Why is car insurance expensive for new drivers?
For parents, insuring young or new drivers can cause monthly auto insurance premiums to rise dramatically. We broke down the numbers at compare.com and found that adding a teen driver to a car insurance policy can cause insurance premiums to increase by 111%. When a parent buys their teen a car and adds it to their policy, premiums can increase by a staggering 156%. these are unimaginable numbers but the reality for many.
There’s a good reason young drivers are more expensive to insure: teens and young drivers are statistically more likely to be involved in an accident. Here are some eye-opening statistics that reveal why it’s so much more expensive to insure young drivers than adults:
- according to the centers for disease control and prevention: car accidents were the leading cause of death among teens
- The Insurance Institute for Highway Safety reports that teen drivers ages 16-19 are three times more likely to be involved in a fatal crash than a driver over the age of 20
- cambridge mobile telematics revealed that 52% of crashes involving a teen driver occurred while driving while distracted using their cell phone.
- If you have your own policy, make sure your insurance policy reflects where you live and where you park your vehicle. Your address can be a variable that insurance companies use to price policies, and having it up to date makes filing claims more efficient.
- check the limits of the collision, comprehensive and civil liability coverages. colleges are densely populated with inexperienced new drivers. therefore, accidents are more likely to occur. checking your coverages in these areas will help ensure you have adequate coverage if an accident occurs.
- Vehicle and personal item theft inside cars is most common on and around college campuses. be sure to avoid leaving valuables in your car when it is parked on campus. And, of course, always lock your car.
It can be expensive for inexperienced, high-risk drivers under 21 who make their own car insurance payments to insure themselves. Wouldn’t it be great if someone provided affordable car insurance for young drivers? compare.com has tips for lowering the cost of car insurance and maintaining the coverage limits teen drivers need.
why do young drivers need affordable car insurance?
We understand why it costs so much to insure young drivers: the chances of them being involved in an incident that requires the car insurance company to pay are higher than they would be for older, more mature drivers.
The problem is that it is a difficult cost to bear for young drivers who insure themselves. Most teen drivers work part-time in jobs that pay at or near minimum wage, meaning much of their earnings go toward expenses like insurance and gas payments. For these drivers, cheap car insurance is critical to their financial well-being. Since not having car insurance is illegal in most states, finding affordable car insurance for a young driver is even more crucial.
As the economy recovers, not many parents are willing to shoulder the high cost of car insurance payments for their children. Those parents who pay their children’s insurance premium often feel the pressure, especially if they have more than one young driver on their car insurance policy at a time. For them, a more affordable car insurance policy for younger drivers would save them a lot of worry and money. so it’s surprising that many parents simply add their teen driver to their existing car insurance policy without doing anything to lower the cost.
how to get cheap car insurance as a young or student driver?
You can take several steps to get affordable auto insurance as a student, new driver, or young driver. First, if you’re still on your parents’ car insurance policy, make sure you’re listed as a driver. otherwise, you may not be covered in the event of an accident. You must also make sure that you are assigned as the primary driver of the car that drives to school.
then get a quote at compare.com and see what’s available. What’s the difference if you change your coverage levels? How about going with an insurer that isn’t a big name but offers a better deal?
comparing prices is the easy part. reducing to a more affordable insurance rate as a new driver gets complicated, so here are some additional tips to reduce the price of insurance as a young driver.
search for a secure driver & distant student discounts
As a new driver, trying to qualify for as many discounts as possible can help make your insurance more affordable. From good student discounts to safe driver discounts, there are many options available for young drivers that can help lower the cost of insurance. Many auto insurance companies offer students a discount that can be applied if they maintain a B or higher in all of their classes. good2go insurance offers customers a discount for installing an app on their cell phone that blocks text messages and calls while driving. be sure to ask your insurer about any other discounts you may qualify for.
There are also insurance discounts for college drivers going off to school. These are known as distant student discounts, and many insurances require that you simply update the mileage you travel each day to possibly lower your rates. If you do not bring the car you drive to school, your parents can update the policy to reflect the change in how often the vehicle is driven and the distance. You can even lower your auto insurance premium since you drive less.
To qualify for a distant student discount, you typically must attend school at least 100 miles from home. You’re not sure where to start? we recommend speaking with your current insurance agent. Tell them you need to lower your rates and ask if they offer any discounts you might qualify for as a student or parent of a student.
enroll in a road safety course to get insurance discounts
There is a wide range of road safety courses available for young drivers and students. A driver safety course can lower insurance costs and turn expensive car insurance policies into more affordable plans. many states even require that your insurance provider give you a discount for taking the course. auto insurance discounts for completing a safe driver class can range from 5 percent to 20 percent.
drive a less expensive car
Driving statistics have shown that teen drivers are more likely to be involved in a serious accident. this is not helped by the kind of cars young drivers like to ride. Nearly 50% of people who own high-performance vehicles like a Mitsubishi Lancer, Volkswagen GTI, or Subaru Impreza are millennials.
It’s hard being a young driver. You want everyone to see how cool you are, and driving a soccer mom’s minivan or your dad’s confident sedan isn’t going to get you any cool points. however, driving a less exciting car can significantly reduce how much you pay in auto insurance premiums.
You can’t corner as well in a honda odyssey as you would in a ford focus rs. But that’s what insurance companies like and why drivers of safer vehicles tend to have more affordable auto insurance policies. so maybe you’ll settle for the four-door, four-cylinder car instead of the 2.0-liter turbo and use that money you saved for something else.
telematics for usage-based insurance
Having someone record your driving might not sound like much fun, but installing a little black box could help you save. many insurance companies are catching on to ‘telematics’, which is when you install a small device in your car or download an app, and it tracks your driving for things like speeding, hard braking and hours of the day you drive.
If you’re a good driver, you may get a premium adjustment after a couple of months of supervision. some insurers will offer discounts for not driving between 11 p.m. m. and 5 a.m. m. or for limiting the number of miles you drive.
which company offers cheap car insurance for young adults & teenagers?
Auto insurance rates can vary dramatically between companies because each company has its own unique way of determining insurance rates based on several factors, including driver demographics, vehicle type, driving history, and driving history. even credit score.
The best way to find the cheapest auto insurance is to get quotes from multiple insurers to see who can offer the best deal.
what are the car insurance rates by age for young drivers
See also: What is the age limit for life insurance
Drivers under the age of 25 will pay more for their car insurance overall, but as you get older, you’ll see the rate change.
cheap car insurance for young drivers & teens by state
The state you live in can also have a major impact on how much you pay for auto insurance. that can be due to natural weather occurrences, crime rate, population, and state regulations, among other things.
The following table outlines the cheapest car insurance company on average in each state for teen and young drivers.
car insurance rates for young drivers by gender
Gender can also affect auto insurance rates for teen and young drivers. Data generally shows that male drivers will pay more for car insurance than female drivers because they are more likely to engage in risky driving behavior.
The average monthly premium for male drivers under the age of 25 is $164/month
the average monthly premium for female drivers under the age of 15 is $154/month
average car insurance rates for young drivers by age and gender
As the table above shows, men pay more for their car insurance than women on average. but an additional point to consider is that the difference decreases as male drivers get older.
life events that affect car insurance rates for young drivers
Along with age and gender, various life events and choices can affect your auto insurance rates as a young driver. here are some to consider.
have a roommate
Insurance companies often have rules regarding roommates using carpools. Companies will assume that roommates share cars since they share a house and other responsibilities. the company might increase your rate to account for the potential risk associated with having a roommate.
To reduce the chance of this happening, exclude your roommate from your auto insurance policy or get a joint policy.
getting married has many benefits; One of them is that your auto insurance rate is likely to drop almost immediately. You’ll also be able to take advantage of a multi-car discount if you both have your own vehicle.
just tell your insurance company that you are married and get the same policy as your spouse.
Otherwise, if you choose not to be on the same insurance policy as your spouse, you’ll want to exclude them from your policy, meaning if they drive your vehicle, they’d essentially be driving without insurance and vice versa.
The average monthly car insurance premium for married drivers under the age of 25 is $130.
The average monthly auto insurance premium for single drivers under the age of 25 is $160.
rent or buy a house
Finally, a major life event that can affect auto insurance rates for young drivers is the decision to rent or buy a home.
Once you buy a home, you’ll likely save on car insurance because you can combine a home and car insurance policy and receive a discount for multiple policies.
In addition, insurance companies tend to view homeowners as more stable and responsible than renters, and offer cheaper auto insurance rates in return.
The average monthly auto insurance rate for a homeowner is $93/month
The average monthly auto insurance rate for a renter is $110/month
Basically, when you own a home, you can save about 20% on your monthly auto insurance premium.
cheap car insurance for college students and graduates
Like new drivers, college students face challenges not only finding cheap insurance, but other big challenges like living in a new area, finding a job, and studying for classes. On top of all that, it can be a real pain trying to balance your finances, like living costs, gas money, and insurance. None of these are easy tasks, but we can help with at least one: finding an affordable car insurance plan for a recent graduate.
how to find cheap car insurance as a college student
Buying affordable auto insurance for college students or graduates is certainly a concern, but it’s rarely a top priority. Many young drivers under the age of 25 get a policy from the same insurance company their parents use or have used since they started driving. Some go online and get a quote or two from different auto insurance companies. Fortunately, compare.com makes it easy to find cheap auto insurance for college drivers or lower your current rate.
just follow our checklist!
car insurance policy checklist
best car insurance companies for college students and graduates
Unfortunately, there is no absolute cheapest insurance company for college students and drivers under 25. Every insurance company calculates risk differently, which means prices vary from company to company. however, there is a simple solution when looking for an affordable insurance plan: shop around. do your homework and get multiple quotes.
but who has time for that? we can help you streamline your search with a single form that will give you multiple quotes at once. you can compare insurance prices side by side, secure your best rate, shop and go.
what happens after graduation?
If you just graduated from college, what can you do to get a good car insurance deal when buying your own car insurance policy? The first thing is to make sure you have a good credit score. a good credit score gets you a more affordable rate on auto insurance. Be sure to keep your score up, too, by making bill payments on time and paying overdue debts. On the other hand, falling behind on payments can hurt your credit score. if you fall too far behind, your insurance company may choose not to renew your policy when it expires.
bundle your auto insurance policy with other policies
You may have multiple insurance policies, such as auto, renters, and perhaps life insurance. One way to find the most affordable auto insurance policy for you is to combine these policies. Bundling is when you buy multiple types of insurance from the same insurance company. It could not only reduce your auto insurance premium, but also the premium for your other insurance products, leaving you with one less bill to worry about.
understand what coverage limits you need
As a recent college graduate, you may not be in a position to rush out and buy a new car. some get a new car from mom and dad, but not many. If you plan to drive your current vehicle for a few more years, take a closer look at the coverage levels. if the car has a few scratches and dents, it might be worth increasing the deductible or removing collision coverage.
Be careful though, because while you can save money by changing coverage levels and deductibles, you can also find yourself in a bind if you don’t have money saved to deal with problems that may arise.
The only way to get the best auto insurance is to compare rates. age, driving history, and your address are factors that insurance companies may consider when pricing your policy. These factors are also changing today as a recent college graduate, especially if you’re moving out of state.
We make finding affordable auto insurance easy for both college students and new drivers under 25. enter your details once and we’ll show you some of the best options available!
Still looking for a more affordable insurance policy? start comparing today!
frequently asked questions about cheap car insurance for young drivers & teenagers
How can I get cheap car insurance when I’m young?
As a young driver, your best bet for finding cheap car insurance is to stay on your parent’s plan or compare car insurance rates between different companies to see which company can offer you the best deal.
Which insurance is best for young drivers?
The best insurance company for young drivers will depend on your location and driving record, as rates vary widely. You want to determine what is important to you about an insurance company, the type of coverage you want, and the company that can offer you the most affordable rate.
How can a 16 year old get cheap insurance?
Buying coverage under an existing policy with your parents is the best way to get affordable insurance at age 16. Alternatively, you can get insurance quotes from multiple providers to save money. Although insurance laws vary from state to state, many states do not require drivers to have full coverage.
Why is first time car insurance so expensive?
Insurers tend to charge much higher rates to first-time drivers, regardless of age, because these drivers lack experience. In some cases, you can expect to pay $5,000 or more for auto insurance in your first year.
How can I compare cheap car insurance online for young novice drivers?
The best way to find the cheapest auto insurance for young drivers is to get quotes from different auto insurance providers to see who can offer you the best rate while maintaining quality coverage.