Being a young driver comes with an increased financial burden, via expensive car insurance. It is possible to decrease the cost of car insurance for young people using the industry standard tactics that work for any age group; however, there are also promotions that only young drivers qualify for that can make car insurance affordable.
Getting the Best Rate on Car Insurance
Be a Safe Driver
Driving safely is the first step to keeping insurance rates low. This means driving defensively, maintaining speeds within stated limits, never driving under the influence, and obeying all traffic laws. Below are a few other considerations to improve driving habits:
Stay focused. Don’t text and drive, don’t be on the phone with friends. If your passengers are being rowdy, remind them that you are driving and need concentration.
Be alert. Don’t ever drive while sleepy. Be sure to consider the impact of medications on your awareness and response time before driving.
Consider other drivers. Always check your mirrors before turning or changing lanes. Be able to compensate for the actions and mistakes of drivers make.
Compensate for weather conditions. It’s best not to travel when the weather is bad; however, if traveling in inclement weather, always slow down to a speed appropriate for the conditions and be prepared to take detours if necessary.
Look for multi-line discounts. Most insurance providers offer discounts on overall premiums when you have multiple insurance policies through their agency.
This can include life, homeowner’s, renter’s, motorcycle, boat, and other forms of insurance.
Ask about promotions. Some providers have a term bonus for safe driving. Some providers run specials on different levels of coverage and what is included.
When contacting an insurance agent for a quote, always be sure to ask if they have any promotional programs that you can benefit from.
Think When you are a Younger Driver
Age and gender can impact rates. Young males are assessed higher premiums than females of the same age; however, both genders, aged between 16-25, cause a significant increase in insurance premiums.
For young males, insurance rates can increase rates by between 59-118%, depending on where you live.
Although there are ways to reduce the amount you pay, individuals under the age of 25 will pay significantly older than adult drivers.
Ask about “good student” discounts. Some insurers offer discounts for good grades, correlating high GPA with increased personal responsibility and decreased likelihood of risky behavior that could lead to a car accident. In order to qualify for good student discounts, the following conditions will have to be met:
Be younger than 25 years of age.
Be a full-time student at highschool, college, or university.
Maintain at least a “B” (3.0) average GPA, and/or be on the Honor Roll or Dean’s List.
Remain on a family policy. In many if not most cases, young drivers are added to their parent’s existing insurance policy. This becomes an “umbrella policy” and allows the teen to be listed as an “occasional driver” for a vehicle, keeping the rates lower than if the teen is listed as a primary.
Make sure the title is in the name of the policyholder. In order to receive the benefit of an umbrella policy, you must surrender the title of the vehicle to the policyholder.
Be careful. Any accidents that happen will raise the rates on the entire policy by at least 25%
Doing Your Research
Get quotes. When purchasing insurance, it is important to shop around, getting quotes from several different sources. Not only does this give you a sense of what your average rate will be, it can also give you bargaining power when you do finally settle on a provider.
Most major insurance companies have online rate generators at no extra charge. You can also complete self-quotes online.
Understand types of coverage. Certain types of payment plans for cars contractually require certain levels of coverage. Additionally, if you are looking at used cars, buying an older car, with reasonable safety scores and a low resell value, you can usually get by on the minimal coverage for your area.
Cars on lease or lien require comprehensive coverage, which means that insurance will cover the cost of all accident-related repairs and replace the value of the vehicle in the event it is totalled in an accident.
Understand how area or region impacts insurance rates. Insurance rates vary wildly throughout the United States and other parts of the world.
Some regions like Hawaii forbid assessing insurance based on age or gender, so a teenager would pay the same as an adult.
Florida requires “Personal Injury” insurance on all automotive policies, running about $200 per term.
Some places assess insurance rates based on the safety mechanisms the car provides; other places assess on the basis of the cost to replace the car in the event of an accident.
In Puerto Rico, car insurance is state subsidized to ensure everyone has access to it.
Understand that vehicle type and age can impact rates. In some states, certain types of cars are seen as inviting accidents or more prone for damage in accidents, so the rates can be accessed with that risk in mind.
An older car usually has a lower resale value, which can be helpful on states like South Carolina, where insurance is based on value of the car. In Florida, however, because an older car has fewer safety accommodations, the same car would be more expensive to insure than a new car.
High-end cars mean higher premiums. Particularly foreign cars that require dealer parts mean higher insurance rates because they cost more to repair.
Bigger motor means bigger cost. Cars with more powerful motors are designed for speed and, when you buy one, your insurance company assumes you plan to drive it fast and assesses your policy as a greater risk.
Theft risk matters. Insurance rates depend on a good many factors, even including the rate of theft for certain makes and models of car, independent of the actual value of the vehicle.