Smart Ways To Save On Auto Insurance At 18

Car insurance for 18-year-olds can be expensive, with rates varying based on gender, location, and whether the teen driver is on an individual or family policy. The good news is that there are ways to save on auto insurance for 18-year-olds, including taking advantage of discounts, choosing the right coverage and deductible, and selecting an affordable vehicle.

The cheapest car insurance companies for 18-year-olds include GEICO, Erie Insurance, State Farm, USAA, and Travelers, with average annual rates ranging from $2,431 to $3,803 for full coverage. Staying on a parent's policy or being added to it can also help lower costs.

Compare quotes from multiple companies

Comparing quotes from multiple companies is an effective way to save money on auto insurance for 18-year-olds. Here are some tips to help you compare quotes and find the best rates:

• Get quotes from multiple insurers: It is recommended to get quotes from at least two or three companies. Compare quotes from both large companies, such as Allstate, Progressive, and State Farm, as well as regional companies. This will help you find the most affordable option for your needs.
• Understand the different types of coverage: Make sure you understand the different types of coverage available, such as liability, comprehensive, and collision coverage. This will help you compare quotes on a like-for-like basis and choose the right coverage for your needs.
• Provide accurate information: When requesting quotes, make sure to provide accurate and detailed information about yourself, your vehicle, and your driving history. This will help ensure that the quotes you receive are accurate and reflect your specific situation.
• Compare the same levels of coverage: When comparing quotes, make sure to compare the same levels of coverage across different companies. This includes the same levels of liability, uninsured/underinsured motorist protection, and deductibles for collision and comprehensive coverage (if applicable).
• Consider your individual needs: Think about your specific needs and preferences when comparing quotes. For example, do you want a company that offers a mobile app, or do you need ridesharing coverage for a side gig? Considering your priorities will help you choose the right company and coverage for your needs.
• Look for discounts: Many insurance companies offer a range of discounts that can help lower your premium. For example, you may be eligible for a good student discount, a safe driver discount, or a discount for bundling your auto insurance with other types of insurance, such as renters or homeowners insurance. Be sure to ask about any applicable discounts when comparing quotes.
• Check financial strength and customer reviews: In addition to price, consider the financial strength and customer satisfaction ratings of the insurance companies you are comparing. This will help ensure that the company is financially stable and able to pay out claims, and that they provide reliable and responsive customer service.

Opt for a higher deductible

Opting for a higher deductible is a great way for 18-year-olds to save money on their auto insurance. A deductible is the amount you pay out of pocket when you make a claim. The higher the deductible, the lower the premium—meaning you can reduce your monthly insurance payments by accepting more financial responsibility in the event of a claim.

For example, if you have a $1,000 deductible and the cost to repair your car after an accident is $4,000, you will have to pay the $1,000 deductible out of pocket, and your insurance company will cover the remaining $3,000.

There are a few things to consider before choosing a higher deductible. Firstly, you need to be able to afford the higher out-of-pocket costs in the event of a claim. Secondly, if you have a history of car accidents or engage in high-risk driving behaviours, you may want to stick with a lower deductible to avoid paying high out-of-pocket costs for frequent claims.

Additionally, the value of your vehicle should be considered. If your car is not worth much, a lower deductible might be better since the cost to repair damage may not be worth the higher deductible. On the other hand, if you have an expensive car, a high deductible could make sense as it would result in higher savings on your premiums.

Finally, it's important to remember that while a higher deductible can lower your monthly insurance costs, it also means taking on more financial risk. Make sure you understand the terms of your insurance policy and choose a deductible that you are comfortable with.

Drive an older or cheap vehicle

If you're an 18-year-old looking to save money on auto insurance, one of the best ways to do so is to drive an older or cheaper vehicle. Older cars are generally cheaper to insure because they have lower market values, so insurance companies have to pay out less if your car is damaged or totaled.

Choose the Right Insurance Company

Auto-Owners, Erie, and Geico are known for offering cheap auto insurance for older vehicles. Auto-Owners, in particular, has the cheapest rates for minimum coverage for older cars, with an average monthly rate of $27. These companies often have lower rates for older vehicles due to reduced retail and repair costs.

Compare Quotes from Multiple Companies

It's important to shop around and compare quotes from different insurance companies. Rates can vary significantly, so by comparing quotes, you can find the most affordable option for your older or cheaper vehicle.

Take Advantage of Discounts

Many insurance companies offer discounts for older vehicles. Look for companies that provide discounts for low mileage, safe driving records, or the installation of anti-theft devices. You may also be eligible for a discount if you have other insurance policies, such as homeowners or renters insurance, with the same company.

Increase Your Deductible

Another way to lower your insurance costs is to choose a higher deductible. A deductible is the amount you pay out of pocket before your insurance company covers the rest in the event of a claim. By opting for a higher deductible, you can reduce your monthly or annual premium.

Improve Your Credit Rating

In addition to your driving record, your credit rating can also impact your insurance costs. Maintaining a good credit score can help you secure lower insurance rates, as insurance companies may view you as a lower-risk customer.

Review Your Coverage

As your vehicle ages, it's important to reevaluate your coverage. Consider dropping collision or comprehensive coverage if your car is older and has a low market value. In the event of an accident, the insurance company may total your car, and it may not make financial sense to continue paying for extensive coverage.

Stay on your parents' insurance policy

Staying on your parents' insurance policy is a great way to save money on auto insurance as an 18-year-old. Here are some detailed instructions and considerations to help you navigate this option:

Understanding the Benefits

Firstly, it's important to understand why staying on your parents' insurance policy is a financially prudent decision. Auto insurance for young drivers is notoriously expensive, with 18-year-olds often facing higher premiums than older, more experienced drivers. This is because younger drivers are considered higher-risk by insurance companies due to their lack of driving experience and the statistics showing higher accident rates among this age group. By staying on your parents' policy, you can take advantage of their lower premiums and established insurance history, resulting in significant cost savings.

Eligibility and Requirements

Now, let's discuss the eligibility requirements for staying on your parents' insurance policy. The good news is that there is no age limit for staying on your parents' car insurance. As long as you live in the same house or are a full-time college student, you can remain on their policy. This applies even if you are married and living with your spouse in your parents' home. However, if you move out permanently or establish financial independence, you will typically need to purchase your own insurance policy. Additionally, if you own your own vehicle, you may be required by law in some states to have your own insurance policy, especially if the name on the car title does not match the name on your parents' insurance policy.

Impact on Insurance Rates

Adding a young driver like yourself to their insurance policy will likely cause your parents' rates to increase. However, this increase is usually much lower than what you would pay for an independent policy. To help offset this increase, you can contribute financially by arranging to pay your parents the difference in insurance premiums each month. Additionally, as a student, you may be eligible for good student discounts, which can further reduce your parents' annual premiums.

When to Consider an Independent Policy

While staying on your parents' insurance policy is a great way to save money, there are a few scenarios where purchasing your own policy may be more advantageous. If your parents have a poor driving record with multiple tickets and accidents, sharing a policy with them could actually result in higher rates for you. In this case, it might be more cost-effective to have your own policy. Additionally, once you turn 25, your insurance rates will likely decrease significantly, making it a good time to consider an independent policy.

Look for discounts

There are several discounts available for 18-year-olds looking to save money on their car insurance. Here are some of the most common ones:

Good Student Discount

If you're a full-time student with good grades, you may be eligible for a good student discount. This discount is typically available to students who are under 25 years of age and have at least a B average or a 3.0 GPA. Some companies may require you to submit proof of your grades, such as a copy of your report card.

Defensive Driving Discount

Graduating from an accredited defensive driving course can also help you save money on your car insurance. This shows insurers that you care about safety on the road and can prove that you're a lower-risk driver.

Resident or Distant Student Discount

If you're a student who attends school more than 100 miles away from home and doesn't have a car, you may be eligible for a resident or distant student discount. This discount can range from 5% to 35% depending on the insurer.

Low Mileage Discount

If you don't drive your car often, you may be eligible for a low mileage discount. The fewer miles you drive, the less likely you are to be involved in an accident, which reduces the risk for the insurance company.

Telematics Discount

Some insurance providers offer telematics programs, which track your driving habits through a smartphone app or plug-in device. These programs reward safe driving practices with a discount based on your driving score. However, it's important to note that under some insurers' programs, your rates could increase if they detect poor driving habits.

Multi-Policy or Multi-Vehicle Discount

If you have multiple insurance policies with the same company, such as renters or homeowners insurance, you may be eligible for a multi-policy discount. Additionally, if you have more than one vehicle insured with the same company, you may qualify for a multi-vehicle discount.

New Vehicle Discount

If you're driving a new car, you may be eligible for a new vehicle discount. Newer cars often have more advanced safety features, which can help reduce the risk of accidents.

Safe Driver Discount

If you have a clean driving record and no claims, you may be eligible for a safe driver discount. This discount rewards drivers who have proven to be low-risk and safe on the road.

It's important to note that not all insurance companies offer the same discounts, so it's always a good idea to ask your agent about any potential discounts you may be eligible for. Additionally, the eligibility requirements and savings amounts may vary between companies, so be sure to compare quotes and shop around to find the best deal for your specific situation.

Frequently asked questions