A driver’s license can open up a new world of freedom. Unfortunately, it also comes with numerous costs. You’ve probably already thought about the gasoline factor, but another major expense is the cost of auto insurance.
This is something that everyone needs to think about when they own—or regularly drive—a vehicle, but the bad news is that car insurance for new drivers is even more expensive. You’re more likely to get cheap car insurance once you’ve been behind the wheel for a while.
This makes sense from the insurance companies’ perspective—young drivers haven’t had as many opportunities to prove themselves. Statistically speaking, they’re also more likely to be in auto accidents. Even someone who’s getting their license for the first time as an adult can expect to pay higher prices than they would if they’d been driving for years.
Does that mean you—or your teen driver—won’t be able to take advantage of this newfound freedom? Not necessarily. This guide will provide tips on saving on car insurance when there’s a new driver on the policy.
Factors Affecting Car Insurance Rates
- Age
- Gender
- Where you live
- Marital status
- Credit score
- Type of vehicle
- Vehicle mileage
- Driving history
- Type of coverage
We’ll explore most of these points in greater detail later on. For now, understand that a driver’s lack of experience will result in higher rates than you can expect to pay later on. That’s why we’ve compiled this guide.
1. Shop Around
Feel free to go with the first company to provide you with a quote for car insurance coverage. While it might seem like a time-saver, this tactic can cost you money in the long run.
Visit the company websites and request as many free quotes as you can. It doesn’t take much time, and you can request the quotes anonymously so that you won’t be hounded afterward. Most of the major companies encourage this practice, but you might be able to get quotes from some lesser-known insurers as well. Once you’ve gathered all the information, study the quotes to determine which company will offer you the best deal.
2. Check Out Smaller Companies
Businesses like GEICO and Liberty Mutual get most of the press. But you might be able to save money by choosing a smaller insurance company. As a new driver, you might even get a special rate, though you can still expect it to be higher than experienced drivers would pay.
Be forewarned that you may only be able to get basic coverage at a discounted rate. However, depending on your circumstances, this could be all you could afford anyway. And even basic insurance is better than no coverage at all.
3. Take Driver’s Ed
Sign up now if you still need to take a driver’s education or training class. This is one of the best car insurance tips for new drivers since inexperienced motorists are only sometimes familiar with the rules of the road.
By taking a few classes, you’ll demonstrate that you have some driving experience already. As a bonus, it will help keep you and your fellow road users safer as a result.
Even experienced drivers can benefit from taking road safety classes—in both practical and financial terms. Auto insurance companies like to see that you’re being proactive about safety, as you’re less likely to get into an accident if you know what you’re doing. In turn, they’ll reward a safe driving record with lower car insurance rates.
4. Get on Your Parents’ Auto Coverage
Depending on your age and circumstances, one of the top car insurance tips for new drivers is to get on your parents’ insurance, which can save you money. If you’re still living with them and are under a certain age or currently attending college, you should be able to get coverage under their policy. Some insurance companies offer a good student discount—be sure to ask when you’re gathering information.
You should be able to get on your parent’s plan even if you’re driving a vehicle you’re paying for yourself. If you’re driving a vehicle that your parents have provided, chances are that they’ve already made arrangements for your coverage. Either way, the vehicle might have to be registered under one of your parents’ names beforehand, so keep that in mind.
5. Drive a Safe Vehicle
It’s a common hurdle for new drivers, especially teenagers: You’re excited to get out on the road but can’t afford a nice car. Most people drive “beaters”—older model vehicles that are in a less-than-prime condition—for the first year or two. This is particularly true if you’re still in high school or college and struggling to make ends meet.
The catch-22 is that insurance companies will offer greater discounts if you have a late-model vehicle that’s equipped with the latest safety features. The type of car you buy can affect your rates as well. For example, four-door sedans are viewed as a sedate option that will fetch a lower rate, while two-door sports cars that are built for speed cost a great deal to insure.
One final note: Be sure you’ll have the resources to service whichever vehicle you end up with. For example, if you own a Tesla, try to find a Tesla certified body shop near you.
6. Wait a Year or Two
If you still need to get your license, consider waiting a while before applying for the road test. Even if you have a driver’s education or other road safety course under your belt, you don’t have to get your license right away.
The older a driver is, the lower the insurance rate will be. There’s another, more practical benefit to waiting—you’ll be more mature by the time you finally get your license. You can still practice as long as you have your permit—it’s a good idea to get plenty of driving experience before applying for your license.
The Bottom Line
Whether you’re a new driver yourself or looking to add a teenager to your policy, these car insurance tips for new drivers can help you save money.
