Auto insurance is one of those monthly expenses we don't think about often, but it costs most people an exorbitant amount of money. This can be especially true of drivers who fall into certain demographics that the insurance companies view as "risky." For example, young males 16 to 21 years old are considered to be the worst drivers, in terms of accident frequency. Insurance companies don't think of teenage girls in a much better light.
What that means, in terms of insurance, is that teen drivers are always going to be charged an absolute maximum for their insurance premiums. This is due to the fact that the insurer knows, statistically speaking, that the teen in question is much more likely to be involved in a costly accident than an older driver would be.
There are ways to get around these unpleasant facts about insuring your teenage driver. Actually, there are several different ways in which you can significantly lower your teen's auto insurance premiums, or even reduce them to normal rates.
Limit the value of the car. The premiums that your teen will be responsible for will be based directly on the value of the car that they'll be driving. The more expensive the car, the more the insurance company will have to pay if it's involved in an accident. Therefore, the more expensive the car is, the more the premiums will be. So, get your teen an inexpensive car to lower those costs.
Let your teen drive a car that discourages recklessness. Whether it's right or wrong, one ironclad fact about the auto insurance industry is that they base their prices on generalizations. And, generally speaking, teenagers who are driving a Ford Mustang are much more likely to drive recklessly, speed, and perform illegal traffic maneuvers, than teens who are driving a Ford Focus. The insurance companies know this, so auto premiums for teens who are driving sportier cars will be much higher than for those driving other kinds of vehicles.
Try to insure the car yourself. If the insurance company doesn't already know that there's a teen driver in your household, don't tell them! Telling your insurance company about your teen driver makes about as much sense as double parking and then telling the next police officer you see that you did so. Instead, simply try to insure the car yourself. This will cost a significantly lower amount of money than if you have your teen get their own insurance, and it will actually save you money on your own premiums because you'll get a multi-vehicle discount. Likewise, keep in mind that if the insurance company knows you have a teenager in the household, whether they're actually driving or not, your insurance premiums will definitely go up in price. So, if the insurance company doesn't ask, then don't tell.
Look for a high-deductible insurance policy. You can save a lot of money on your teen driver's insurance policy by choosing a plan with a high deductible. What this essentially means is that if they are involved in an accident then you'll have to pay a higher dollar amount to contribute to the repairs necessary. Having such a policy will help to alleviate the major concern of the insurance company (that your teen driver will be in an accident and cost them a lot of money) and will allow you to greatly reduce your premiums.
Shop around. This almost seems to go without saying. However, it's very important that you don't simply get one quote from an insurance company and then immediately choose to give them your business. Instead, shop around to other companies. If you think their service is overpriced or non-competitive with other rates you've been quoted, be honest with them. If you tell one insurance company that their rates aren't competitive, they may try to offer you something in order to get your business.