New Drivers: Get Cheap Auto Insurance

How to Get Cheap Auto Insurance for New Drivers

New drivers typically face higher insurance rates due to their lack of driving experience, which is a key indicator of the likelihood of getting into an accident. However, there are ways to find more affordable coverage. Staying on a family auto insurance policy, if possible, is usually the cheapest option for new drivers. Comparing quotes from multiple insurance companies is also essential, as rates can vary significantly between providers. Additionally, new drivers can take advantage of various discounts, such as good student discounts, defensive driving course discounts, and multipolicy discounts. Choosing a moderately priced vehicle with safety features and a higher deductible can also help lower insurance costs.

Compare quotes from multiple insurance companies

Comparing quotes from multiple insurance companies is a great way to get the best deal on car insurance for new drivers. Shopping around for insurance can help you find the most affordable policy, as rates can differ significantly between insurers.

NerdWallet, for example, recommends getting quotes from at least three companies. The Zebra also suggests getting quotes from top insurance companies through their platform. ValuePenguin collected thousands of quotes from Texas and found that State Farm offered the best rates for new drivers. However, rates differ depending on age, location, and other factors, so it's important to get a variety of quotes to compare.

When comparing quotes, it's important to consider not just the price but also the coverage offered and the reputation of the insurance company. It's also worth asking about discounts, as many companies offer deals for students, safe drivers, and more.

Stay on a family policy

One of the best ways for a new driver to get cheap auto insurance is to stay on their family's policy. This is because the parents' insurance background, credit score, and driving history may lead to lower rates than the new driver would find on their own. By staying on a family policy, a young driver can save thousands of dollars per year.

There is no age limit for sharing a car insurance policy with your parents, as long as you live in the same house. Once you move out, you'll need to get your own policy. However, you can stay on your parent's policy if you're still considered their dependent. College students can usually stay on their parents' policy as well, provided they don't drive their own car while living away from home.

The cost of insurance for a new driver on their parents' policy is still relatively high. A new teen driver on their parents' policy pays nearly $2,664 per year for coverage, which is nearly twice the national average. For a 16-year-old driver, the cost is even higher, at $602 per month for a stand-alone policy on average. However, by sharing a policy with their parents, this cost can be reduced to around $286 per month.

State Farm is the cheapest car insurance company for young drivers on a family policy. On average, a full-coverage policy with parents and a teen driver from State Farm costs $183 per month. That's $68 per month less than the average.

Other Ways to Save on Car Insurance

While staying on a family policy is a great way to save money on car insurance as a new driver, there are also other strategies you can use to get cheaper rates:

• Compare quotes from multiple insurance companies.
• Choose a moderately priced vehicle with good safety ratings.
• Choose a high deductible.
• Look for discounts such as multi-policy discounts, defensive driving discounts, good student discounts, and more.

Choose a moderately priced vehicle

When it comes to getting cheap auto insurance for new drivers, one of the most important factors to consider is the type of vehicle they will be driving. Opting for a moderately priced vehicle can significantly reduce insurance costs. Here are some reasons why choosing a moderately priced vehicle is a smart choice for new drivers:

Insurance Premiums

The cost of insuring a vehicle is largely dependent on its value. More expensive, high-end, or luxury vehicles will inevitably lead to higher insurance premiums. This is because the insurance company will have to pay out more if the car is damaged or totaled. By choosing a moderately priced vehicle, new drivers can keep their insurance costs lower.

Safety Features

While it is important to consider the safety features of a vehicle, it is essential to know that not all safety features will result in lower insurance premiums. Basic safety features, such as airbags and anti-lock brakes, are standard in most vehicles and are expected by insurance companies. However, advanced safety features, such as adaptive cruise control or lane-keeping assist, may lead to higher insurance costs. This is because these features are often found in more expensive vehicles and may increase the cost of repairs. Therefore, new drivers should opt for vehicles with standard safety features rather than high-tech add-ons.

Age of Vehicle

In addition to the vehicle's price, its age also plays a role in insurance costs. Older vehicles are generally cheaper to insure than newer ones. This is because the value of a car depreciates over time, and insurance companies will not have to pay out as much in the event of a total loss. For new drivers, choosing an older, moderately priced vehicle can be a more cost-effective option.

Repair Costs

The cost of repairs is another factor that insurance companies consider when determining insurance premiums. Vehicles with expensive or specialized parts will lead to higher repair costs, which will be reflected in the insurance premiums. By choosing a moderately priced vehicle with widely available and affordable parts, new drivers can benefit from lower insurance rates.

Targeted Models

When selecting a moderately priced vehicle, new drivers should consider targeting specific models known for their safety and affordability. For example, opting for a reliable sedan, SUV, or minivan can be a better choice than a sports car or luxury vehicle. These vehicles often have lower insurance premiums due to their lower price tags and widespread availability of parts.

Alternative Options

If purchasing a vehicle, new drivers can also consider alternative options, such as buying a used car. Used vehicles have already gone through the initial period of depreciation, making them more affordable to insure. Additionally, new drivers can look for vehicles with lower mileage, as this can also impact insurance costs. By choosing a used, moderately priced vehicle, new drivers can further reduce their insurance premiums.

In conclusion, choosing a moderately priced vehicle is a wise strategy for new drivers seeking affordable auto insurance. By considering the vehicle's price, safety features, age, and repair costs, new drivers can find a balance between their budget and their insurance needs. This approach will help them secure a vehicle that is safe, reliable, and won't break the bank when it comes to insurance premiums.

Choose a high deductible

Choosing a high deductible is one way that new drivers can save money on their auto insurance. A deductible is the amount you pay out of pocket before your insurance carrier starts paying for repairs. While most drivers choose a $500 deductible, policies with higher deductibles tend to be cheaper.

For example, if you have a $3,000 repair and a $1,000 deductible, you would pay $1,000, and your insurance company would pay the remaining $2,000. However, if the repair costs less than your deductible, you'll have to pay the entire bill.

While a high deductible will lower your overall insurance rate, it will also increase your out-of-pocket costs if you file a claim. Therefore, it's important to evaluate your financial situation and your tolerance for risk before choosing a high deductible.

• Your likelihood of filing a claim: If you're more likely to file an auto insurance claim, you'll probably save more with a low deductible. On the other hand, if you don't plan on filing a claim, a high deductible could be a good way to save money.
• The value of your car: If your car isn't worth much, it's generally better to have a lower deductible. This is because, in the event of a total loss, your insurance company will only pay up to the actual cash value of your vehicle.
• Your cash savings: If you don't have savings or an emergency fund, choosing a low deductible might be a better option. The higher monthly insurance premiums associated with a low deductible may be more manageable than a large, unexpected bill after an accident.
• Your tolerance for risk: Choosing a high deductible is a gamble that you won't have an accident. If you're comfortable taking on this risk, a high deductible could be a good option. However, if you're risk-averse, a low deductible might be a better choice.

In summary, a high deductible can be a great way for new drivers to save money on their auto insurance. However, it's important to carefully consider your financial situation and your tolerance for risk before making this decision.

Look for discounts

Discounts are a great way to save money on car insurance for new drivers. Many insurance companies offer a range of discounts that can help reduce the cost of coverage. Here are some common discounts to look out for:

Good Student Discount

Insurance companies like State Farm, GEICO, and Nationwide offer discounts for students with good grades (usually a B average or a 3.0 GPA or higher). These discounts can save you up to 25% on your premium and may last until the student turns 25.

Driver Training Discount

Some companies, such as State Farm and GEICO, offer discounts for young drivers who complete an approved driver education course. This can be a great way to save money while also improving your driving skills.

Student Away at School Discount

State Farm offers a discount if one of the operators of the covered vehicle is a student under 25 who only uses the car during school vacations and holidays. This can be a significant saving for families with students who don't need regular access to a car.

Defensive Driving Discount

Taking a defensive driving course can lead to discounts with companies like GEICO and State Farm. This improves your driving skills and makes you a safer driver, which insurers reward with lower premiums.

Multi-Policy Discount

Bundling your auto insurance with other types of insurance, such as homeowners, renters, or life insurance, can lead to significant discounts. GEICO, for example, offers a Multi-Policy Discount when you insure your car and have another eligible policy through them.

Multi-Vehicle Discount

Insuring more than one car with the same company can also lead to savings. GEICO's Multi-Vehicle Discount can get you up to 25% off most of your car insurance coverages.

Vehicle Safety Discounts

Newer cars with advanced safety features often qualify for discounts. State Farm, for example, offers discounts for vehicles with driver-assist technology, and GEICO offers a discount of up to 23% for vehicles with airbags.

Anti-Theft System Discount

Cars with built-in anti-theft systems may also be eligible for discounts. GEICO offers up to a 23% discount on the comprehensive portion of your premium if your car has this feature.

New Vehicle Discount

Insuring a new vehicle can also lead to savings. GEICO offers a discount of up to 15% on certain coverages for new vehicles that are 3 model years old or newer.

Good Driver Discount

Maintaining an accident-free driving record or taking steps to become a better driver can lead to savings. State Farm's Drive Safe & Save™ app gives an initial discount just for enrolling, and you can save up to 30% based on your driving performance.

Other Discounts

There are also other discounts that may be available depending on your specific situation and insurance company. These include discounts for being a federal employee, having daytime running lights, or being a member of certain groups or organizations.

Frequently asked questions