Insuring Teen Drivers: Affordable Options For Parents

Car insurance for 16-year-olds is the most expensive, with the average rate for full coverage being $7,149 per year. This is due to their lack of experience and higher risk of accidents. The cheapest way to insure a 16-year-old driver is by adding them to a parent's insurance policy, as teens on their own policy pay much more. The best insurers for cheap teen insurance are GEICO and State Farm, with Travelers also offering good rates. To save money, it's recommended to shop around for quotes, choose a safe car model, and look for discounts such as good student discounts.

Add the 16-year-old to an existing family policy

Adding a 16-year-old to an existing family policy is generally much cheaper than putting the teen on a policy of their own. According to Forbes Advisor's analysis, it costs $2,735 a year on average to add a 16-year-old to a parent's car insurance policy, while the average insurance cost for a 16-year-old driver with their own policy is $8,765 per year. Erie is the cheapest insurance company for adding a 16-year-old to a parent's policy, at $932 less than the national average.

When adding a 16-year-old to an existing family policy, it's important to consider the impact on the overall insurance cost for the family. The average price of a parent's car insurance policy with a 16-year-old driver included is $5,697 per year, based on the companies analysed by Forbes Advisor. It's worth noting that adding a teen driver to a parent's policy can cause the rate to jump by 70% to 150%. Therefore, it's essential to shop around and compare quotes and discounts from different insurance providers.

There are several factors that affect the cost of insuring a 16-year-old driver. Firstly, age and gender play a significant role. Young male drivers are considered to be at a much greater risk of being involved in accidents than young female drivers. According to the Centers for Disease Control and Prevention, fatal crash rates for boys aged 16-19 are three times higher than for females in the same age group. As a result, the cost of insuring young male drivers is about 10% higher than that of young female drivers.

Another factor that affects insurance costs is the type of car. Sedans, minivans, and SUVs typically have the best rates for teen drivers. Additionally, buying a used car with some mechanical issues or cosmetic damage can help reduce insurance costs. It's also worth considering a low-mileage discount, as many insurance companies offer discounts for driving less than 10,000 miles per year, with even higher discounts for lower mileage.

It's important to note that insurance companies view teen drivers as high-risk due to their lack of experience. As a result, adding a 16-year-old to an existing family policy will likely result in an increase in premiums. However, there are ways to mitigate this, such as enrolling in a pay-as-you-drive (PAYD) telematics program, which offers discounts for good driving behaviour. Additionally, some insurance companies offer family plan discounts when young drivers obtain their own insurance plan with their parents' insurer.

Choose a safe, modest vehicle

When it comes to choosing a vehicle for a 16-year-old driver, opting for a safe and modest car can significantly impact the cost of insurance. Here are some important factors to consider:

Vehicle Safety Rating

One of the most critical aspects is the vehicle's safety rating. Cars with high safety ratings are often viewed more favourably by insurance companies, resulting in lower premiums. These vehicles are designed to mitigate the risk of accidents and reduce the severity of injuries in the event of a collision. When shopping for a car, be sure to research and compare the safety ratings of different models. Websites like Insurance.com and IIHS.org provide valuable resources for finding safe vehicles.

Modest and Conventional Vehicles

Opting for a modest car over a flashy or high-performance vehicle can also lower insurance costs. Teen drivers are often attracted to sports cars or luxury vehicles, but these can significantly increase insurance premiums. Instead, look for conventional and reliable models that are not known for speed or high performance. Insurance companies tend to offer lower rates for these types of vehicles because they are generally cheaper to repair or replace and are less likely to be involved in accidents.

Age and Condition of the Vehicle

Consider choosing an older vehicle, as newer cars typically require higher coverage limits, which can increase costs. An older car in good condition may be a more affordable option, and you can consider dropping collision and comprehensive coverage if the car has already depreciated in value. Additionally, certain makes and models of vehicles are known for their reliability and safety, so be sure to research which cars are recommended for teen drivers.

Vehicle Type and Features

The type of vehicle and its specific features can also impact insurance rates. For example, a four-door sedan is often cheaper to insure than a two-door coupe or a convertible. Additionally, look for cars with safety features like airbags, anti-lock brakes, and electronic stability control. These features can help reduce the risk of accidents and lower insurance costs.

Example Vehicles

One example of a vehicle that is generally affordable to insure for young drivers is the Subaru Forester. According to MoneyGeek's analysis, it is the cheapest car to insure for drivers aged 16 to 19 when considering the latest models and full coverage policies. Other vehicles known for being affordable to insure include the Honda CR-V, the Jeep Wrangler, and the Ford F-150.

In summary, choosing a safe and modest vehicle for a 16-year-old driver can significantly impact the cost of insurance. By considering vehicle safety ratings, opting for conventional and reliable models, and being mindful of the age and condition of the car, you can find options that will help keep insurance premiums lower.

Seek out discounts for good students

Car insurance for 16-year-olds is the most expensive due to their lack of driving experience and higher risk of accidents. The good news is that many insurance companies offer good student discounts for young drivers who perform well in school. Here are some ways to seek out these discounts:

Maintain Good Grades

Good grades are often a requirement to qualify for a good student discount. The required grade is usually a "B" average (3.0-grade point average) or higher. Maintaining good grades tells insurance companies that you are a responsible young adult, which can lead to significant savings on your insurance premiums.

Shop Around for Insurance Providers

Not all insurance companies offer good student discounts, and the requirements may vary. It's important to shop around and compare quotes from multiple insurance providers to find the best rates and discounts for your situation. Some companies, like Travelers, Geico, and USAA, are known for offering competitive rates for young drivers.

Combine Good Student Discount with Other Discounts

Combining a good student discount with other discounts can further lower your insurance premiums. For example, you can look for insurers that offer discounts for students who are attending college away from home and leaving their car at home. Additionally, consider taking a driver's education course or a defensive driving course, which can also help you qualify for additional discounts.

Monitor Driving Habits

Some insurance companies, like Geico, offer programs that monitor your driving habits through a mobile app or a device installed in your car. These programs reward safe driving habits with discounts on your insurance premiums. This can be a great way to save money while also improving your driving skills.

Review Your Policy Regularly

Insurance rates and discounts can change over time, so it's important to review your policy regularly. Stay in touch with your insurance provider to ensure you're taking advantage of all the discounts you qualify for. Additionally, as your young driver gains more experience and maintains a clean driving record, their insurance rates may decrease over time.

Compare quotes from different companies

Comparing quotes from different companies is a great way to find the cheapest car insurance for 16-year-olds. Rates vary significantly depending on the company and the specific circumstances of the policyholder. For example, the average rate for full coverage car insurance for a 16-year-old driver is $7,149 per year, while a 17-year-old pays $5,954.

It's important to shop around and seek out teen driver discounts. Getting quotes from multiple insurance companies will help you find the lowest rates for your situation. For example, GEICO consistently offers cheap rates to teens and young drivers who buy their own policies, while State Farm is the cheapest for individual policies. The Zebra is another platform that can be used to get cheap car insurance quotes from GEICO, Progressive, Nationwide, Liberty Mutual, and Allstate, among others.

Additionally, consider the type of policy when comparing quotes. Typically, teens get lower rates when they're added to a family policy than when they get an individual plan. For example, GEICO provides the most affordable rate for teens on a family policy, while State Farm is the cheapest for individual policies. However, it's worth noting that adding a teen to a two-adult policy can more than double the cost of auto insurance.

When comparing quotes, also consider the specific coverage offered and any discounts that may be available. For example, some companies offer good student discounts for teens who maintain good grades. Additionally, choosing a safer and more modest vehicle can often result in lower rates, as insurance companies offer lower rates for teenagers who drive safe cars.

Delay getting a license

Delaying getting a license is an effective way to reduce insurance costs for 16-year-old drivers. While this option may not be popular with eager teens, it is worth considering the potential savings. Insurance rates tend to decrease with age, as older drivers are considered less risky due to their added driving experience and lower likelihood of accidents.

For example, the average insurance rate for a 16-year-old driver is $7,149 annually, while a 17-year-old pays approximately $5,954, and an 18-year-old pays around $6,110 for their own policy. The rates continue to drop as the driver ages, with a significant decrease by age 20. Therefore, by delaying getting a license until an older age, a teen driver can benefit from lower insurance rates.

Additionally, insurance companies offer various discounts for older drivers, such as good student discounts and defensive driving discounts, which can further reduce the insurance premium. These discounts are often available to students maintaining a "B" average or higher and those who have completed extra driver education or defensive driving courses. By waiting until they are older, teen drivers may be able to take advantage of these cost-saving opportunities.

Delaying getting a license can also provide time to save money for a car and insurance. During this time, teens can contribute to the increased premiums they will likely face when they do start driving, helping them understand the financial responsibilities of car ownership and encouraging careful driving habits. Furthermore, delaying getting a license can give teens more time to gain valuable driving experience, reducing their risk profile and potentially resulting in lower insurance rates when they do obtain their license.

While delaying getting a license can be a financially prudent decision, it is important to consider the impact on a teen's independence and the potential delay in gaining essential life skills associated with driving. Additionally, it is worth noting that insurance rates for teen drivers are already high, and even a one-year delay may not significantly reduce the overall cost when compared to the total insurance expenses over several years.

Frequently asked questions