The day has finally come. your teenager is getting his driver’s license. it’s a major milestone that will affect the family in many ways, some great and some not so great. Like when you add your teen driver to your car insurance plan and the monthly premium automatically goes up.
While your rates are guaranteed to increase (teenagers are considered high-risk drivers), that increase doesn’t have to break the bank. Here are 10 ways to get a car insurance discount when you add a teen driver to your policy.
10 ways to get car insurance discounts as a teenager
1. enroll your teen in driver’s education
A teen driver education course is designed to teach children safe driving habits. Even if your state does not require drivers to obtain a license, it is highly beneficial for novice drivers in terms of reducing the risk of being involved in an accident. And for that reason, insurance companies often give you a discount on insurance rates if your teen has completed a course. additional driver safety classes may also apply.
2. sharing the rewards of a good report card
driver education is not the only education that matters. If your teen is at least a “B” student, you can often get car insurance discounts. students who do well in school are usually good students who will easily learn traffic rules and follow them. You can encourage your teen to get a B average by sharing the savings. they will need extra money for gas money!
3. get a better rate with multi-vehicle family plans
Will your teen have their own car? If so, you may be wondering if you should purchase a separate policy. in most cases, the answer is no. many of the factors that allow you to get better rates on your insurance (think: being married or having a good credit score) don’t apply to your teen. Also, if your teen purchased her own insurance, you would still have to co-sign, since in most states it is not legal for minors to enter into such contracts.
But here’s the good part: If you’re adding a new car to your policy, you’ll likely be eligible for multi-vehicle discounts.
4. buy used vehicles with high safety ratings
Older, simpler cars with high safety ratings give you better insurance rates. why? Older cars are cheaper to repair if you’re in a collision, and the safety features of course lower the chance your teen will have an accident and/or be seriously injured.
If you plan to buy your teen a vehicle of their own, talk to an insurance agent before you start shopping for a car. they can tell you which models will be the cheapest to insure. You can also check out this handy calculator from insure.com to get a better understanding of insurance premiums by car make and model.
Note: While older cars are often less expensive to repair, some insurance companies offer discounts on newer cars. just one more reason why it’s a good idea to talk to your agent about the savings available to you.
5. compare auto insurance from 3 providers
While you’re shopping for cars, you may also want to consider purchasing insurance. Even if you like your insurance company, getting a better rate could make all the difference. nerdwallet has compiled a comprehensive list of discounts offered by major insurers for teen drivers, so you can compare your options.
The general rule of thumb is to compare plans and rates from at least three providers. But remember, it’s usually more cost-effective to bundle policies. If you’re not currently paying for all of your insurance needs with one company, you might consider making the switch to consolidate and save!
6. compare primary and secondary conductor costs
once you add a teen to your policy, they will be assigned as the primary or secondary driver of the vehicles they own. Let’s say you have three people in your family who can drive: you, your spouse, and your teen. all three must be included in your policy. In this scenario, if you have three or more cars, an insurance agent will automatically assign your teen as the primary driver of a vehicle.
To save money, ask your agent if you can make your teen the primary driver of the least expensive car to insure. if you only have two cars, the agency will consider your teen a secondary driver of one or both cars, which is usually cheaper than having another primary driver on your policy.
note: you cannot be the primary driver of two cars unless you have more cars than people.
7. enforce the importance of a clean driving record
good drivers are rewarded by insurance companies. That means if your teen starts driving as soon as it’s legal and keeps a clean record, you could see those rates drop steadily for years to come.
That’s why it’s critical for your teen to do things like take driving lessons, get a learner’s permit, and practice for hours with you or an instructor. the more knowledge and skills they have, the better drivers they will be!
8. enroll your family in a defensive driving course
Your teen isn’t the only family member who can get driver’s education. You may be eligible for discounted car insurance rates if you take a driver training course, such as defensive driving. for $40 or less you can brush up on her skills, learn some important defensive driving maneuvers that could prevent an accident, and save money on monthly premiums.
9. green means go
If you’re looking for a new car, you can cut down on insurance costs (not to mention gas) by going green. Some insurance companies offer discounts for those who own fuel-efficient cars. While you’re saving the environment, you’re also saving money.
Also, you can get low mileage discounts if you drive less than a certain number of miles per year. Check out this awesome chart to see how much you can save on car insurance by driving less in every state.
Do you want to go one step further? talk to your insurance company about a usage-based program. With a pay-per-use model, users must install a tracking device in their car. the device monitors mileage, braking habits, and speeding trends. This same technology is used by many parents to track their teen’s driving and help them practice better driving behavior. Research shows that usage-based insurance can save customers up to 10% just for installing the device and up to 50% while using it.
10. think carefully about raising your deductible
Do you have money saved for an emergency? If so, you may want to consider raising your deductible (the money you have to pay in the event of an accident before the insurance kicks in). doing so would lower your monthly bills, but is not recommended unless you have an emergency fund set up. If you can afford to cover your teen in the event of an accident, then raise the bar.
Car insurance doesn’t have to be expensive with a teenager behind the wheel. There could be many more discounts available to you and your family when it comes to auto insurance. each insurer has different policies and prices, and state laws may affect them as well, so be sure to discuss the options with your agent.
*this article was updated on 09/15/2020