If you're concerned that your auto insurance is going to go through the roof once you add your teenager to the policy, you have good reason to be. Studies show that insurance premiums can go up by about 80%, depending on which state you live in. That's an increase that can take a bite out of just about any monthly budget. Luckily, there are some steps you can take to reduce the cost to insure your teenage driver. Take a look at these cost-saving suggestions.
Reward Those Good Grades
If your teenager is already getting good grades in school, it's time to reward them. Many insurance companies will offer a discount on auto insurance for students who maintain good grades. If your teenager doesn't currently have good grades, encourage them to bring their grades up before they begin driving. The improved grades will benefit both of you.
Enroll Them in a Safe-Drivers Class
When it comes to your teenager driving, you want to save as much money on their insurance as you can, and you want them to be safe. To get both, make sure you enroll your teen in a safe-drivers class. These courses go beyond what is typically taught in traditional driver's training courses – which teach basic laws and driving practices. Safe-driver's classes – or defensive driving courses – teach teenagers how to react safely to different types of situations that they might encounter while driving. Most insurance companies provide discounts for students who successfully complete these courses.
Choose Their First Car Wisely
If you're going to be purchasing a car for your teenage driver, make sure you choose wisely. Your teenager might want a car that looks good, or has faster acceleration. However, that might not be the safest – or most economical – option. Before choosing a car for your teenager, talk to your insurance agent about options that will be the most economical to insure, and have the highest safety ratings.
Go for a Trade-Off
When it was just you on your insurance policy, you could keep your deductible down, and your premiums at an affordable rate. Now that you're adding your teenager to the policy, you might want to consider using your low deductible as a starting point for negotiating a lower premium. Talk to your agent about increasing the amount of your deductible, which will lower the overall cost of your premium. The savings might be enough to offset the increase caused by adding your teenager.