Becoming a young adult and striking out on your own brings with it many new responsibilities, including figuring out your own auto insurance policy. That usually means finding the cheapest auto insurance for teens.
If you’ve been on your parents’ policy and they haven’t filled you in, this will be when you find out just how pricey it is to get auto insurance for teens. It will be expensive, but there are steps you can take to minimize the financial pain. Here’s a rundown.
1. Cheapest auto insurance for teens? Shop around
It might seem quickest and easiest to go with the same insurance company your parents use. After all, it’s good enough for them. You might even be familiar with that company if you’ve been on your parents’ policy. But that could be a mistake.
Auto insurance prices can vary widely among companies.
Your parents may not have comparison shopped in a while, or ever, to ensure they’re getting the best deal. Furthermore, what’s be best for them might not be for you, because your task is finding the cheapest auto insurance for teens. Each auto insurance company has a different method for determining auto insurance rates, including your age, gender, driving record, occupation, credit history and marital status, where you live, whether you own a home, what kind of vehicle you drive, what you use your car for, how much you drive and how much coverage you want.
ALSO: 6 Tips for Keeping Your Teen Driver Safe
And don’t believe insurance commercials that promise to save you money. No one company is cheapest for all people in all places. That's why finding the chepest auto insurance for teens will save you money. Of course, it’s easier than ever these days to get auto insurance quotes from many companies, so you can make an informed decision.
2. Get the right and cheapest auto coverage for teens
Just as you shouldn't use your parents’ insurance company without comparison shopping, don’t just opt for their coverage levels. There’s no one right amount of coverage to suit every person’s needs.
People who have more money and assets that could be lost in a lawsuit after an accident, for instance, need higher liability coverage levels than people who are just starting their professional lives.
People who own pricier cars have a greater need for and potential benefit from comprehensive and collision coverage than those driving older, cheaper cars. That’s because comprehensive and collision, which protect against damage from accidents and other hazards, plus theft, will never pay out more than the current value of your car.
3. Raise your insurance deductibles
If you decide you want comprehensive and collision coverage, you could consider raising your deductibles for these coverages. This would leave you paying more after an accident, other damage or theft, but would save you money on your monthly insurance bill. Finding the cheapest auto insurance for teens means looking at the total potential costs, including deductibles.
4. Consider what auto coverage you don't need
Some coverage extras might be useful, but can be jettisoned when you’re trying to save money on your auto insurance. For instance, you might be able to go without rental car reimbursement and roadside assistance.
5. Choose the right auto to insure
Several vehicle factors play into auto insurance rates, including a car’s record of accidents, injuries and thefts. So buying a car with a better safety rating and record can save you money, and could also save your life. Having a car that’s less likely to be stolen is a good thing as well.
Some insurers provide discounts for safety features and anti-theft devices, which is just one hint when finding the cheapeast auto insurance fo rteens. Allstate, for instance, provides a discount of up to 30 percent for passive restraints like airbags and motorized seatbelts, and 10 percent for antilock brakes.
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Geico will discount rates up to 25 percent on injury coverage for driver-side airbags or 40 percent for full-frontal airbags, 5 percent on collision coverage for antilock brakes and 1 percent on some coverages for daytime running lights. An anti-theft system could save you 10 percent with Allstate and 25 percent on your comprehensive coverage with Geico.
Many of the safest cars are newer, bigger vehicles, which also tend to cost more. That’s a factor that could play against insurance savings. Pricier cars generally cost more for comprehensive and collision coverage, because insurers have to pay more to replace them if they’re totaled.
6. Take a driver training course
Driver safety courses can make you a better, safer driver, while also saving you money on car insurance. Contact your insurance company to find out how much of a discount you can get and which courses qualify.
7. Get good grades
Most insurers provide a discount for good students, making grades a factor when finding the cheapest auto insurance for teens. Generally, teens need to maintain at least a “B” average, or achieve an academic distinction, such as making the dean’s list.
8. Sign up for usage-based insurance
Think you’re safer than the average young driver? If so, then usage-based insurance might save you money. These policies use devices installed in cars to monitor how much you drive, and when and how you drive. They then provide discounts for driving less, not driving late at night and avoiding dangerous behaviors such as speeding, aggressive acceleration and hard braking.
These steps can help minimize your auto insurance bill. Longer term, your rates will go down with age, assuming you maintain a good driving record. So that’s another reason to be careful out there on the roads.