What is the Cost To Insure a Teen Driver?
Hint: A lot.
The joy that a teen driver feels when they get their license is matched by the angst a parent (or teen depending on who is paying) has regarding their new auto insurance premiums. My parents took the easy way out and said no one other than dad and mom could drive the company car (so I became a cyclist).
Back to the question. This study found that adding a teen to a family auto policy can increase rates by (drumroll please)….double:
“Adding a teenage driver to the family car insurance policy can double annual premiums, according to a new study—a costly fact of life that reflects the higher risk for younger drivers.”
So, what’s a teen to do when their parents put up the “it costs too much objection?” Find ways to save their parents’ money. Here is a chart from that same study which identifies discounts available at the various insurers:
Here are some ideas on how to save money on auto insurance that your students may want to share with their parents/guardians:
- Get good grades
- Enroll in a safe driving course
- Be aware of distant student discounts which allow parents to take you off their plan if you are going to college a certain distance (typically, 100 miles away).
- Drive an older car
- Use technology offered by insurers to monitor driving activity
About the Author
Tim's saving habits started at seven when a neighbor with a broken hip gave him a dog walking job. Her recovery, which took almost a year, resulted in Tim getting to know the bank tellers quite well (and accumulating a savings account balance of over $300!). His recent entrepreneurial adventures have included driving a shredding truck, analyzing executive compensation packages for Fortune 500 companies and helping families make better college financing decisions. After volunteering in 2010 to create and teach a personal finance program at Eastside College Prep in East Palo Alto, Tim saw firsthand the impact of an engaging and activity-based curriculum, which inspired him to start a new non-profit, Next Gen Personal Finance.