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car crash

9 Effective Tips to Save on Car Insurance for Teenagers

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car crash

Car insurance for teenagers can cost as much as five times more than the rates for adults. This is because of the greater driving risk involved in teenagers evidenced by greater number of accidents and higher number of serious injuries and fatalities compared to adult drivers.

In order to lower actual rates and maximize your teen’s auto insurance coverage, you can give your teen a simpler or older car; let your teen keep a good driving record; let him keep a clean insurance record; enroll him to a driver safety education; get your teen a safer car; let him maintain good academic grades; keep the mileage low; keep the car safe; and apply for multiple policies with your insurance company. To help you save on auto insurance costs for your teenager, here are proven tips you can consider:

Give your teen a simpler or older car

A brand new sports car would make a very nice birthday gift for your beloved teen, but if you want to save to insurance costs, this would not be a smart move. Remember that one of the factors that make up an expensive car insurance would be a brand new car because of its high book value. A sports car would also be expensive to insure with its higher horsepower compared to a four-door sedan. With a stronger car, your teen would tend to drive faster, making it more prone to accidents and damages. If you are giving your teen an older car model, you can also save by dropping collision coverage.

Let your teen keep a good driving record

If this is not your first year in getting your teen a car insurance and he or she had a good driving record, you can ask for a discount from your insurance provider. Most auto insurance companies give discounts to drivers who have not been issued a ticket or those who have not been involved in any accident since they have been driving. Remind your teen that it always pays to be a good driver.

Let him keep a clean insurance record

Aside from having a good driving record, insurance costs may also be lowered if your teen keeps a clean insurance record. It is advisable for him to keep from claiming for very minor car damages from insurance companies in order to avail of discounts.

Enroll him to a driver safety education

Some states require teenagers to get driving lessons first before he gets a driver’s license. Aside from this condition, the cost of getting a car insurance quote for teenagers may also be reduced if your teen had been enrolled to a driving course before driving his own car, most especially if he had good grades. The insurance company would most likely give discounts to responsible student drivers who have had lessons to safe driving than to those who have not.

Get your teen a safer car

Just like in applying auto insurance for adult-driven cars, discounts also apply to teenager-driven cars with safety features. Airbags, anti-lock brake systems, and alarm systems can help lower the insurance cost of your teen’s auto insurance as they reduce risk for injuries as well as theft and damages.

Let him maintain good academic grades

Yes, indeed. If your teen proves to have good grades in school, most especially if he is in the honor roll, you can avail of the good student discount. Most insurance companies offer this incentive to responsible students who are most likely more sensible and responsible too when it comes to driving.

Keep the mileage low

When you ask for auto insurance quotations, companies do ask for estimated mileage your teen has to travel from residence to destination, as well as estimated annual mileage. As much as possible, advice your teen to keep his mileage low and use the car only when needed. Do not encourage weekend road trips and the like. Higher mileage leads to higher risk of meeting accidents, thus resulting to higher insurance cost.

Keep the car safe

Another very important determining factor for insurance premium is the place where your teen brings and parks his car. Insurance companies will be asking where the car will usually be brought and parked. Is the school parking safe? Are the places he goes safe enough, too or are there many reported cases of car thefts and damages? If at home, does he park his car in a covered garage or just outside the apartment? Of course, the more risky the situation, the higher the insurance cost.

Apply for multiple policies with your insurance company

If your teen’s insurance provider with other concerns, such as life or home insurance, also covers car insurance and you get a policy from them, you may be given a discount on your auto insurance for your devotion to their company. Alternately, you can also apply for the whole family’s car insurance policies in one insurance company and be granted of discounts for each of your plan. Do not hesitate to ask your insurer about these discounts to save bucks.

Other discounts you may avail of with your teen’s car insurance include loyalty discount, if you have been with your insurance company for a certain number of years, as well as multiple car discount, when you enroll more than one car for your teen.

photo Some rights reserved by johntrainor

7 things you don’t want to skimp on

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You don’t always want to save as much as you possibly can on everything. I can think of at least a few examples where spending the least amount possible is not always a great idea:

Education.

I am a huge proponent of public education for two reasons: 1, the involvement with your community, both for parent and child, is going to happen somewhere - there is no sense in insulating yourselves from it; 2, you’ve already paid for it (through taxes). That having been said, education - particularly college - is not a good candidate for finding the cheapest option simply because it’s cheapest. That might seem to contradict some of my earlier pieces. But I don’t think it really does - I simply think that far too many people choose the most expensive college just because it’s the most expensive, and that’s wrong, too. At every level you need to find options that are good for you and that really address your goals.

Health care.

This one is tough. Of course you don’t want to overspend, but I can tell you that when you are seriously ill, most - not all, most - thoughts about money go right out the window. Of course in the case of lingering illnesses, such as happened in my family this summer, you still have to worry about the person’s family’s future - will the cost of health care be too much to allow them to keep a house, for example? And it’s a sad state in this country that we have to worry about the cost of wellcare. But in general, when you are really sick or injured, you don’t stop the hospital from doing procedure X because it costs too much. The hospital or insurance company may stop it, though.

Cars and related expenses.

When you read people suggesting ways to save money on cars, I always think “this is a metal box that you get in and drive around in at 60 miles per hour - do you really want the cheapest car you can get?” I want the safest car, with reasonable mileage that keeps it from being an outright assault on the environment. I’ll pay a bit extra for the good tires, even though I could get reconditioned ones cheaper. Then again, I still drive a 2001 Pontiac Grand Prix.

Insurance.

If you live in a flood zone, you can save some money by skimping on the flood insurance. When the flood comes, though, if your insurance isn’t enough to rebuild your place or buy a new one, why did you bother? What was the point of saving that money if you can’t use the insurance when you need it? Make sure you’re insured against financial catastrophe. Life insurance is important. Having a $100 deductible on your auto isn’t.

Babyproofing equipment.

I think the choice here is clear. If you want to skimp on gates at the top of the stairs for your child, then I don’t think you have your priorities straight.

Food.

This one may be a little more contentious, but I think trying to save money on certain types of food is ridiculous. If you eat meat, try this experiment. Go buy some heavily processed, dyed, factory-farm raised chicken, and buy some organic free range chicken. Prepare them both the same way, but don’t overdo the breading, herbs, spices, whatever - keep it simple. Try both of them. Tell me which one was a better use of money. If you aren’t a meat eater, try buying organic, locally produced tomatoes and then buy a Mexican imported tomato from the supermarket. In both cases, the more expensive option is likely to taste far better, therefore it satisfies you better meaning you’ll eat less, enjoy it more and be less tempted to let it sit in the fridge until it goes bad. It’s probably healthier, too, but I won’t even use that argument.

This one is the tough one - making money.

If you are starting a business or investing, you don’t necessarily want the cheapest possible option. Undeveloped property 80 feet from the road with no plumbing or electricity in Montana might be cheap, but that doesn’t mean it’s a good investment. If you are starting up a restaurant, you don’t want to serve the cheapest possible food.

I guess the purpose of these examples is to show that sometimes the mania for frugality and savings isn’t always the best idea. Saving money can’t always be solely about retiring or financial freedom. Between now and then there is a life to be lived, and lived safely and comfortably.