If you’re a parent with a teenager living under your roof, you’re probably well aware that auto insurance rates for teens are anything but cheap. On average, teens with their own policy pay more than $5,000 per year for insurance. Ouch! That’s why many teens opt to be added to their parents’ policy, even though it often means doubling the parents’ car insurance rate.
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If these prices make you wish your kid could just ride a bike everywhere, you’re not alone. But the reality is that you can’t keep your teen off the road forever. So, what can you do? Well, the best thing you can do is educate them about safe driving practices and find ways to save money on insuring their vehicle. And lucky for you, we can help with the latter!
1. Get Some Hands-On Experience
Did you know that car accidents are the leading cause of death for teens in the US? And guess what tops the list of causes for these accidents? Inexperience. That’s why it’s crucial for your teen to learn the rules of the road and get plenty of driving practice.
According to Brandon, one of Dave Ramsey’s trusted independent insurance agents in Montana, driver’s education can make a big difference. Many insurance providers offer discounts for completing driver’s education or other state-sanctioned safe driving courses. To find out which programs qualify for a discount in your area, simply ask your insurance provider.
2. Hit the Books
When parents encourage their kids to do well in school, it’s usually with college in mind. But did you know that your teen’s report card can also save you money on car insurance? Yep, it’s true!
Brandon suggests that having a B average or higher can make a difference in your insurance rates. The specific requirements may vary by state, so be sure to check with your insurance provider to see how your teen’s grades can help lower the cost of their policy.
3. Resist the Urge for a New Ride
You may have heard Dave Ramsey’s advice against buying new cars due to their rapid depreciation. Well, it turns out that purchasing a brand-new vehicle can also increase your insurance costs. New cars tend to have higher insurance premiums because the parts and technology needed for repairs are more expensive.
But that’s not the only reason to avoid giving your teenager the keys to a shiny new car. Brandon compares it to signing a loan with your broke cousin Joey for his latest business venture – not a good idea. Instead, Brandon suggests buying a used car with cash. Opt for a used vehicle known for its safety features to score some bonus points. In fact, choosing a five-year-old car instead of a new model can save you up to 18% on auto insurance. So, remember: the older the vehicle your teen drives, the lower the rates.
4. Keep Track of Your Driving Habits
Many insurance companies now offer extra discounts based on your driving behaviors rather than just your age and vehicle. Brandon explains that some insurers use devices that monitor things like daily mileage, harsh braking, rapid acceleration, and the time of day you drive. All of these factors can affect your risk profile and potentially lead to lower premiums.
To participate in these programs, simply connect a device to your vehicle and drive with it for 30 to 90 days. Some insurers offer a $25 discount just for trying it out, while others may reward super safe drivers with a 50% discount at the end of the trial period. It’s definitely worth considering!
5. Don’t Let Price Be the Sole Factor
Saving money is great, but your child’s safety and peace of mind shouldn’t have a price tag. The National Safety Council reports that half of all teens will be involved in a car accident before they graduate from high school. So, it’s crucial to have the right amount of liability insurance and other coverage to protect your teen.
That’s where an independent insurance agent comes in. Unlike captive or online agents, an independent agent will be there to guide you and your teen through the entire claim process. They provide personalized service and will fight for your teen’s best interests. Plus, working with an independent agent gives you access to multiple insurance providers, ensuring you find the best coverage at a price that fits your budget.
6. Work with an Independent Agent
Working with an independent agent can also save you money. Unlike agents who represent only one insurance provider, independent agents have access to a network of insurers. They can help you compare quotes and find the best coverage for your family without being limited to a single option.
If you’re in the market for auto insurance, look no further! Dave’s Insurance-Supported Local Providers (ELPs) are experts who have a proven track record of delivering excellent service. Many people who work with our recommended professionals find that they save hundreds of dollars on auto insurance or get better coverage for the same cost. So, take the first step and find your ELP today!