Cheap Auto Insurance for Teens: How to Get the Best Rates

Did you know that 16-year-olds and teenagers have some of the highest car insurance rates in the country? They typically pay more for car insurance than mature drivers because insurers regard them as a high-risk driver.

The good news is that there are numerous teen driver discounts available to help reduce the cost of premiums for young and inexperienced drivers – and we've found them all. If you're looking for the best insurance rates for young drivers, we've got you covered. Here are our top tips for keeping your child safe on the road while also saving money on your monthly premium.

How Much is Car Insurance for Teenagers?

Teenagers and inexperienced drivers are frequently still learning how to drive safely on public roads. Insurance for teenagers is frequently much more expensive because they are considered a higher risk driver to insure.

A 16-year-old driver can expect to pay between $2,955 and $3,400 per year for full coverage, while an 18-year-old driver will pay slightly less after a few years of driving with a clean driving record.

The average car insurance rate for drivers aged 20 to 25 is around $2,200 per year for full coverage – nearly $700 more than the average rate for a 40-year-old driver.

Why Is Insurance So Expensive for Teen Drivers?

Teen drivers are the most likely to engage in risky driving behaviors, which should come as no surprise. And, because insurance companies base their rates on a driver's level of risk, it stands to reason that drivers under the age of 25 face higher insurance premiums. According to the CDC, younger drivers pose a greater risk to themselves and other road users than nearly any other age group for the following reasons:

  • Driving experience is limited.
  • More likely to accelerate
  • Drivers are more likely to drive without a seatbelt.
  • Higher rates of alcohol consumption
  • It is more likely that you will be involved in an accident.

How Teen Drivers Can Save on Auto Insurance

The good news is that, while insurance is most expensive for young drivers, there are still ways to save money by taking advantage of discounts and programs that can significantly reduce costs. Here are a few discounts and options for teen drivers that can help them save money on their auto insurance premiums:

Check to see if your teen is eligible for the Good Student Discount.

If your children get good grades, it can actually help you save money on your car insurance. Most insurance companies provide significant discounts to young drivers who can demonstrate that they do well in school, maintaining at least a B- grade point average in high school or college. To qualify for the discount, college students must typically take at least 12 credits.

And how much does a good student discount affect your rates? Most drivers save between 10% and 15% on their monthly premiums, though some insurers may offer up to a 25% discount to high-achieving students. Best of all, the savings last as long as a student's good grades do, until he or she reaches the age of 25.

Enroll Your Teen in a Driver Education Course

Even if your state does not require it, enrolling your child in drivers ed or a defensive driving course can keep them safer behind the wheel by lowering the likelihood of an accident. Most insurers offer a discount on insurance rates once your young driver has completed a course because it can make them less of a risk on the road. Drivers who complete these courses may be eligible for a 10% to 15% discount on insurance coverage.

Encourage them to drive Safely

It should come as no surprise that young, inexperienced drivers are more likely to take risks such as speeding and not wearing a seatbelt. According to one study, drivers aged 20 to 24 are involved in more crashes than any other age group other than teenagers. As a result, 25-year-old drivers pay nearly 25% more for full coverage car insurance after one speeding ticket and nearly 50% more after a car accident. As simple as it may sound, a clean driving record—free of tickets and accidents—can save hundreds, if not thousands, of dollars on insurance costs each year.

Inquire with your provider about the Distant Student Discount.

If your teen driver lives away from home to attend college and parks their car in your driveway, they may be eligible for a distant student discount. Most insurance companies will reduce your monthly premium if the student lives a certain distance away (usually 100 miles or more) and is enrolled full-time in college. Best of all, your teen driver will still be covered when he or she returns home for the summer. When combined with the good student discount, the distant student discount can provide a significant reduction in your premiums.

Examine Low-Mileage Discounts

From the standpoint of an insurer, the less time spent on the road, the lower the likelihood of an accident or claim. You may be eligible for a low-mileage discount if your child drives fewer than a certain number of miles per year. The price break varies depending on your insurer, but it can save you a lot of money, especially when combined with a similar distant student discount. Young drivers who qualify for the low-mileage discount typically save between 5 and 30 percent on their monthly rates.

Consider the Car

For their sixteenth birthday, your teen may wish for a brand-new, high-performance car. Unfortunately, that type of ride will not help to reduce monthly premiums. If you want to save money on insurance, an older, simpler vehicle with high safety ratings is the best option for your young driver. In the event of a collision, a gently used or modest sedan will be less expensive to repair or replace. Are cheap to repair or replace. Regardless of the car's age, make sure it has anti-theft devices, airbags, and anti-lock braking systems, which can result in lower premiums or eligibility for specialty discounts. If you intend to buy a car for your new driver, consult with your insurance company first. An agent will be able to tell you which makes and models are the most affordable to insure.

Boost Your Deductible

If you are financially secure, you may want to consider increasing your comprehensive and collision deductibles. This simple change will reduce your premiums by up to 5% to 10% while also preventing you from filing minor claims that could jeopardize your claims-free discount. Remember that while raising your deductible will lower your rates immediately, it may cost you more money in the long run if you can't afford to file a claim.

Eliminate Unnecessary Coverage

If your teen is going to be driving an old car that isn't worth much—say, less than the deductible—it might be a good idea to forego collision coverage and comprehensive coverage entirely. After all, if the car is involved in an accident, you may be obligated to pay more in premiums than your insurer will ever reimburse. If you decide to reduce your coverage, make sure you are still in compliance with your state's insurance laws as well as any coverage requirements imposed by your lender.

Compare Car Insurance Quotes from Several Companies

In addition to age, insurers use a variety of factors to determine rates, such as gender, location, and the make and model of a vehicle. Because each company weighs these factors differently, it's critical to compare prices to ensure you're getting the best deal. Get car insurance quotes from at least three carriers for equal amounts of coverage before deciding on a provider. To really maximize your savings, you should shop around every six months to a year, before your policy is up for renewal.

Lower Your Rates for Good With Affordable Car Insurance 

Now that you know how much you can save each month on your teen's auto insurance, it's time to find a policy that fits your needs and your budget—and we're here to help. You can choose a plan and get coverage in minutes thanks to our quick and affordable online car insurance quotes. Get yours today and rest assured that your teen will be a safer driver while you save money each month.