Smart Ways To Save On New Driver Insurance

Car insurance for new drivers can be expensive, with teens facing some of the highest insurance costs of any age group. This is because new drivers are considered a higher risk, with accident rates almost four times those of older drivers. However, there are several ways to save on new driver insurance. Shopping around and comparing quotes from different insurance providers is a good place to start. You can also save by choosing a more modest car, increasing your deductible, and taking advantage of discounts. For teens, good grades and safe driving habits can help lower insurance costs. Additionally, adding a new driver to an existing policy can be cheaper than purchasing a separate policy, and bundling policies with the same provider can also result in savings.

How to Save on New Driver Insurance

Opt for a used, modest car

Opting for a used, modest car is a great way for new drivers to save on insurance costs. Firstly, buying a used car is generally more economical than purchasing a new one. This is especially true for teens, as they are considered a high-risk group by insurance companies due to their higher accident rates. By choosing a used car, you can benefit from lower insurance rates while still ensuring your teen's safety on the road.

When selecting a used car, it's essential to consider the make and model, as these factors can significantly impact insurance rates. Look for vehicles with smaller engines, such as the Volkswagen Up, Hyundai i10, Kia Picanto, Skoda Citigo, or Seat Mii. These cars may not be as powerful, but they offer excellent value for money and can help you save on insurance. Additionally, consider the safety features of the car. While older vehicles may lack certain modern safety equipment, opting for a model with anti-theft devices and anti-lock braking systems can help keep insurance costs down.

Another advantage of choosing a used, modest car is the potential for lower maintenance and repair costs. Newer and more expensive cars often come with higher maintenance requirements and pricier replacement parts. By opting for a more basic model, you can often find more affordable mechanics and parts, which can save you money in the long run.

Finally, when insuring a used car, you may have more flexibility in choosing your coverage options. Since the car is likely to be less expensive, you can consider opting for a policy with higher deductibles or lower coverage limits. This can further reduce your insurance premiums and provide additional savings.

Remember, while opting for a used, modest car can help save on insurance costs, it's also important to establish a safe driving record, shop around for quotes, and seek out discounts to maximize your savings as a new driver.

Compare quotes

Comparing quotes is one of the most effective ways to save money on car insurance. By shopping around and comparing quotes from different insurance providers, you can identify the most cost-effective policies that meet your specific needs. Here are some tips to help you get started:

Understand the Factors Affecting Your Insurance Rates

Before comparing quotes, it's helpful to understand the factors that influence your car insurance rates. These include personal factors such as your age, gender, credit score, driving history, and location. Additionally, the specifics of your vehicle, such as its make, model, and value, will also impact your insurance premiums. Understanding these factors will enable you to make more informed decisions when comparing quotes.

Gather the Necessary Information

To compare quotes accurately, you'll need to provide certain information about yourself and your vehicle. This includes personal details such as your name, age, address, occupation, and driving licence number. You'll also need to provide information about your vehicle, including the year, make, model, and vehicle identification number (VIN). Having this information readily available will streamline the quote comparison process.

Utilize Comparison Websites and Tools

There are numerous comparison websites and tools available, such as Compare the Market, MoneySuperMarket, and NerdWallet, that allow you to compare quotes from multiple insurance providers simultaneously. These websites will ask for your details and then generate a list of quotes for you to review. Some insurance companies, like Progressive, also offer tools that allow you to compare their rates with those of their competitors.

Compare Coverage and Exclusions

When comparing quotes, it's essential to look beyond just the price. Take the time to review the coverage offered by each policy, including the liability limits, exclusions, and any additional benefits or add-ons. This will ensure that you're not only getting a good deal but also adequate protection. Remember to compare policies with similar coverage periods to get an accurate understanding of the costs.

Consider Independent Agents and Specialty Agencies

Independent agents can provide quotes from multiple companies, making it easier to compare options. They can offer a wide range of choices and help you find coverage that suits your unique needs. If you have a less-than-perfect driving record or are considered a high-risk driver, consider reaching out to specialty agencies. These agencies specialize in helping individuals with non-standard coverage needs, and they can assist you in finding affordable options.

Review Customer Reviews and Ratings

In addition to comparing prices and coverage, take the time to read reviews and ratings from other customers. This can give you valuable insights into the quality of service, claims handling, and overall satisfaction with different insurance providers. It's important to remember that the cheapest option may not always be the best, and choosing a company with a strong reputation can provide peace of mind.

Seek student discounts

It is a well-known fact that insuring a new driver can be expensive. However, there are ways to save on insurance for new drivers, and one of the most effective ways is to seek student discounts. Many insurance companies offer good student discounts for full-time students who can maintain good grades. For instance, Allstate offers a good student discount to unmarried drivers under 25 years of age who have at least a B- average. State Farm also offers a similar discount of up to 25% for students with good grades, up to age 25 or their last year of school. The State Farm Good Student Discount requires a 3.0+ GPA, a ranking in the top 20% of their class, or a place on the Dean's List/Honour Roll.

Home-schooled students may also qualify for good student discounts with other options, such as submitting evidence of having taken certain national standardized tests administered within the past 12 months and ranked in the upper 20%. Additionally, some companies offer discounts for students who complete a driver's training program. These discounts can vary, so it is important to compare car insurance providers.

Another way to save on insurance for students is to opt for usage-based insurance if the student drives a low number of miles each year. For example, Nationwide offers a pay-per-mile option through its SmartMiles program, which provides coverage with a premium that changes each month, depending on the number of miles driven. This option, however, is not available in all states.

If your student is away at college and does not have a vehicle, you could also qualify for savings via the away-at-school status. GEICO, for instance, offers this option if your child lives at college at least 100 miles away and does not have a vehicle.

Lastly, it is important to note that good student discounts may be nullified if the student has traffic offences on their record.

Add to an existing policy

Adding a new driver to an existing policy is a simple process, but it can lead to an increase in your premiums. However, there are ways to save money when adding a new driver to your insurance policy.

Firstly, it is important to understand when and why to add a new driver to your policy. You should add any licensed driver who lives in your household and has access to your vehicle to your insurance policy. This includes a new spouse, a partner who moves in, or teenage children who obtain their driver's license. You should also add college-aged children who drive your vehicle when they return home for the holidays. In most cases, you do not need to add a driver to your policy if they are just borrowing your car. However, if they are a regular driver of your car, you should add them to your policy to ensure that damages from accidents are covered.

In terms of saving money, one way to do this is to take advantage of any discounts that may be available. For example, many insurance companies offer a discount if you have a teenage driver or a good student listed on your policy. Additionally, some insurance carriers offer discounts for completing a defensive driving course. You may also be eligible for a discount if you are a member of an association, such as AAA, AARP, alumni associations, or military organizations.

Another way to save money when adding a new driver to your policy is to bundle your insurance policies. Many insurance companies offer incentives for providing them with more business. By bundling your car insurance with other policies, such as homeowners or rental insurance, within the same company, you may be able to save approximately 5-25% on your policies. Similarly, you can earn discounts by insuring more than one vehicle in the same household.

Finally, you can save money by increasing your deductible. This will lower your premium, but it's important to keep in mind that you will have to pay more if you get into an accident.

Raise your deductible

Raising your deductible is a great way to save money on your insurance costs. A deductible is the amount of money deducted when you file a claim under a policy. Essentially, it is the amount you agree to pay out of pocket for repairs to, or replacement of, your covered vehicle after an accident. The higher the deductible, the lower your monthly premium payments will be, as you are assuming more financial responsibility in the event of a claim.

For example, if you have a $500 deductible and you file a claim, you will need to pay the first $500 of the repairs. The insurance company will then cover the remaining costs. By raising your deductible, you can lower your monthly premium payments. However, it is important to consider that if you need to file a claim, you will pay more out-of-pocket expenses. Therefore, it is recommended to have the money saved to pay the difference between your repair bill and claim payout.

If you live in an area less prone to natural disasters or animal collisions, and you don't have a long commute or drive in an urban area, you may be less likely to file a claim, making a higher deductible a good option. Additionally, some insurers offer a "diminishing deductible" or "vanishing deductible", where your deductible decreases over time if you maintain a clean driving record.

Before switching to a high-deductible plan, it is important to research the various discounts available to you and assess your financial situation. You may also want to consider bundling your insurance policies to save money.

Frequently asked questions