As a parent, one of the most expensive questions you’re likely to hear from a teenager is, “Can I get my learner’s permit?” While it’s an exciting milestone for your teen, it’s also a moment that can have a significant impact on your finances. One of the biggest new costs? Adding a teen to your car insurance policy.
But here’s the good news: adding a teenager to your car insurance might not be as costly as you think—especially if you know how to navigate the process. Let’s dive into how you can add your teen to your car insurance without sending your premiums through the roof.
The Basics of Adding a Teen to Car Insurance
When you add a teen to car insurance, it’s natural to worry about the cost. After all, teens are considered higher risk drivers due to their inexperience behind the wheel. But here’s the catch: adding a teen with a learner’s permit won’t automatically raise your rates in many states. In fact, most insurance companies will allow you to add a teen with a learner’s permit to your existing policy at no extra cost.
This is because, in many states, a teen driver must be accompanied by a licensed adult (typically over the age of 21) during their learner’s permit phase. This helps reduce the likelihood of risky driving behaviors, which means insurers aren’t as concerned about their level of risk.
5 Ways to Save on Teen Car Insurance
Once your teen is licensed, though, it’s a different story. Premiums can go up significantly, but there are several strategies to keep costs under control when adding a teen to your car insurance policy.
1. Register the Car in Your Name
One way to save on teen car insurance is by registering your teen’s vehicle under your name, rather than theirs. If a teen owns the car, they’ll need their own separate insurance policy. But if the car is under your name, adding them as a listed driver on your policy spreads the risk across your entire family, which can result in lower premiums.
2. Reward Good Grades With Lower Rates
Here’s a tip that doubles as an incentive for your teen to work harder in school: many insurance companies offer discounts for good grades. If your teen maintains a B average or higher, they could qualify for a discount on your insurance. Just be sure to have your teen’s report card handy when speaking to your insurance agent, as they’ll likely want to verify the grades.
3. Encourage Your Teen to Wait Before Getting Their License
It may sound counterintuitive, but delaying your teen’s driver’s license until they’re older can actually save you money. Insurance premiums for 19-year-olds are often up to 8% lower than those for 16-year-olds. While getting your teen to wait a few extra years might not be easy, it could save you a good chunk of change in the long run.
4. Enroll Your Teen in a Driver’s Education Course
Teaching your teen how to drive is an important responsibility, but even the most experienced parents might pass on some less-than-ideal habits. That’s where an accredited driver’s education course can come in handy. Not only will your teen learn the ins and outs of safe driving from certified instructors, but many insurers offer discounts for teens who complete these courses. It’s a win-win situation.
5. Choose a Safe, Affordable Car for Your Teen
Let’s paint a picture: Your teen has just passed their driving test and is ready to hit the road. They come to you and say, “I want a new BMW M2!” Now, how likely are you to get a low rate on that car with your teen behind the wheel? Not very likely at all. Sports cars are high-risk vehicles for young drivers, and your premiums are likely to skyrocket.
Instead, consider getting them a safe, economical car with a lower horsepower. These vehicles are less expensive to repair, often come with excellent safety features, and are generally less risky to insure. By opting for a safe, affordable car, you can help keep your teen’s car insurance premiums lower.
In Summary
Adding a teenager to your car insurance policy can be expensive, but with the right strategies, you can minimize the financial impact. By registering their car in your name, rewarding good grades, encouraging them to wait a few years before getting licensed, enrolling them in a driver’s ed course, and selecting a safe vehicle, you can keep your premiums manageable.
Remember to shop around for the best rates, and don’t forget to compare coverage levels and deductibles to make sure you’re getting the best deal for your family.
