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By Thomas Muellner
Having a son or daughter get behind the wheel for the first time can be nerve-racking, to say the least. Between joyriding with friends, the temptation to text and drive and everyday distractions, there’s no shortage of potential dangers. But beyond having natural concerns about safety and responsibility on the road, as a parent, you may also feel a financial worry about the added cost of insuring a young driver.
Whether you absorb the cost directly or your child pays their own way, insurance for teen drivers can cost as much as $1,500 per year. That’s on top of the vehicle owner’s primary insurance. Yet the inflated cost is not without reason. Drivers age 16–19 are significantly more likely to be in an accident, compared to older drivers, and this represents a major risk for auto insurance providers.
However, by comparing all of your family’s auto insurance options and taking proactive steps towards promoting vehicle safety, you’ve got a good shot at saving money when it comes to teen auto insurance.
For drivers of all ages, genders and backgrounds, the vehicle being insured is still the single most important factor in the price of car insurance. Luxury vehicles and sports cars are more expensive to insure than minivans; new vehicles have higher insurance premiums than pre-owned rides, especially if you own the car outright. Because of this, if you’re purchasing a vehicle for family use or specifically for a newly-minted driver, it’s best to error on the side of practicality.
Moreover, be sure to opt for cost-saving safety features, such as anti-lock brakes, electronic stability control and side-curtain airbags if they’re available. Though rates and incentives tend to vary by state, select insurance providers offer serious discounts on vehicles that include these types of features. There’s potential to save anywhere from 5% to 15% on your monthly bill simply by improving vehicle safety.
Better still, you’ll rest easier knowing your child is protected to the fullest extent possible whenever he or she is on the road.
While it’s not uncommon for parents to use access to a vehicle as a reward for doing well in school or taking care of chores at home, many moms and dads fail to realize that success in the classroom translates directly to better auto insurance rates for young drivers.
Nearly all of the major insurance providers offer a discount to teen drivers who maintain a grade point average of “B” or better. This is typically a 3.0 on a 4.0 scale. With solid grades, families can expect to see a savings of about $150-$200 per driver each school year. In other words, it pays to get A’s (or B’s)!
So, if your child is on the cusp of making the honor roll, it may be worth an extra nudge to ensure he or she is making academics a top priority. The savings really add up when there are multiple teen drivers living under one roof.
It’s easy to think of “teen drivers” as high school students. After all, in most states, the high school years are when you take drivers’ education and get your first driver’s license. However, to insurance providers, college students who are 18 or 19 are also considered to be teen drivers.
But if your college-age driver attends school more than 100 miles away from home and doesn’t have a vehicle on campus, many auto insurers will offer your family a discount compared to the rate if your child takes a car to school. If your child is far from home and vehicle-less, the insurance company can assume they won’t be driving the family car regularly. There is a reduced risk that they will drive after drinking or participate in other dangerous activities common on college campuses.
Though not having a car may feel like a punishment to your child, it could potentially save you money in the long run.
As with other major purchases and expenses, there’s a chance your school, community group or employer offers a special discount when it comes to vehicle insurance. For example, members of Alliant can get low-cost TruStage auto insurance. If you’re a member of a local professional association or have served in the military, be sure to ask about rebates and incentives before making a final decision, as your benefits may transfer to your son or daughter.
At the end of the day, finding the best deal on teen auto insurance requires intentional planning and a bit of research. While you and your family may not qualify for all of the discounts available to young drivers, by pricing out and comparing insurance providers, you can be sure you land on a plan that meets your needs without giving your financial future a flat tire.