Teen Guide To Car Insurance

Car Insurance Tips for Teens

To help your parents save money on car insurance, you can:

• Get good grades. Many auto insurance companies offer good student discounts, which are discounts for teen drivers who make a certain grade point average (usually somewhere in the B-average range).

• Enroll in drivers education. Your state may or may not require drivers ed; to date, it’s about 50/50. However, many providers offer discounts for successfully completing a drivers education course, so seriously consider it even if it’s not a state requirement.

• Take an additional driver training course. So what if you’ve already taken drivers ed? Depending on your insurance company, an additional driver training course could knock even more dollars off your premium. Plus, the extra training brings instant and future benefits as far as safe driving is concerned.

• Avoid pushing for a fancy ride. Newer model, flashy cars are more expensive to insure than older model, practical rides. Whether you, your parents, or all of you are going in on this vehicle, opt for something sensible now. You can always upgrade when you’re older.

• Pay a higher deductible. If your parents agree to increase their deductible, it will help lower insurance rates overall. If you agree to set aside the amount of money necessary to pay that deductible―should the need arise―your parents will see you as uber responsible and they’ll save some money on their premiums.

NOTE: Lots of companies offer good driver discounts. Because you’re young and just starting out, you haven’t had much time to prove yourself a good driver (most companies require anywhere from three to five years of accident-free driving before a driver can qualify for this discount). Yet, that doesn’t mean you shouldn’t be aware of it. Spending the first several behind-the-wheel years driving safely will bring you money saving benefits in the future.

Money Saving Tips for Parents

First and foremost: Don’t assume you’ll save money on your own car insurance by having your teen driver purchase a separate policy. Your teen will just end up paying more than either of you would if you added him to your policy and, frankly, your good standing with your current insurance company is what’s going to play a big role in getting a good rate for your teen.

Additional money saving tips include:

• Ask about multiple vehicle auto insurance discounts. Adding another vehicle to a policy that already has at least one vehicle could earn you a discount.

• Buy (or encourage your teen to purchase) a sensible vehicle. And by “sensible” we mean a used vehicle with a high safety rating (bonus points for added safety features) and void of words like Audi, BMW, and Mercedes. They’re great cars, but they’re much more expensive to insure.

• Increase your deductible. Doubling your deductible (say, going from $250 to $500 or $500 to $1,000) usually automatically lowers your rates.

• Think twice about collision and comprehensive coverage. Yes, teens are more prone to accidents; however, if your teen drives an older model car that isn’t financed, it might make more financial sense to skip these optional coverage types.

• Find out if you can include your teen driver on your policy as an “occasional” or “pleasure-use only” driver. Listing him as a primary driver will cost more.

NOTE: Don’t forget to ask about other discounts unrelated to your teen driver. You might be eligible for certain car insurance discounts that have nothing to do with your teen and not even know it.

For example, do you purchase both home and car insurance from the same company? Have you been a loyal customer who’s renewed his policy on time for many years? Have you been accident-free for a significant amount of time, enrolled in a driver safety course, or opted to pay your annual premiums in full? Any of these factors can get you a discount.

And if they don’t, it might be time to shop around and compare rates from other companies.