Premiums for young drivers can be expensive because insurers look for responsible driving behavior and lifestyle factors when factoring rate discounts. Lack of experience behind the wheel and statistical data are the primary factors that determine insurance premiums for teen drivers. Insurance companies typically define "young drivers" as being between the ages of 16 and 25. People in this age group—especially males, may be classified as high-risk, because they tend to make more insurance claims than any other group of drivers. Statistics show that these drivers are more likely to be involved with traffic violations, accidents, and driving under the influence of drugs or alcohol. As a general rule, it takes at least three years of driving experience before young driver insurance rates begin to decrease.
Insurance providers often look for responsible habits that identify some teens as being more responsible than others. Doing well in school is one way for younger drivers to save money on car insurance. For example, depending on where you live, your insurance company may offer a Good student discount. Good student discounts are usually extended to unmarried young drivers, who maintain at least a 3.0 Grade Point Average, whether these drivers are in high school or college. Statistics show that student drivers who maintain better grades are less likely to make mistakes behind the wheel, and discounts of 10- to 15- percent are often offered to them. Additionally, being named to the Honor Roll or Dean's List, or placing in the top 20 percent on their class can secure discounts for young drivers as well. These discounts generally lower premiums that cover liability.
Here are some other considerations that may help to lower your premium.
- Drive responsibly: Maintaining a safe driving record in addition to having good grades is important. Safe driving discounts are the most important savings to keep for young drivers. A poor driving record will generally overwhelm any savings that may come from other discounts, such as a good driver discount. Involvement in a solo or at-fault auto accident may also cause rates to jump, as will multiple speeding tickets—even if a young driver has been receiving discounts.
- Remain on your parents' policy: If you still live at home, it may be a good idea to be added to your parents' policy as a Secondary or Named Driver. Additionally, your parents may be eligible for a multi-car discount. You can opt to be a Named or Secondary Driver on your parents’ insurance until you've gained a few years of experience, which is when rates generally begin to drop substantially.
- Enroll in a driving class: Driver education classes are mandatory in some states, but optional in others. Either way, your auto insurer may offer a discount for teens that complete one of these basic safety courses.
- Increase your deductible: You can reduce your premium by increasing your deductible. Also, choosing to pay your premium in full may avoid installment payment transaction charges.
- Low-mileage discount: Reduce the miles you drive annually and you may be entitled to a discount. The logic is simple: the more time you spend driving your car, the greater your chances to be involved in an auto accident. Consequently, mileage is often a factor that insurers consider when calculating risk.
- Drive a safe vehicle: Insurers are likely to offer discounts if some of your car's features reduce its chances of being stolen or increase its chances of being recovered. Parking in a secure garage, installing a car alarm equipped with an immobilizer, and other security or safety features not only protect your car, reduce risk of theft, accidental damage or break-ins, but they may also have a positive impact on your insurance bills.
- Some cars cost less to insure: You may pay less for car insurance if you choose a vehicle with a lower engine capacity. Typically, cars that are costly to purchase are also more expensive to insure—as well as to maintain and repair. It's always a good idea to get a price quote on insurance for your dream car before you complete the purchase. Additionally, modifications can run up the price of your premium. For example, spoilers, trim kits and turbo kits suggest a driving style that may adversely affect your premium.