Top 10 Car Insurance Tips For New Drivers In 2024

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Updated: 29 January 2024
Written by
Doug Schaffer
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While it’s an exciting time when you can finally get your teenager a car, it can also be a serious hit to your budget.

On top of this, it can lead to high levels of anxiety in parents. Teenagers are twice as likely to be involved in a fatal car accident than adults, according to the NHTSA.

This is part of the reason why car insurance costs are so high for teenage drivers. The good news is that, generally, auto insurance premiums are highest for 16 year olds, and then costs go gradually down as your teenagers get old.

Age Annual Premium
16 Years Old $5,807
17 Years Old $4,892
18 Years Old $4,349
19 Years Old $3,114

Key Takeaways

  • Car insurance premiums are usually highest for 16 year old’s

  • There are a number of ways to reduce car insurance costs for new drivers

  • Discounts for new teen drivers range from 3%-30%

Top 10 Tips For New Teen Drivers

Bundle Your Insurance Policies

You can often find great insurance savings by bundling your auto insurance with renters, home or condo insurance.

Research shows that teens can save up to 8% a year by bundling policies. For a 16 year old driver, this is as much as $500 a year in savings.

Consider Usage-Based Insurance

Usage-based auto insurance, also known as ‘pay-per-mile’ auto insurance, offer discounts for cars that drive less than 10,000-,13,000 miles per year. If you aren’t going to drive your car regularly then you could get much lower premiums by jumping on a usage-based insurance policy.

Allstate’s Drivewise program & Liberty Mutual’s RightTrack program are 2 examples of usage-based insurance.

Change Your Teen’s Coverage During College

If your teen is going off to college, consider removing them from your family auto insurance policy. You can then add them back as a temporary driver when they return during school breaks.

Alternatively, get a “student away from home” discount from your auto insurance provider. Data shows that this can save you between 15%-30% on your costs. For a 17 year old driver, that could lead to $1,462 a year in savings.

Look For Student Discounts

There are 2 main ways that teens in education can save on their vehicle insurance. Firstly, believe it or not, but maintaining a good GPA (3.0 or above) at school can lead to lower premiums. Second, if you pass a safe driving class then you may qualify for a discount. However, the extent of this discount will depend on your insurance company.

Pay Your Annual Premium Upfront

If you’re able to pay your yearly premium upfront, instead of in monthly premiums, then you may qualify for an insurance discount. On average, you can expect to receive a 5% discount for a yearly upfront payment. For a standard 17 year old, this is a saving of $245 a year.

Speak To Your Insurance Agent

If you’re a parent who is looking to add your teen to your family’s auto insurance policy, then speak to your insurance agent about the discounts that they can offer your teenager. Even if they can’t give you a discount, they may still be able to recommend ways that you can lower your insurance costs.

Cut Out Non-Essential Coverage

You may be able to lower your insurance costs by cutting out non-essential coverage from your policy.

Things like coverage for replacement rental cars when your own car is in the shop could be removed to help you offset the cost of your teen’s insurance.

While cutting unnecessary coverage can help you to save money, in reverse, you may also want to add additional coverage to lower your costs.

Teens are more likely than their parents to be involved in a car accident (statistically speaking). So, by boosting your coverage above the minimum state requirements you may save money down the line if your teen crashes their car.

Buy A Cheap Car

Typically, older cars cost less to insure. While you shouldn’t choose your car based solely on its age, it is something for you to consider if you’re buying your teenager their first vehicle.

Increase Your Deductible

Increasing your deductible can also lead to significant insurance policy savings. By increasing your deductible (what you pay before your insurer starts paying) from $500 to $1,000, you can save around 10% on your auto insurance. That’s an annual saving of $427 for the average 18 year old.

Shop Around For Quotes

Finally, always shop around for different quotes. Once you know exactly what coverage you need, go to multiple insurance companies and request a quote. This is age old insurance advice, but it is a good way to ensure you get the cheapest quote possible.

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