Having a new teenage driver in the house is nerve-wracking and very expensive. In addition to the purchase of a car, gas, registration, and inspections, parents need to worry about the new monthly expense of car insurance. While car insurance is necessary, it is very expensive to insure a teen driver. Insurance expenses can easily cost a family a couple of hundred dollars each month. Thankfully, there are things that you can do in order to bring your teen’s insurance expenses in line with your family budget.
Take a Driver’s Education Course with Your Teen
Nearly all insurance companies offer discounts to insured drivers who complete a driver’s education course. This is true for all of the licensed adults in the household. Find a local driver’s education school and register yourself, your spouse, your new teen driver, and any other licensed drivers on your insurance plan. Not only will taking the class together save you a large percentage of your car insurance bill each month, it will also give you the opportunity to bond with your teenager.
Choose a Vehicle Carefully
Certain vehicles are more expensive to insure than others, so choosing a safer car will save you money each month. In terms of affordability, small and mid-sized sedans that are three to four years old are the cheapest to insure. Choose a car that is not brand new, as repairs are expensive on new vehicles, but also not so old that the insurance company anticipates problems. Avoid sports cars and sport utility vehicles, as well.
Ask About Discounts
Receiving discounts on your insurance rates, even if they are not directly related to your teen driver, can save you big money each month. Some common discounts include multiple policy discounts, which are offered to customers who insure their vehicles and their home with the same company. Good student discounts are also available from many companies, and are offered to student drivers who maintain a B average or higher. Other companies offer auto-pay discounts, as well. Be sure to ask your insurance company which discounts are available to you. Do not be afraid to compare policies if your company is not willing to offer discounts.
Consider Your Coverage
If your teen’s vehicle has a lien, you do not have much flexibility in terms of your insurance coverage. However, if your teen is driving an older car that was purchased for cash, you have the option of choosing liability-only insurance. This insurance is considerably cheaper than other options, but provides less protection in the event of an accident. Be sure that you understand the terms of the policy before making a change.
Review Your Deductible
Policies with higher deductibles have lower monthly premiums. Your deductible should be as high as you can afford, as you will need to pay it out in the event of an accident. If your insurance company offers deductibles of $200, $500, or $1000, you will save a large amount of money each month by choosing the $500 or $1000 option.