Tips for Lowering the Cost of Car Insurance for New Drivers
While adding a new driver to your insurance can be a shock to your bank account, you can look for ways to reduce the extra expense.
Add the new driver to your own car insurance policy
Parents looking for the best cheap car insurance for teens should be aware that it’s usually less expensive to add a teenager to a parent’s insurance policy rather than putting the teen on their own policy.
For example, the average cost for a 16-year-old with their own policy is $8,765 a year. That’s about $3,000 more than the cost of a parent policy ($5,697 a year) with a driver age 16 added, based on Forbes Advisor’s analysis.
Ask about car insurance discounts for your new driver
Common discounts relevant to new drivers include good student discounts (typically for a B average or above) and, for college students, a “student away at school” discount. If the student attends school 100 miles or more away from home, without a car, you can often qualify for a price break.
In addition, teen driver insurance programs can provide both a discount and valuable driving skills training. Keeping accidents off a teen’s record will safeguard your future rates.
You can also qualify for a multi-car discount if you buy a car for your teen and insure it on your policy.
Choose a higher deductible
If you buy collision and comprehensive insurance, you’ll choose a deductible. You can usually save money by having a higher deductible—such as $1,000 instead of $500.
Ask your car insurance agent to give you car insurance quotes for various levels of higher deductibles. Then decide if the savings are worth it, keeping in mind that a new driver is more likely than an adult to crash.
Choose an affordable vehicle
Rather than putting your teen behind the wheel of a brand-new sports car, consider letting them drive an older SUV, sedan or minivan. While they’ll lose the cool factor, it will generally cost less to insure a car that’s safe and relatively cheap to fix than it will to insure a sports car.
That’s because insurers take into account a vehicle’s value, repair costs and theft rate when determining insurance costs. They will also consider past claims and payouts as they relate to a specific make and model of vehicle.
Delay the driver’s license
You might be able to save money if your teen waits to obtain a driver’s license. For instance, if they put off getting a license until age 17 or 18, you could pay less for your teen’s coverage.
The average annual cost for a parent’s car insurance policy with a 16-year-old driver included is $5,697, based on our analysis. That drops to $5,323 a year when you include a 17-year-old driver on a parent’s policy, and to $5,065 a year for an 18-year-old driver listed on a parent policy.
Share a car with your teen as a secondary driver
One way to drive down the cost of car insurance for a new driver is to add them to your existing policy as a secondary driver on the least expensive car you own.
Shop around
This is the time to compare car insurance quotes, especially if you haven’t done so in a few years. Comparing quotes from multiple companies can lead you to a company with good coverage and the cheapest car insurance.
For example, we found that Erie and USAA charge slightly over $4,000 a year for two parents and a 16-year-old for $100,000 bodily injury liability coverage per person and $300,000 per accident. That’s compared to over $7,000 a year at Farmers and over $9,000 at Allstate, on average.
