Save money when your teen takes the wheel

By Susan Ladika on September 13th, 2011

teen driverWhile there is no way to prevent your auto insurance rates from jumping when your teenager begins to drive, his behavior on the road and in the classroom, as well as the type of vehicle he drives, can influence how much your rates rise.

The biggest factors to keep in mind if you want to control costs are:

  • Your kid's track record behind the wheel. The better the driving record, the lower the auto insurance rates.
  • His grade-point average.
  • Having your teen drive a car your family already owns, rather than buying him one of his own.
  • The kind of vehicle your teen drives. Something big and boxy is typically cheaper to insurer than a sporty convertible with a lot of power under the hood.

Insurance for teens costs more than it does for adults because of the risk they pose. According to the Centers for Disease Control and Prevention, teens between the ages of 16 and 19 are four times more likely than older drivers to be involved in a crash.

Typically it's a cheaper bet to add your teen to your family's existing auto insurance policy. Make sure to assign your youngster to the car that's least expensive to insure.

At the same time, you can save cash if you consolidate all your insurance policies, such as homeowners, autos and life, to the same insurance company.

If there's no escaping getting your teen his own vehicle, check the Insurance Institute for Highway Safety's website to find the insurance losses for various vehicles. You should also check out its list of top safety picks. Cars with lower auto insurance losses generally cost less to insure.

Also encourage your teen to get good grades. Often, auto insurance companies will offer discounts to students with an "A" or "B" average, in some cases as much as 25 percent. You also may save money if you teen takes a driver's education class.

Another option is to install a monitoring device, which keeps tabs on your teen's behavior behind the wheel. Depending on the device, it may give your teen feedback if he does something wrong, or send a notification to Mom and Dad.

While you'll typically need to pay for installation of the device, as well as a monthly monitoring fee, some auto insurance companies offer discounts on your policy for having such a device.


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