In about a month, our oldest child will turn 15. In our state, that means you can apply for a learner’s permit to drive. She hasn’t expressed a big desire to do this yet but I know it’s coming. So naturally I’ve started looking into car insurance for teens to see how much another driver in the household is going to cost me.
What I’ve found is there are many ways to save money on car insurance for teens. There are reasons why your car insurance rates will go up, chiefly because you have an inexperienced driver behind the wheel. Insurance companies are taking on a higher risk of having a payout. Your teens’ enthusiasm for being able to drive coupled with their lack of skill makes accidents more likely.
Short of holding onto the keys yourself, there is no way around paying more on your car insurance with a teen in the house. But you can take steps to lessen the amount of increase. The good news is most of these steps will require the help of your teen. Getting them engaged in the process will go along way in teaching them responsibility. They also might learn some cool financial lessons along the way.
11 Ways to Save on Car Insurance for Teens
Consider these action steps as you look at how to save money on car insurance for teens who want to drive. I’ve divided them up into action steps for teens and for parents.
Teen Action Steps
1. Study hard and get good grades in school. Many insurance companies provide discounts for students who get good grades in school. Teens may not like to study but that hard work can literally pay off. Maintaining an A or B average most likely will qualify a family for discounts.
2. Take a driver’s education or defensive driving course. Teens may feel they are ready to drive but they are still inexperienced when it comes to handling on-road situations. A driver’s ed course or a defensive driving course can help prepare them for situations they might face. Plus, the knowledge gained will help them get mentally ready to sit behind the wheel.
3. Drive safely and stay accident free. Not all accidents can be avoided. Some will not be your teens fault. But if your teen practices safe driving and remains accident free during the insurance term, that can help lower your rates.
Parent Action Steps
4. Always shop around. Don’t assume your current company has the best car insurance for teens around. Get quotes from other companies and don’t be afraid to switch.
5. Help your teen get the right car. Your teen may want a flashy sports car. Guess what? Those are going to be more expensive when it comes to insurance. If you are going to let your teen get their own car step in and help them find something conservative. Find something safer with good maneuverability and quality crash test ratings. Insurance companies take these things into consideration when they are drawing up your premium. The Insurance Institute for Highway Safety is a good place to start your research.
6. Keep your teen on your own policy. It will probably be less expensive to add your teen to your own policy than have them purchase one on their own.
Some insurance carriers will let you assign your teen to a particular car in your family. If one of your cars in insured at a cheaper rate than the other, make sure your teen drives that car.
7. Consider raising your deductible. Raising the deductible on your car insurance is a good way to save money on your monthly premiums. If you can afford the out of pocket expense to fix a damaged car consider this step.
8. Use modern technology. Some automakers are developing built-in features to help parents monitor their teens driving habits. But with the advances in modern technology, parents now have an arsenal of tools at their disposal.
There is drive cam technology that can be installed in the vehicle. There are also systems that provide seat belt alerts and give feedback on how your teen is driving. Plus apps have also been developed that prevent your teen from texting or using their cell phone while driving. Insurance companies are also developing their own apps to help with driver safety and monitoring.
9. Be a positive role model. Ever heard the phrase, “More is caught than taught?” What you do behind the wheel your teen will mimic. Set the tone for safe driving by being a safe driver yourself.
Parent and Teen Together Action Steps
10. Practice together. I remember going out with my dad over and over again practicing starting and stopping with my first car – a stick shift, Chevy Beretta. When a parent gets involved it adds a sense of seriousness to what driving a car means. I learned it was a huge responsibility to drive because my dad stressed it over and over again.
Sitting in the passenger seat as your child practices driving will do several things:
- You’ll provide comfort. Many teens are nervous when they first start to drive and a parent’s presence will be a calming influence.
- You’ll provide experience. You’ll point out what they are doing right and what they are doing wrong. If they run across a situation where they don’t know what to do, you’ll be able to instruct them in real time.
- You’ll provide encouragement. Teens need to feel confident behind the wheel. That will go along way in helping them be a safe driver.
11. Sign a Safe Driving Commitment. As a final step you might want to sign a Parent-Teen Safe Driving Commitment that outlines your family’s rules of the road. This should outline your expectations about how your teen drives and what the consequences will be if they break those rules.
All these steps should be considered when looking at saving money on car insurance for teens. The great thing about following some of these steps is that saving money won’t be the only benefit. Your teen will become a better driver and you will have some peace of mind when they get behind the wheel.
And teens, your parents need some help with this. Do your part…be a responsible driver and help your parents save some money on their insurance. Maybe, just maybe, they’ll take some of that money they save and turn it around on some other fun things for you.
Questions: What other strategies have you heard on how to save money on car insurance for teens? Did you have a good or bad driving record as a teen? Why do you think teens are so aggressive behind the wheel? Would you allow your child to begin to drive at 15?