Auto Insurance Tips For Teens and First Time Drivers

Congratulations! Congratulations! The process of getting insurance was easy when I first began driving. I simply went to my parents’ insurance agent and had it added to my policy. Although this may have been the best option for most new drivers, it is not always the best. These tips will help you make sure you get the best deal and that your limited funds aren’t being wasted.

Attaching to your Parents Policy

This is the route most first-time drivers choose to take. It is usually cheaper and your parents will likely have a good relationship with their agent. Multi-line discounts are a great way to save money. This means that insurance companies offer discounts to policyholders who have multiple lines or coverage through them. My parents had auto, home-owners and life insurance through one agent. This allowed me to get a substantial discount on my premiums.

Sidenote: An insurance premium is the monthly payment required to maintain your insurance policy. If you are involved in an accident, and need to file an insurance claim, a deductible is a one-time payment (often $100 or $250, $500, $500, or $1000, depending on which plan you choose). The insurer should cover additional expenses beyond what you have paid for the deductible.

Why is it so expensive?

Insurance will not be affordable, even with discounts offered by your parents policies. This is due to the fact that teens and early-20-somethings are the most likely to be involved in an accident. This rate decreases over time and then starts to rise once again after 60. This curve is followed by insurance premiums. They are higher when you first start driving and lower when you get too old to drive. For most insurers, your rates will decrease significantly once you turn 25, and remain relatively low until you are old and gray. My first vehicle was a regular F-150 pickup truck from 1989. I was just 16 years old when it was purchased. Despite all the discounts, I was still paying $100 per month for liability coverage. Then, a few years later, I bought a Mitsubishi Eclipse sportier two-door for over $250 per month for full coverage. This was more than the monthly car payment. This is what I wrote at 26 years old. I pay $75 per month for full coverage for my vehicle.

Insurance Price Factors

age multiple discountgood student discounts and type/car you drive are the main factors that affect your initial premium rates. Types of Car: In general, the sportier your car is, the more expensive insurance will be. Duh. Most teens can drive fast if they have the right conditions and a fast car. I know I did. I also have the traffic tickets to prove it. This is subject to an interesting caveat. Some fast cars may be more expensive than others. This is mainly true for sport sedans and luxury sedans. These cars are statistically safer and more likely to cause injuries. Although it’s difficult to give exact guidance as every company is different, it’s a good idea to get advice from your parents or your agent if you are looking for your first car. The Discount for Good Students: Most companies offer this discount because students with a GPA above 3.0 are more likely to be involved in traffic accidents and thus receive lower rates. Yes, sometimes good grades can pay off… who would’ve thought?

Other Parent Policies If you have a long list of accidents on your parents’ policy, it may be worth your while to get insurance. Online is a great way to get free quotes from reputable insurance agencies. Many of these links are found throughout this website. Another clever trick is to buy the cheapest term insurance policy with your auto insurance. When I was a teen and had to leave my parents’ policy, I bought the cheapest life insurance policy and added it to my auto insurance. With the discounts I got from having multiple lines, it was cheaper than buying just the automotive policy. It’s strange, I know.

Wrap up In conclusion, it is likely that your best option is to use the agent of your parents’ insurance company. If you don’t have insurance or you live on your own, you can get multiple quotes from various insurance companies. Also, ask about multi-line discount if you want cheap life insurance. You can often get valuable coverage like renters insurance, even if you don’t save any money.