you can save 18% on your car insurance. Those are savings that can really add up over time.
4. Reap the Benefits of Good Grades
Having a star student not only helps with their odds of getting into their dream college but also with their car insurance rates. It is very common for car insurance companies to offer discounts when teens are in high school or college and making good grades. For example, StateFarm* will offer up to 25% savings for students with good grades. Allstate* also offers a good student discount to young drivers who are unmarried, under the age of 25, and are keeping at least a B-average in school. It pays to keep your grades up.
5. Track Your Driving Habits
If your teen has good driving habits, why not make sure your insurance company knows that? Many companies are now coming out with features for additional discounts where they rate drivers based on their tendencies behind the wheel. All you have to do is plug a device into the vehicle and leave it in the car for 30-90 days. It will collect information about your teen’s driving habits and report back to the insurer. Insurance companies will look at details such as hard brakes, rapid accelerations, daily mileage, speed, and the time of day they are driving. After the testing period is over, insurers will often offer a discount for safe drivers.
6. Shop Around for the Best Teen Driver’s Insurance Rates
Just like shopping for a car, you will also want to shop around for the best insurance rates for your teen driver. Even if you like your current insurer, you may be able to find a better rate with another company. Generally speaking, you will want to compare the rates of at least three different insurance providers to make sure you are getting the most for your money. It’s also cost-effective to bundle your car and home insurance as well. Many insurance companies offer discounts for having all of your insurance coverage needs met by one carrier.
7. Ask for a Low-Mileage Discount
If your teen driver doesn’t put a lot of miles on their car each month, ask your insurer about a low-mileage discount. Nationwide* offers a pay-per-mile option through its SmartMiles program. This program provides coverage with a premium that changes each month, based on the number of miles driven. If your teenager lives close to school and work, this could be a great option to lower their insurance rate.
Teen Driver’s Insurance: Closing Thoughts
Your teenager reaching the age to drive independently is such an exciting time. And while having a teen driver can sometimes prove to be expensive, looking for and applying these discounts to your auto insurance will hopefully cut back on some expenses that come with this new season.
*Your Drivers Ed Online does not endorse nor recommend any particular insurance company. These examples are provided for informational and educational purposes only.