A Few Tips for Saving Money on Car Insurance When You Have a Teen Driver

The other day I called our insurance company with a question about our policy. While I had the agent on the phone, I asked them to give me an idea of what our insurance rate would be once our oldest son starts driving (about a year from now). After asking me a few routine questions, she gave me the answer: $900…every six months. $1,800 per year! And, that’s with a discount for taking driver’s ed and a good student discount. To make matters worse, we have another son who will be driving 17 months after our oldest son starts. We could be looking at car insurance premiums about three times what we currently pay. OUCH!

After I got off the phone with our agent, I sent a message to a friend of mine who runs a local insurance agency. He and his wife have older kids too and I thought he’d be a good source for some tips. Here is what he sent me:

When you add a new driver to an existing car, you can expect the rate on that vehicle to increase by as much as 40 – 50%. If you add a new driver and a new car, you can expect that vehicle to cost around $600-$700 for coverage without comp and collision. With comp and collision, $1000+.

Most carriers have discounts for drivers that make good grades. They get a discount for drivers ed. The premium is usually lower for girls than boys (not much).

The premium drops some when they reach 21.

One thing I always suggest is for parents to find a car that’s safe and they can pay cash for. Don’t include comp and collision to keep the rate down. If Jr wrecks it, he’s on foot until he fixes it or earns the money for a replacement.

When you think about what not to get a kid….all the high powered sports cars. It’s not that the insurance co. won’t insure them—they will and collect large premiums to do so. But it’s just not smart sending a new driver out in a high powered car or truck.

Insurance companies check for tickets and accidents when given a reason to do so, i.e.. lots of accidents and claims. I suggest setting a higher deductible and not claiming small things that can be paid out of pocket. Of course if other parties are involved, that still won’t help. But if jr runs into your garage door, you may want to pay that yourself and “bank” your future claim for a time when you must make a claim.

Hope this helps.

Mike Roby Insurance (facebook)

Now, there are some things we could probably do to drop our rate a bit. I think the insurance representative ran the numbers with comprehensive and collision, which would have definitely increased the premium. I’ll learn more as my son gets closer to driving. He’s even going to be responsible for some of his premium. He’s also going to be driving our 2002 Buick Rendezvous. Won’t that be cool?

The bottom line is insuring a teen driver is expensive! What’s been your experience with having teen drivers? What things did you do to lower the premiums so that you didn’t have to eat bread and water during the teen driving years?

7 thoughts on “A Few Tips for Saving Money on Car Insurance When You Have a Teen Driver”

  1. I recently visited with my agent concerning the same thing! My daugher’s rates are anticipated to average about $100/month. That’s liability only, driver’s ed, the insurance company’s young driver program and good grades – that’s also assuming she doesn’t have a claim her first day on the road!

    She will be responsible for at least half of her premium. This has been discussed and she is preparing by saving money already. She has a “car” savings account that will allow her to cover maintenance expenses, repairs, insurance, gas, etc. She’s also been warned that driving is a priviledge. 😉

    Good luck and keep me posted! Your son is just a little older than my daughter.

  2. My oldest is finishing up DE right now and turns 16 in April. I’ll let you know our premium numbers when we become official!! (Unfortunately, he’ll be driving the new car–a Forester…This is the car that will be used for all 3 boys as they can’t drive Dad’s co car and I won’t let them touch my Sienna!

  3. I was lucky. My daughter didn’t want to get her driver’s license until she was 19, and had moved out by that time.

  4. My 18 year-old pays $78/month. He has the Good Student, Driver’s Ed, Safe Driving Program, Multi-Line, Multi-Car and my 10 years with no accident discounts.
    However it costs me nothing because HE has to pay for it. If you don’t have a job…you don’t need a car. If you don’t HAVE a job…you can’t AFFORD a car.

  5. Another nonsense statement is: “If you can’t afford insurance, you can’t afford to drive. This is complete nonsense. All you need is an older car and a few gallons of gasoline. Then the car will start and take you where you need to go.
    The reason so many cars are uninsured is because the greedy insurance companies are charging too much. They make BILLIONS of $ in profits every year by robbing everybody.
    If insurance was sold optionally by the CAR-MILE instead of only by the car-year it would be far less expensive for consumers, about 4 or 5 cents per mile. Since a teenager’s car would not be driven as much — in many cases — the insurance cost would be much smaller.
    Although the insurance companies don’t want you to know about any of this, look up milemeter.com and see how it’s done in Texas, and very successfully.

  6. It pays to shop around. I switched insurance carriers and dropped my rate by 33%. I also found that for my son and I, the cheapest rates were not with the relatively new insurance carriers or ones with hip lizards, but with good old Ma and Pa insurance. In my case, the three cheapest were AAA, Farmer’s, and State Farm. One of the most expensive was one that sounded internet savvy and prefixed “e-“.

    One of the things that does help to save money is to have a car that you don’t need collision and comprehensive on.

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