Teaching a teenager to drive is enough to test your patience, but knowing how to save money on teenage auto insurance can be equally challenging. Fortunately, there are ways to leverage auto insurance discounts for teenage drivers, as long as you’re willing to do a little research and comparison shopping.
Insurance is most expensive for young drivers, but rates will decrease with time. If you’re concerned about how to afford insurance for a teen driver, it’s important to know where to look for discounts and which insurance companies are better suited for insuring your teenager.
Why it costs more to insure teen drivers
The cost to insure teen drivers depends largely on whether or not they are added to your policy or on their own policy. For example, the average cost for an 18-year-old driver on their own policy is $5,335 a year for full coverage, which is more than triple the national average of $1,738 a year for full coverage for a 40-year-old driver. Having a teen added to your policy will be cheaper overall, in most cases.
The reason for the higher premiums is simple: teen drivers typically practice more at-risk driving behaviors. According to the CDC, a teen driver is riskier behind the wheel because they are:
- Not using seatbelts
- More likely to drive distracted
- Higher rates of alcohol use
- More likely to speed
- More likely to be involved in vehicle crashes at nights and on the weekends
Despite these numerous risk factors, it is still possible to save money and take advantage of discounts.
How to save when adding a teen driver
Insurers charge higher rates for teens than for any other group of drivers, but teen driver discounts and other measures can help lower costs significantly. In particular, driving behavior programs, good student discounts and telematics can help provide reductions in premiums. Here are a few discount opportunities to explore:
Good student discount
Is your kid a star student? It’s common for car insurance companies to offer discounts when teens are in high school or college and earning top grades. For instance Allstate offers a good student discount to unmarried drivers, under 25 years of age, who have at least a B- average. The good student discount can significantly impact your premiums too. For example, State Farm offers up to 25% savings for students with good grades, up to age 25 or your last year of school.
Enroll in a safe driving course
Accidents on a teen’s driving record can cause rates to increase substantially, especially compared to drivers in other age groups. Many insurers now promote driver safety courses as a way to teach young, inexperienced drivers the rules of the road — and provide teen driver discounts. Geico, State Farm, Allstate and Travelers are all examples of carriers that reward drivers with a premium discount upon completion of required driver safety training courses.
Distant student discount
If your young adult driver lives away from home to attend college and leaves their car parked in your driveway, they might be eligible for a distant student discount. Most insurance companies provide a discount if your student lives a specified number of miles away (typically 100 miles or more). This is a great discount to have when combined with the good student discount.
Similar to the distant student, if your teen drives the car a low number of miles each year, then ask about a low-mileage discount. For example, Nationwide offers the pay-per-mile option through its SmartMiles program, providing coverage with a premium that changes each month, depending on the number of miles actually driven.
Consider the teen’s car
Most teen drivers may hope or dream for a fancy, new car, like a Ferrari or Porsche. But it’s far more likely that their first vehicle will be a gently used or modest sedan. Buying a broken-in car for a teen driver may save you quite a bit on insurance.
However, newer cars can also contribute to insurance savings too. For example, newer cars have some safety features — such as anti-theft devices, airbags and anti-lock braking systems — that can net lower premiums or make you eligible for specialty discounts. Older cars may not have all of these features.
Take advantage of telematics
Modern technology makes it easier than ever to keep an eye on your teens when they take to the road. Several insurers offer electronic devices that allow you to monitor teen driving habits.
For instance, with Allstate families can enroll in the Drivewise program, in which a small device is installed in the vehicle. The information that’s gathered includes the number of miles the car travels, how fast it’s driven, the hours that the car is on the road and how often the brakes are applied hard.
Where to shop for teen driver car insurance
Knowing which carriers offer the best discounts for teen drivers while providing adequate coverage is critical. Comparing quotes is not only important, it also allows you to see equal coverage comparisons to make sure your teen has adequate insurance coverage at a competitive price. In addition, many insurance carriers will work with you to find the best insurance discounts for teen drivers.
Here are a few of the carriers Bankrate ranks the highest for teen drivers:
- Geico: Geico stands out because of the youth-specific discounts offered for teen drivers, including good student and multi-policy discounts.
- State Farm: State Farm also allows your teen driver to take advantage of a multitude of discounts geared towards their demographic, some of which will last through college.
- Progressive: Progressive offers the Snapshot program, which is a telematic program designed to monitor teen driving habits, and reward them with lower teenage insurance premiums. For safer teen drivers, this can be advantageous.
- Nationwide: Nationwide offers an array of discounts for teens, including a good student and distant discount, plus access to the Nationwide SmartRide program to monitor safe driving habits.
Frequently asked questions
What is the best car insurance company?
There are many factors to consider when choosing a car insurance company, ranging from average annual premiums to optional coverages and digital assets available. In Bankrate’s recent review of best car insurance companies, State Farm ranked the highest, scoring a 3.93/5 based on premiums, financial ratings and high customer service rankings.
What is the best used car for teen drivers?
The vehicle your teen drives is a significant factor to evaluate when considering the affordability of insurance for a teenager. The type of vehicle is not only important for safety features, but also the cost to insure. The 2012-2016 models of the Honda Civic and the 2012-2014 Toyota Camry consistently rank high for both safety features and reliability.
Should I add my teenager to my existing policy?
On average, a 16- or 17-year-old will cost less to insure by adding them to your existing policy, versus them having their own policy. This is another effective strategy when thinking about how to lower teenage car insurance.