Jessica Sautter is a Content Writer for CarInsuranceCompanies.com with a Bachelor’s Degree from Eastern Michigan University in Elementary Education with a Major in Reading and a Minor in Mathematics.

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Chris Harrigan has an economic degree from Limestone College and an MBA from Clemson University. He previously managed auto insurance claims for Enterprise Rent-A-Car. Currently, he is using his business and insurance expertise to provide insurance data analysis and visualizations to enhance the user experience.

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Reviewed by Chris Harrigan
Former Auto Insurance Claims Manager

UPDATED: Oct 18, 2020

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Key takeaways...

  • Teen drivers are considered to be in a high-risk category and have higher insurance rates as a result
  • Factors like good grades, the car they drive, and taking driver’s ed or a graduated license program usually indicate a teen driver’s safety on the road and can decrease their insurance rates
  • Parents can lower their insurance cost after adding a teen driver by raising their deductible, bundling policies, and shopping for better auto insurance quotes

Any parent of a teen driver can tell you that insurance for teens is not cheap. Fortunately, there are a few things you can do to keep the costs as low as possible.

Insurance premiums for young adult drivers, ages 16 through 25, are higher than for any other age group. Keep reading for a few tips to help lower car insurance costs for teenagers.

If you’re looking for better and more affordable auto insurance, enter your ZIP code above and compare at least three to four policies today!

Table of Contents

Good Grades

One of the best things teens can do to help keep their insurance costs down will also help get them into college. Most insurance companies give high school and college-aged drivers a nice discount if they keep their grades above a certain level.

For most companies, good grades are all As and Bs, or a 3.0 GPA. This expectation might vary some by company so be sure and ask your insurance agent what the requirements are for your insurance provider.

Studies have shown a correlation between young drivers who have high grades and lower risk behavior on the roads, so students with good grades are considered to be lower risk than other drivers their age.

Once the young person has gone a few years without an accident or a ticket, they might also qualify for a good driver discount. Usually, this qualification requires a clean driving record of at least three years, and sometimes five, especially for accidents.

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The Right Car

The car that the teenager drives most of the time will have a significant impact on the price of their insurance. So choosing the right car is essential.

The least-expensive option is for the teen to be added as an extra driver onto their parents’ cars.

Because they won’t have a car of their own, and someone else is the primary driver of the family’s cars, this reduces the risk that the teenager will be in an accident or receive a ticket. Thus, their premium will be lower.

For those who get their teen a car, keep in mind that the kind of car you get them can cause a difference of hundreds of dollars just in insurance.

Because teen drivers are at higher risk for accidents, getting the teen an expensive car, especially a brand-new one, is going to be very expensive in insurance.

Because the car will cost so much to replace — and there is a greater risk that the insurance company will have to do that with a teen driver — the premium will cost more.

Certain types of cars are more expensive for anyone to insure. For example, sports cars are more expensive than sedans, SUVs, or trucks when it comes to insurance.

A little-known fact about insurance is that almost every two-door car is classified as a sports car or sports coupe for insurance purposes. Add a teen driver to the mix, and you have one huge insurance bill.

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So if you want to get your teen a car but also keep costs down, look for vehicles that are cheaper to insure. Four-door sedans and some trucks and SUVs would be a good example.

Before buying a car, call your insurance company and ask how much adding a certain type of car would drive up your insurance.

You can make this call with no obligation. You don’t even have to have a specific car in mind or have a VIN to supply. You can just give a vehicle’s year, make, and model, and your insurance company can give you a reasonably accurate quote.

Even in used cars, look for safety features that will save you even more money. If the vehicle has particular safety features, like airbags or anti-lock brakes, you can usually get an even larger discount.

The same goes for anti-theft devices, like electronic vehicle locator or engine immobilizer.

Education

If you live in a state where an 18-year-old can get a driver’s license without taking a driver’s education course, don’t do it. Have the teen take the course. Insurance companies charge far more for teens who have not had an education course than for those who have.

Some states allow parents to teach driver’s education to their own kids. Teaching your kids to drive is often less expensive than paying a private company to do so if you are willing to commit and take the time to teach your child to drive.

If your teen has already taken a driver’s education course, whether it was required or not, look into a driver’s safety course designed just for teens.

Similar to a defensive driving course you might take to have a ticket dismissed, these courses are designed to help further equip teens for the situations they will face as drivers.

Many insurance companies will give discounts for teens that complete these courses. In fact, some insurance companies have their own programs for teens, says the Insurance Information Institute. Ask your insurance company how much such a class might save you on your insurance.

Why Teenager Insurance Is So High

Of course, you might be wondering why insurance for teens is so high to begin with. After all, they don’t have a driving record to look at yet.

Nevertheless, when parents add a teen driver to their insurance, they will usually see a 50 percent to 100 percent jump in premiums for girls and up to 150 percent for boys.

Insurance companies classify their customers into groups. They group them by age, gender, location, and other factors. Even though your teen might not have received a ticket or caused an accident yet, many teens do.

According to the California Department of Motor Vehicles, teen drivers age 19 and under are in more accidents than any other age group and also receive twice as many tickets as all other age groups combined.

Because of this statistic, insurance companies group all teen drivers in the same high-risk category. That’s why it’s important to do anything you can to lower the cost of coverage.

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Graduated License

https://www.youtube.com/watch?v=vLVYXD5lEiE

Many states have instituted a program called a graduated license. This program gradually gives teens more driving privileges as they get older and gain more experience as drivers.

In the first stage, teens get a learner’s permit, or provisional license, that allows them to drive if there is a licensed driver 21 or older in the front seat.

They must have a learner’s permit for a period of six to nine months, depending on the state, before they can get a license to drive without the licensed driver in the front seat.

However, under a graduated licensing program, the teen still won’t have full driving privileges. They are not allowed to have more than one non-family member in the car at a time, to minimize distractions.

They are also usually restricted to when they can drive. In other words, they can’t drive after a certain time at night or before a certain time in the day.

Then, usually at age 18, they can get a full license without any restrictions.

In states with strong graduated licensing programs, there has been a substantial drop in the number of fatal crashes among teens — according to the NHTSA, these drops have been from 20 percent to 50 percent.

The Insurance Institute for Highway Safety also goes on to encourage parents in states without this program to make it the law in their own households.

This house rule not only could help keep your teen safe on the roads, but it could also lead to lower insurance costs as the teen proves to be a safe driver.

Things Parents Can Do

There are also some things that parents of teen drivers can do to help keep costs down. If you have comprehensive and collision on the vehicles on the policy, raise the deductibles to $1,000.

Raising your deductible can save as much as 40 percent on the comprehensive and collision premiums, which in turn can help offset some of the increase in insurance costs that comes from adding a teen driver.

You can also check to make sure you are taking advantage of all the discounts available to you. If you don’t have your homeowner’s and car insurance from the same company, you’re probably missing out on a major discount.

Companies will give you a discount on both policies when you buy them both together from the company.

Also, don’t assume the company you’ve been with will be the best deal now that you’ve added a teen driver to the family.

Insurance companies all figure their costs and look at risks a bit differently, which can result in a large difference between the premiums from different companies. So it pays to get several quotes from different insurance companies.

Be sure to get a quote for the homeowner’s insurance at the same time so you can get a full picture of how much you would have to pay for insurance.

The way you pay your bill can also help keep premiums lower. Things like paying your premium in full and setting up automatic electronic payments can also reduce your premium.

Looking to reduce your auto insurance costs? Enter your ZIP code below and start comparison shopping today for cheaper and better auto insurance!