With family finances generally always stretched to the limit, the addition of a teen to a family’s auto insurance policy can cause costs to rise significantly. But several tips can help families avoid taking a large financial hit.
For teen drivers who are only occasionally using a parent’s vehicle, insurers recommends that parents speak to their car insurance agent to have their teen added to their policy as an occasional driver, a step that can increase premium costs by 50 to 200 percent, according to MSN Money. Purchasing a separate policy should be avoided if possible, as car insurance policies for teens who are the principal drivers are even more expensive.
Vehicle Choices Factor into Student Car Insurance Quotes
Vehicle choices can also be key in determining student auto insurance rates. Flashy, sporty or expensive vehicles will result in much higher premiums than basic models, while older, less expensive cars are cheaper to insure. Fancier, high-performance vehicles can also be more distracting to teens that are new behind the wheel, who are already almost six times more likely to be in an accident than drivers aged 20 to 24, said the source.
The Age of Your Vehicle
An older vehicle can also bring down the cost of student car insurance because it can allow parents to drop collision coverage from the vehicle, leaving liability coverage as the primary insurance cost. This can also allow the policy holder to raise the deductible on their policy, which can make monthly premiums more affordable.
Student Discounts on Car Insurance Policies
While many insurers don’t offer specific packages for student drivers, there are many steps a young driver can take to cut costs on their auto policy. Full-time high school and college students under 25 can receive discounts from leading insurers for maintaining a high GPA, ranking in the top 20 percent of their class or making it onto their school’s Honor Roll or Deans List.
Student Drivers and Driving School
Enrolling teen drivers in a licensed driving school program can also reduce car insurance premiums, and also instill safe driving habits into the new driver. Research from the Centers for Disease Control and Prevention found that comprehensive graduated drivers licensing programs, which delay full licensing for new drivers until they learn how to operate a vehicle under low-risk conditions, can reduce injury-causing accidents by 40 percent and fatal crashes by 38 percent. The CDC also recommends limiting vehicle passengers and distractions to reduce the risk of a collision.