Tuesday, April 1, 2014

New Teen Drivers: How to Keep the Cost of Insurance Down

Your teen has just passed their drivers test. Now you face the unenviable task of trying to find affordable car insurance for him or her. We’ve all heard the horror stories. Your friends and co-workers will warn you about the hundreds and even thousands of dollars they’re spending to let their kids drive. But it doesn’t have to be this way!

With a little bit of knowledge and planning you can drastically cut your costs.  Here’s what you need to know:

1. Buy an older car for cash. 

This probably isn’t what your teenager was hoping to get, but it’s the best way to keep your insurance manageable.  By "older", we don't mean a beat-up old clunker, just a used car that has been been cared for well. Check the various car checker websites to make sure it hasn't been in an accident or had any other bad mechanical issues. The seller should provide any major maintenance work done on the car, and when it was completed, in the form of receipts or work orders. If they can't, walk away from it.  If you pay cash and avoid a car loan, then you can choose more reasonable limits then the lending institution will demand.

2. Take an approved defensive driver training course.  

Certified defensive driver training courses will qualify your teenager for additional discounts! This is not the same as a school-sponsored drivers education course or one of many private drivers ed schools out there, which are mandatory in Washington if your teen wants to get their license before turning 18. Defensive driver training courses are for all ages and typically a one-day course that concentrates on defensive driving and "watching out for the other guy". After successful completion, get a copy from the course instructor and bring it in when you add your new driver.

3. Get good grades.

Good grades reflect a more responsible driver.  Drop off a copy of your teenager’s latest report card to see if they qualify for a good student discount.

4. Include your teen as an additional driver on your policy.

Don't take out a separate policy for them, as they will be considered ‘high risk’ and pay extremely high rates because of it. Adding them to your policy will certainly cause it to go up, but considerably less than an inexperienced driver having his or her own policy. Most responsibly-insured parents will have a solid insurance history which will qualify for a big discount, something a new driver will not have.

How do you pay this big premium increase? If your teen has a job, have them pay the additional portion of the premium. Then they have a stake in driving responsibly, and If they get in an accident and rates increase, then they are on the hook for the additional cost. This teaches them a valuable life lesson about being responsible and owning up to their mistakes.

Yes, young drivers will raise your insurance costs, but it doesn’t have to be terrible.  Schedule an appointment to sit down and discuss your policy with your SAV-ON agent.  We’ll review all of your options and any discounts you qualify for. Call us at 888-867-2866 today.