Car insurance for young drivers

Insurance companies raise rates for teenagers and young drivers because they’re risky. They don’t have much experience, and they tend to be less mature, so they get into more car accidents. Sadly, car accidents are the number-one cause of death among teenagers, and that frequency of collisions and deaths is costly for insurance companies. The good news is that insurance rates for young drivers often vary much more than they do for middle-aged adults. Here’s how to take advantage of that variation.

a. Be the right person.

If insurance companies believe that a teen or young driver is a “good kid,” they’ll reduce the cost of insurance. Convictions of any kind can cost you, but being a good person and student can reward you. Most of the time, insurance companies will look at report cards and standardized test scores to find out whether young drivers are good students. Good grades can earn savings. Interestingly, so can volunteer work and membership in community organizations. Before purchasing insurance for a young driver, find out if they offer discounts for good students and model citizens.

b. Have the right car.

Some people think that insurance companies charge higher rates for red cars. That’s not true, but they do charge higher rates for certain types of cars. SUVs, sports cars, and luxury cars raise red flags for insurance companies; people who drive these tend to take more risks, especially if they’re young drivers. Choosing a middle-of-the-road, less glamorous vehicle is a good bet for someone looking to save on insurance for young drivers. Somewhat newer cars tend to have lower rates, largely because of their safety features. Side-impact air bags and antilock brakes can get you a discount; so can stability control and other features that make cars easier to maneuver and drive. Choose a car with insurance costs in mind, and you’re sure to get a better rate.

c. Know the rules.

Finally, choose the best way to add the insurance. Usually, young drivers’ parents already have car insurance, and it can be cheaper to add a young driver on to an existing policy instead of buying a new one. Some places may require people with learner’s permits to have car insurance as well, so make sure you know when it’s necessary to purchase insurance for a young driver. Also, read your policy carefully when considering driving-related jobs (e.g. food delivery). Many policies do not insure collisions that occur when transporting items or people in exchange for wages.