As a parent, it’s bittersweet to watch your child take on life’s first big moments. Between witnessing your son or daughter’s first word, first step, and first bike ride, it’s natural to celebrate these moments with a mix of joy and sadness as your baby slowly grows up before your eyes.
When it comes to driving, seeing your child sit behind the wheel of a vehicle for the first time can lead to a particularly strong collection of mixed emotions. On one hand, you’re extremely proud and excited for your teenager to experience such a life-changing milestone, but on the other, you probably feel a bit concerned about him/her staying safe on the road.
These feelings are completely normal, and the apprehension will gradually fade as you see your son or daughter develop into a skilled, confident driver. However, when your teen gets closer to getting his/her license, another concern will likely be at the forefront of your mind: the painfully high cost of teen car insurance.
How Much Does Teen Car Insurance Cost?
When determining the cost of your premium, insurance companies consider many factors to help predict the likelihood that you will cost them money by filing a claim. The higher your risk of filing a claim, the more your insurance premium will cost.
Your driving record, vehicle type, gender, and possibly even your credit may all be considered when an insurance company prices your premium, but there’s another factor that will matter greatly to insurance companies as well: your age.
Age is the most important factor insurance companies consider because it’s such a significant indicator of your risk as a driver. The CDC reports that teenagers between the ages of 15-19 accounted for 8.4% of the total costs of motor vehicle collisions in 2016. Altogether, that damage totaled up to $13.6 billion in motor vehicle injuries.
Because of the risk that young drivers pose to insurers, auto insurance premiums for adolescent drivers can be staggeringly high. While actual insurance rates will vary based on gender, driving record, and type of vehicle your son or daughter is driving (among other factors), the cost to insure a teen driver will almost certainly make you cringe.
Here’s a look at the numbers:
|$3,336||The average yearly cost of adding a 16-year old to a parent’s auto insurance policy.|
|$444||The average extra yearly cost teenage boys pay (vs. teen girls) for car insurance.|
|$5,472||The average yearly cost for a teenage boy to buy an individual car insurance policy.|
5 Ways to Save Money on Teen Car Insurance
No matter how you slice it, adding an adolescent to your car insurance policy is going to be pricey. The good news is that there are a few ways to make doing so a little less painful.
When it’s finally time to add your teenager to the family auto insurance policy, keep these money-saving strategies in mind:
- Sign your son or daughter up for a drivers ed course. You could qualify for auto insurance discounts if your teen completes certain driving courses. For example, defensive driving courses could save you up to 10% on the insurance premium.
- Brag about your teenager’s good grades. You might already proudly tell grandparents, friends, and colleagues when your child brings home A’s and B’s on a report card. What you may not realize is that you should probably tell your car insurance company, too.Most insurance companies are willing to extend discounts if your student driver pulls in good grades at school. Ask your insurance provider about any discounts offered for good grades to learn if you can save.
- Choose a safe, used vehicle. Naturally, your newly-licensed driver may love the idea of driving a brand new sports car, but you probably won’t be very happy with the price of your auto insurance policy if you choose to indulge this wish.
Newer vehicles cost more to insure because they can cost more to repair if something goes wrong. On the other hand, a safe, used vehicle could net you some solid discounts (while potentially protecting your child better in the event of a collision).
- Use telematics. Telematics is technology that tracks and reports driving habits to your insurance company. This is usually accomplished through an app, but your insurance company may provide you with a separate device.
Some insurance companies will offer discounts just for signing your son or daughter up to use their telematics. Other reports show it’s possible to save up to 40%, though this will be based on his/her driving tendencies. Depending upon the insurance company, a telematics device may also provide you with the opportunity to monitor your teen’s driving habits. This would allow you to address any dangerous behaviors, such as hard braking or rapid acceleration.
LexisNexis reports that, in the United Kingdom where telematics is widely used, the number of teenage drivers killed or seriously injured in traffic accidents has decreased by 35% since 2011. LexisNexis asserts that this sizeable reduction is compelling evidence of the importance of telematics insurance.
- Shop around for the best premium. It’s smart to get quotes from several insurance companies, especially when you’re adding an adolescent to your auto policy. Not all providers are the same. Insurers can offer different rates for similar coverage and may have different discount options as well.
Shopping around to make sure you’re getting the best deal when you first add your child to your policy is a great start, but don’t stop there. Compare rates from multiple carriers each year before you renew your auto insurance policy. Doing so can help you make sure you’re getting the coverage you want at the best rate available.
The Best Way to Save
As a parent, you should talk to your son or daughter regularly about driving safety. These conversations are an important step in helping him/her learn how to make (and keep making) smart driving choices.
You can also create a family driving agreement, like this one offered by the CDC, to make sure you and your teenager are on the same page. Post the agreement on the fridge so that you’ll remember to discuss and update it often.
Remember, helping your young driver develop safe driving habits is the single best way to save on teen car insurance and, most importantly, keep him/her safe behind the wheel.
Michelle Lambright Black, Credit Expert and Founder of CreditWriter.com
About the Author: Michelle Lambright Black, Founder of CreditWriter.com and HerCreditMatters.com, is a leading credit expert with over a decade and a half of experience in the credit industry. She’s an expert on credit reporting, credit scoring, identity theft, budgeting, and debt eradication. Michelle is also an experienced personal finance and travel writer. You can connect with Michelle on Twitter (@MichelleLBlack) and Instagram (@CreditWriter).