The excitement surrounding your teen getting his or her driver's license can be significantly dampened when you learn how much your auto insurance premium will increase. Fortunately, there are ways you can keep your insurance premium reasonable and still ensure that your car is adequately covered.
Buy an Older, Safer Car
One of the worst things you can do when your teen gets his or her license is buy a new sports car to drive. Newer model and sports cars typically cost more to ensure. The combination of a teen driver could quickly send your bill through the roof.
To keep your premium low, buy your teen an older car. Older cars have lower premiums. To save even more, check out the safety ratings of the car before buying. If you buy a car with a good safety rating, you can save even more.
Lower the Coverage
If you are buying your teen an older car, consider dropping the collision and comprehensive coverage. The damage to the other vehicle will still be covered if your teen is at-fault for an accident. However, your teen's car will not be.
Depending on the cost of repairs though, it is possible that the amount you would receive for the repairs if you did have collision and comprehensive coverage would not be worth the money spent on the premiums. As a result, you could save by simply skipping out on that coverage altogether.
Raise the Deductible
When you raise the deductible on your insurance, the price of the premium drops. Regardless of whether or not your teen has a new or old car, opting for a higher deductible can be beneficial. The money saved on the premium can be put in savings. In the event that there is an accident, you can use that money to pay the deductible. If your teen does not have an accident, you saved money.
If your teen has minor vehicle-related issues, try to avoid filing a claim. By paying out-of-pocket for minor repairs, you can avoid raising the premium. For instance, paying out-of-pocket for a broken windshield can help you avoid a possible increase in premium rates.
Consult with your insurance broker to find other ways that your family can save on auto insurance now that there is a teen driver on the policy. There might be discounts or special rates of which you can take advantage to save money.