How to Get Cheap Car Insurance For Young Drivers

Why it costs more to insure teen drivers

The cost to insure teen drivers depends largely on whether or not they are added to your policy or on their own policy. For example, the average cost for an 18-year-old driver on their own policy is $5,335 a year for full coverage, which is more than triple the national average of $1,738 a year for full coverage for a 40-year-old driver. Having a teen added to your policy will be cheaper overall, in most cases.

The reason for the higher premiums is simple: teen drivers typically practice more at-risk driving behaviors. According to the CDC, a teen driver is riskier behind the wheel because they are:

  • Inexperienced
  • Not using seatbelts
  • More likely to drive distracted
  • Higher rates of alcohol use
  • More likely to speed
  • More likely to be involved in vehicle crashes at nights and on the weekends

Despite these numerous risk factors, it is still possible to save money and take advantage of discounts.

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Best Cheap Car Insurance for Teens FAQ

No. It’s usually cheaper to keep a teen driver on a parent’s policy. There are some cases where a separate auto insurance policy can be cheaper. For example, if a parent has a sports car on the policy, and the insurance company matches the teen driver with the costliest vehicle (some do), then the combination of the car and novice teen driver could push rates sky high.

For national averages, we found the cheapest rate for a family with a teen driver from American Family, Geico, Nationwide, State Farm and USAA. Our rankings also factor in complaints and collision repair scores.

You normally need to add a teen to your insurance when they get a driver’s license. Most insurance companies will cover the teen with your policy while they have a learner’s permit. So if they spend two years learning to drive with a permit—for example, from ages 16 to 18—you can enjoy those two years before high rates kick in.] However, some companies, like USAA, request that you add the teen as soon as they get their permit. With this in mind, don’t assume your teen with a permit is covered. Instead, ask your agent when the young driver must be added (during the permit stage or when fully licensed).

Getting car insurance after moving to the U.S

Immigrants and foreign nationals can be classified as new drivers when they first enter the U.S. This is because auto insurance companies usually check domestic driving records, so you can have a clean driving record in another country and still be considered an inexperienced driver after moving to the States.

Being an immigrant can make it harder to purchase car insurance. Many car insurance companies will reject applicants who don’t have valid driver’s licenses. Depending on where you live, you may still be able to get a license if you don’t have the proper government paperwork.

According to the National Conference of State Legislatures, the District of Columbia and the 16 states below allow undocumented immigrants to obtain a driver’s licenses if they can produce items like a foreign birth certificate, valid foreign passport or proof of residency in the state.

How to lower rates for teen drivers

There are several key ways that young drivers can lower the price of their auto insurance and save money.

The first is by qualifying for discounts, as most major insurers offer discounts young drivers can take advantage of.

Discount How you get it Good grades discountMaintaining good grades, usually at least a 3.0Safety course discountsTaking a defensive driving course approved by your insurerAway at school discountLetting your insurer know when a teen is at school and doesn’t have access to a carSafe driving discountAvoiding accidents and speeding tickets

You can also see if your insurer offers accident forgiveness at a reasonable price. It will cost more in the short term, but young drivers are prone to getting into accidents, and the savings will be significant if that happens.

Another significant way to reduce costs is by omitting coverages — such as collision insurance.

Collision insurance is costly for teen drivers because this demographic is statistically more likely to get into an accident and file an insurance claim than more experienced drivers.

It’s important to remember that if a teen driver is at fault in an accident without collision coverage, they will have to pay for repairs themselves. Unless your car is older and valued at only a few thousand dollars, we recommend you maintain collision insurance.

Accident Forgiveness

Accidents happen to even the best young drivers. And if one does occur, insurance rates may rise as much as 30%. If you have Nationwide’s Accident Forgiveness as part of your teen car insurance package, your rates will not increase following the first at-fault automobile accident.

Where to shop for teen driver car insurance

Knowing which carriers offer the best discounts for teen drivers while providing adequate coverage is critical. Comparing quotes is not only important, it also allows you to see equal coverage comparisons to make sure your teen has adequate insurance coverage at a competitive price. In addition, many insurance carriers will work with you to find the best insurance discounts for teen drivers.

Here are a few of the carriers Bankrate ranks the highest for teen drivers:

  • Geico: Geico stands out because of the youth-specific discounts offered for teen drivers, including good student and multi-policy discounts.
  • State Farm: State Farm also allows your teen driver to take advantage of a multitude of discounts geared towards their demographic, some of which will last through college.
  • Progressive: Progressive offers the Snapshot program, which is a telematic program designed to monitor teen driving habits, and reward them with lower teenage insurance premiums. For safer teen drivers, this can be advantageous.
  • Nationwide: Nationwide offers an array of discounts for teens, including a good student and distant discount, plus access to the Nationwide SmartRide program to monitor safe driving habits.

FAQs

Why is insurance for young drivers so expensive?

The truth is, young drivers are regarded as far more of a driving risk. They're less experienced, get into accidents at a higher rate, and are generally considered reckless — no matter how good of a driver they actually are. Insurance companies tend to take advantage of those assumptions.

How much does young driver insurance cost?

It depends! If you're working with the best insurance company, young driver insurance really doesn't have to be that expensive. However, you'll usually need a plethora of discounts and package deals for young drivers to ensure that you get the best rate. You can also shop around using the Jerry app to save!

Choose the right car and insurance policy

Your new driver may have their heart set on the car of their dreams, but it’s important to remember that a luxury car is likely going to cost you more in insurance. Your best bet when buying a teen’s first car is to find one that is safe and reliable, as this is often less of a risk on the road or your wallet.

However, if your teen does have a luxury vehicle, it may be cheaper for them to be on their own car insurance policy, since chances are the insurance premiums will be significantly higher than other cars within your policy. It may also make more sense for them to purchase their own policy if either parent has any DUIs or multiple moving violations, as adding a teen driver can make the current policy cost even more.

In most cases though, it’s generally cheaper to add your teenager to your household car insurance policy. While doing so will increase your insurance rates, your policy’s coverage and deductibles will also apply to your teen. You may also be able to save money by signing up for a multi-car insurance policy.

A higher auto insurance deductible may lower the rate, but could mean more out-of-pocket expenses after an accident. If the vehicle is older or has very high mileage, liability coverage may be a better option than collision or comprehensive – though it will not cover damages to the car after an at-fault accident. Getting the right coverage that best fits your needs is important for saving money on your teen auto policy. Learn more about Nationwide’s auto insurance coverage types today.

Frequently asked questions

Country Financial , a regional insurer, offers the cheapest overall rates we found for teen drivers, while State Farm had the lowest rates for national insurers. Auto-Owners had the lowest rates for parents with teens on their policies.

Teen drivers with their own policy pay an average of $4,917 per year. However, the increased cost of adding a teen to a parent’s plan is only $1,809 per year.

Insurers often provide discounts to teen drivers for getting good grades , taking an additional training course beyond basic driver’s education and being away at school, where you won’t be using your parents’ car much. Going on a parent’s or guardian’s policy can lower rates by more than 60%.

Our methodology

Because consumers rely on us to provide objective and accurate information, we created a comprehensive rating system to formulate our rankings of the best car insurance companies. We collected data on dozens of auto insurance providers to grade the companies on a wide range of ranking factors. The end result was an overall rating for each provider, with the insurers that scored the most points topping the list.

Here are the factors our ratings take into account:

  • Cost (30% of total score): Auto insurance rate estimates generated by Quadrant Information Services and discount opportunities were both taken into consideration.
  • Coverage (30% of total score): Companies that offer a variety of choices for insurance coverage are more likely to meet consumer needs.
  • Reputation (15% of total score): Our research team considered market share, ratings from industry experts and years in business when giving this score.
  • Availability (10% of total score): Auto insurance companies with greater state availability and few eligibility requirements scored highest in this category.
  • Customer Experience (15% of total score): This score is based on volume of complaints reported by the NAIC and customer satisfaction ratings reported by J.D. Power. We also considered the responsiveness, friendliness and helpfulness of each insurance company’s customer service team based on our own shopper analysis.

*Data accurate at time of publication.

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