Expert Insights To Help You Make Smarter Financial Decisions
ValuePenguin has curated an exclusive panel of professionals, spanning various areas of expertise, to help dissect difficult subjects and empower you to make smarter financial decisions.
The commentary provided by these industry experts represent their viewpoints and opinions alone.
Change The Way You Pay Your Insurance
If you can pay your policy in full, youll likely receive a discount. If you cant pay in full, see if you can get a discount by setting up electronic payment transfers for your monthly insurance bill. Also, some insurance companies offer a small discount for going paperless or even getting an online quote and buying a policy online.
Every little bit of savings can add up to the cheapest car insurance policy possible, so dont be shy about asking about discounts that can benefit your bottom line.
Review Your Insurance Coverage And Deductible
Review your current coverages and deductible levels.
Consider raising the deductibles on any full-coverage vehicles you own to help reduce your premium. And if you have an older vehicle, typically 10 years or older, you might consider dropping full coverage and just putting liability coverage on that vehicle, which can also save money, Mckenzie says.
This is only wise if your car is paid off or isnt worth much. And remember, your deductible is the amount youre responsible to pay in the event of a claim before your insurer starts kicking in funds.
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Who Is Considered A Young Driver For Car Insurance
Insurance companies consider a young driver to be anyone who is under 25 years old when rating for car insurance. So if you are between 16 and 24 and have a licence you will be rated as a young driver and pay more then older drivers. Getting Ontario car insurance quotes and in other parts of Canada will be higher for young drivers. Car insurance for new drivers to Canada can cost even more.
Save On Car Insurance By Completing A Young Driver Training Course
When a young driver completes a government-approved driving program, they can save anywhere from 10-25% on insurance premiums. Just provide your insurer with proof that you completed the course.
Learn & practice skills with a qualified instructor to build your confidence
When you take a driving course, you learn both practical in-car skills and in-class knowledge. You gain hours of training with a qualified teacher who is equipped with the most up-to-date knowledge on driving issues and challenges.
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Young Drivers Are Seen As Riskier To Insure
The cost of car insurance is mainly based on risk.
High-risk drivers are more likely to have an accident and need to make a claim. This costs insurance companies money.
So the riskier you are to insure, the more expensive your car insurance will be.
Unfortunately for young drivers, age plays a huge part in the perception of risk.
The average annual car insurance policy costs around 24.5% more in your 20s than in your 30s, and just under 50% more than in your 40s.
In the UK, young drivers – those aged 17-24 years old – are seen as the most risky. Young drivers make up around 7% of all UK licence holders.
Cost Of Insuring A Teen With A Camry Vs A Mustang
The type of car your teen drives will also impact the premium cost. For example, a vehicle thats rated high for safety can help lower the costs while an expensive, fast car might increase the costs. The type of vehicle is an important consideration when adding a teen and a second or third vehicle to your family policy. For reference, heres how that scenario might play out with two different cars:
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Add Teens To An Adults Policy
One of the best ways to reduce the cost of your teens policy is to add them to an adults insurance policy. When teens are added to the parents insurance policy, this gives the insurance agency more trust. Its kind of like getting a loan co-signed by somebody with better credit than you- youll get a better deal with a lower interest rate. The same applies to putting a teen on an adults policy. Theyll get better coverage for a lower monthly premium.
Usually, the teens’ biological parents or guardians are the best choices since they tend to be older than 30 and have already built up a solid credit profile, a good relationship with their insurer, and, hopefully, have a decent driving record as well.
The one downside to this is that the parents insurance policy will go up if their teen is involved in an accident. This means its critical for the parents to teach their teen safe driving practices and let them know the consequences of irresponsible driving.
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Compare Auto Insurance Quotes
Finally, the most surefire way to find affordable car insurance for teen drivers is to compare quotes . Unless you shop around a bit, youll never know whether or not theres a better deal out there. Many insurers also offer considerable discounts for drivers who are switching from another insurer, so keep that in mind.
Cheap Car Insurance With Good Reviews
Ideally, youll find cheap car insurance from a company with good customer service.
Most of the 10 companies in our analysis have complaint levels that are lower than the industry average. Complaint numbers from the National Association of Insurance Commissioners show a companys level of complaint relative to its size of business, with complaint numbers above 1.0 being higher than the industry average.
In Forbes Advisors ratings of the best car insurance companies, Geico, Nationwide, Travelers and USAA came out on top, when weighing rates, coverage options, complaints and collision claims.
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My Teen Driver Only Has A Learner’s Permit Do I Need To Add Them To My Car Insurance Policy
The answer to this question depends largely on the insurance requirements of your state as well as your insurance company. There are times where your policy would cover your young driver until they receive their drivers license, most states dont mandate that drivers with permits have insurance. However, all states except New Hampshire require that licensed drivers to carry insurance.
How To Get Cheap Car Insurance
Experienced married drivers can take full advantage of Atticas all-at-one-ones promotions, where they can save up to 25% on car insurance premiums, resulting in car insurance premiums that are 4-5% lower than the average comprehensive plan for sedan drivers. Etica offers comprehensive coverage including personal accident and medical coverage, towing expenses and loss of utility benefits . You can secure your sun/moon roof or sunshade for an additional fee.
This program is best for older, experienced drivers for a few reasons. First, the Etika is worth more than S$2,000 for the young/inexperienced driver. Additionally, its premiums are not competitive with low or no claim discounts or young drivers. Finally, it may not be ideal for drivers who are inexperienced on Singapores dangerous roads, as there is no accident protection for your passengers.
If you want to take full advantage of Atticas promotions, try buying Atticas insurance on Fridays as there is an extra 5% off every Friday. Safe drivers benefit from an additional 5% demerit discount, giving you more wiggle room to add valuable add-ons.
If you want a more comprehensive and generous car insurance plan, we found that insurers offer the best coverage for sedans. These insurers offer high-end plans that focus on providing the best coverage with many unique benefits and features.
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Car Insurance For Young Drivers
Weve said it once and well say it again, insurance isnt a one size fits all kind of thing your cover, and the cost of your cover will depend on your circumstances. Dont assume that a full annual policy on a car you own is your only option cover on a parent’s car, or temporary car insurance may suit you better.
There are so many different options to get you cheap insurance – its all about finding the right policy for you. Using our handy product finder tools is the quickest and easiest way to save you money on your insurance.
Avoid Tickets & Trouble
Car insurance rates often decrease as a young driver builds a good driving record by avoiding accidents, tickets, and penalties. For new drivers, completing driver’s education and the state’s Graduated Driver Licensing Program are two of the best ways to develop safe driving skills. Every state has a three-stage Graduated Driver Licensing program that allows young drivers to gain driving skills in a safe, supervised way. Since GDL programs have been shown to reduce risk, they could also lead to lower rates on car insurance for teens.
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Best Car Insurance For Young Adult Drivers
Bankrates research revealed that Auto-Owners, Geico, Nationwide, Progressive and State Farm are among the best car insurance companies for young adults. We started our analysis by analyzing average premium data from Quadrant Information Services. Knowing that car insurance rates are increasing in 2022, we focused on finding companies with low average rates for young drivers. We also took coverage options, young driver-specific discounts, policy features and third-party ratings into consideration to help you find a carrier that offers affordable rates and adequate coverage.
Remember that your rate may depend on factors such as if you are on a parents policy, are married, own a home or rent. To determine the average cost of car insurance for young adults across the U.S., Bankrate analyzed data for adding drivers to their parents policy and drivers on their own policy.
Collision And Comprehensive Insurance
Collision and comprehensive insurance are not required by state laws but usually mandated by financing companies if you have a car loan or lease. This coverage is often a good idea unless you drive a car of little value. They are two separate coverage types often sold together. The limit for either coverage type is the value of your totaled car at the time of the incident.
- Collision insurance pays for your vehicles repairs if your car is hit by another vehicleregardless of fault. It also can pay out if you accidentally hit something, such as a pole.
- Comprehensive insurance pays out if your car is stolen or damaged due to issues, such as vandalism, fire, falling objects, severe weather or striking an animal.
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Ask For Student Discounts
If you are someone who is still in high school or college or were recently a part of one then you may get a students discount. According to Policy Genius, most insurers offer student discounts.
Even though cheap car insurance for young drivers is hard to come by, with a student id you may be able to get a good enough deal.
Compare Quotes To Get Cheap Car Insurance For Young Drivers
When searching for an insurance company, it is advised to get quotes from at least three companies. It will pay off in the long run. Lets consider an example. So, you get a quote for comprehensive auto insurance for say $1,700 per year, from a particular company. Now, when you compare this price, you may find a quote that provides similar coverage at a much cheaper price.
People should always compare prices and check if a business has been financially stable before purchasing its service.
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Cheapest Car Insurance Company For Teen Drivers
The cheapest widely available auto insurance for teen drivers is offered by State Farm.
A State Farm policy for an 18-year-old costs an average of $3,518 per year, which is 29% cheaper than the national average of $4,917.
Although they aren’t an option for everyone, Country Financial, Erie and USAA are the cheapest insurers overall. Erie is only available in 12 states and Washington, D.C., while Country Financial is in 19 states. USAA only offers policies to current and former military members.
Find Cheap Auto Insurance Quotes in Your Area
Teen drivers are almost always charged considerably more because they are less experienced behind the wheel and more prone to risky behavior. A teen driver pays more than three times as much as a 50-year-old for full coverage.
Cheapest Car Insurance Companies
- Good average auto insurance rates for drivers with a DUI on their records compared to top competitors.
- Reasonable rates for good drivers and those with speeding ticket or accident on their records.
- Offers accident forgiveness and also minor violation forgiveness.
- Has a very low level of complaints made about its auto insurance to state insurance departments.
- Offers a usage-based insurance program , which may help safe drivers get cheap car insurance.
- Rates are on the high side for adding a teen driver to a policy.
- Offers rideshare insurance, but only in a couple of states.
- Travelers bundling discount for buying both auto and home insurance is on the low end at only 10%.
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Final Thoughts On How To Get Cheap Insurance For Young Drivers
Taking the time to pursue any of the previously mentioned measures is worth it, the pros agree.
Because young drivers are so expensive to insure, even a small percentage difference in premiums or deductibles can easily mean hundreds of dollars in savings over the course of a year, Michael advises.
Zhou echoes those thoughts.
Most insurers have flexible car insurance policies wherein you can customize the coverage based on what you only need and can afford, he says.
Moss points out that COVID-19 and inflation have altered the auto insurance market dramatically over the last few years.
Prices have shifted and carriers are carefully selecting what risk profiles they want to write. So if you dont shop the market, the odds are very low you will find the best price and policy for you and your young driver, Moss says.
Finally, remember that theres no getting around an indisputable fact.
The younger you are as a driver, the higher the chances are that your policy will cost more, Schrader says.
Shop Deductible Levels High Or Low
While you have your insurance agents ear, also ask about the effect of various deductible levels on the cost of your car insurance premiums. . Your deductible is the amount of money youll pay out of pocket before your insurer bankrolls the rest of your covered claim. If you have a $500 deductible and your young driver causes $2,000 in damages, youll pay your deductible amount, and then your insurer will pay the remaining $1,500.
When you raise your deductible, the result is that your insurer will pay less for a covered claim. For that reason, the higher your deductible, the lower the cost of coverage. Ask your agent to run the numbers and show you rates at various deductible levels. Just remember not to accept such a high deductible that youd be unable to pay that amount out of pocket.
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Get The Best Car Insurance Quotes Today
Everything from your credit score to your cars safety features can impact your car insurance rates. But if youre looking for cheap car insurance coverage for a teen or young driver, these 10 makes and models should be on the top of your list.
Keep in mind that the cheapest car insurance isnt necessarily the best car insurance for you. Be prepared to pay more for full coverage or collision coverage if you want more than the minimum protection required in your state. Educate yourself about how new driver car insurance works and which companies offer the best rates.
Compare.com makes it easy to find coverage with our comparison tool that shows you the best rates side-by-side. Simply enter your ZIP code below to get started:
Compare Insurance Rates for Young Drivers
Nick Versaw