Handing a set of car keys to your teenager can be a daunting experience and not just because of concerns for their safety. Car insurance for teens can cost an arm and a leg and if you are paying for it then you will want to make sure that you’re getting the best possible deal.
While it might be true that in most cases, adding a teenager to your insurance policy could drive up the cost by as much as 150%, this doesn’t mean that you simply need to accept the first offer that crosses your path. In fact, there are ways that you can cut these costs right down – you simply need to know how to do that.
Can My Teen Get Their Own Policy?
You might not want to drive up the costs of your own insurance by adding your teenager to the mix, but your child could end up paying even more for their own policy than if they were attached to your policy.
According to the experts, the average cost of insurance for a teenager aged 16 years is almost $4,000 every year. What is more, even if they could afford this amount (and there are few teenagers outside of Hollywood who could), you would still likely need to co-sign the policy for them and so you’d be financially liable regardless.
What is a Driver Assignment?
Insurance companies tend to assign high risk drivers (that would be your teenager) to the costliest vehicles on a policy and this causes the premiums to skyrocket. In order to bring this down, you need to make sure that these drivers are assigned to the cars that they will be driving and not any others.
It is also important that you ensure the vehicle you purchase for your teen is within your budget – not only in the sense of what you can afford now – but in terms of the ongoing costs of ensuring that sort of vehicle. If you’re not sure about how the cost of a vehicle can impact your insurance premiums, take some time to compare policies on different makes and models.
Why Would my Teens Grades Matter?
While it might not seem like it makes a big difference, a teen with good grades is usually a better driver, so this makes a big impact when it comes to taking out an insurance policy for them.
If you’re under 25 years of age, bragging about good grades could end up benefiting you with a discount of as much as 25%. In order to benefit from your child’s performance at school, simply ask your insurance provider a bit more about your options. You might find that additional criteria, such as being on the honor roll or even having a B average, will all benefit you when it comes to insuring them.
What if My Child Studies Away From Home?
If your child’s school or college is based far from home and they won’t end up using their vehicle during the term time, it might be beneficial for you to pass this information on to your insurance company.
You might find that simply because your teenager won’t be using the car very often, this means that he or she will benefit from up to 30% of a discount. Keep in mind that while most insurance companies offer this type of benefit, it’s quite common for them to limit the offer to those attending schools as far as 100 miles from home.
How Can Driving Classes Help to Lower Premiums?
Driving classes are a great way to show that your child is committed to driving safely and this, in turn, could end up getting you some great discounts – as much as 10% in some instances.
To benefit from these courses, you’ll need to contact your insurance company and ask about which courses are approved by them – you’ll then need to make sure that your child not only signs up for the course, but also completes it.
Should I Increase the Deductible?
Increasing your deductible will usually lower your overall premiums, but you need to make sure that you’ll be able to afford the deductible in the event that the worst should happen. You might find that an increase up to $500 will usually decrease your premiums by about 12% on your overall premium.
Should I Tell My Insurer That I’m Shopping Around?
Don’t just assume that unspoken loyalty is rewarded – when it comes to insuring a vehicle, it rarely is. When the time comes for you to purchase insurance again, make sure that you tell your insurance company that you are shopping around and that you are willing to swap to another company if you get a better rate.
Is There Any Car Insurance For Teens Discount If I Pay the Coverage Upfront?
Most people tend to pay for their insurance on a monthly basis, but did you know that you can pay it all upfront – and qualify for a great discount in the process? In some instances, this discount might add up to as much as 10%.
How Does my Credit History Impact my Insurance?
Did you know that a poor credit history will often negatively impact the cost of the policy you get? By improving your credit rating, you could actually end up benefiting from improved policy rates, so it’s worth taking the steps to start rebuilding this, if your credit rating is poor.