Tuesday, September 27, 2022

How To Reduce Car Insurance For Young Drivers

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Shop Around For A Lower Rate

How To Reduce The Car Insurance Premium For Young Drivers?

Insurance companies charge different rates for the same coverage. They also treat the factors that go into your rate differently. Finding the company that is best for the kind of driver you are can save you a lot of money.

When you shop for insurance, you should always get three or more quotes to compare. And you can maximize your savings by comparison shopping every 6-12 months, when your policy is about to renew.

To learn more, check out WalletHubs guide to switching car insurance companies.

Shop Around For Your Insurance

Just because youre a young driver doesnt mean that there arent companies that are interested in this type of profile and that are more competitive than others. Of course, statistically, young drivers have more accidents than older insured people, but they also have many years of driving and insurance premiums to pay ahead of them. Furthermore, some insurers, who want to avoid shopping around and issuing a new insurance policy each year offer attractive loyalty discounts, aimed at young drivers. Its all about shopping around for your insurance to get the optimal conditions that motivate the insured to stay with the same company longer. Because Lussier Dale Parizeau is the largest insurance broker in Quebec, we deal with a large network of insurers, which allows us to meet the needs of all drivers, young and old, at competitive rates.

For a young driver, taking out insurance always costs more than for an experienced driver, even with an average claims rate. But there are several tricks that help new licence holders reduce their bills while building their car insurance history.

About the authorDenise Blouin

Once You’ve Found The Cheapest Quote Try To Haggle A Bigger Discount With Your Existing Insurer

Haggling is not a must especially if you want to try a new provider but if you’re looking to renew with your current insurer it is well worth getting on the phone to negotiate.

Once you’ve followed the steps above and got the overall cheapest price, pick up the phone and haggle. If your insurer can beat or match your best quote it saves having to switch policy.

Been with my insurer two years, just turned 22. Last year’s price £690, price at renewal £575… while Tesco quoted £425. Rang my insurer up, explained how I wanted to stay as I love their service. He quoted me a new price of £423, saving £152 and no changes. So happy that I rang. Thanks for the best tips everrr!Ava, by email

For more haggling tips, read the full Car and Home Insurance Haggling guide.

Have you used this guide’s techniques to save on your car insurance? If so, please feed back on the price you found in the Young Drivers’ Insurance Savings forum discussion.

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Who Has The Cheapest Car Insurance For Young Drivers

Our analysis is simple: the cheapest car insurance rates around will come from USAA insurance. On average, single 17-year-old males and females are paying $449 and $441 a month, respectively.

Keep in mind, USAA is only available to those who have served in the military . Outside of USAA, you can find competitive rates with Geico, at an average of $523 and $471 a month for 17-year-old males and females, respectively.

Our Guide On Car Insurance For Teenage Drivers That Could Help Save Hundreds On Your Annual Bill

6 Ways to Lower Your Car Insurance with a Teen Driver ...

As a younger driver, car insurance is easily the biggest outlay once youve bought your car, and there are no two ways about it: cover for under 25s is expensive.

It can be the single biggest hurdle that stands between you and enjoying your motoring because, in simple terms, the cars you want to drive are often off limits because they cost too much to insure. So you end up buying a cheap runabout, purely because its the only car you think you can afford to get cover for.

All we can say is, think again, and certainly dont give up as easily as that. There are deals out there to be had on insurance, so long as youre prepared to shop around and accept some compromises. There are even some fun-to-drive cars around that dont cost the earth to insure.

There are various ways in which younger drivers can reduce their premiums, although the most effective is to dive into the comparison sites and find a deal that works best for you not least because some companies are more accepting of younger drivers than others.

Theres no substitute for putting the hours in on the laptop, because theres no getting away from the fact that under 25s are charged more to insure their cars. Thats because statistically theyre more likely to claim, simple as that.

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What Type Of Insurance Do Young Drivers Need

If youre looking for insurance cover that protects you and any other parties involved should you have an accident, comprehensive cover is the best, and often the cheapest option. Comprehensive cover gives you the peace of mind that should you be involved in an accident, your car repairs or cost for replacement will be sorted so you wont have to foot the entire bill yourself.

Other insurance options are Third Party which, as the name suggests, covers only the third party if youre in an accident, and Third-Party Fire & Theft which also covers you should your car be stolen.

Do I Have To Add My Teenager To My Car Insurance

Its neither a good idea nor legal for a teenager to drive a car without insurance. You can have your teenager get their own policy but it will likely be much higher than a rate they could have received if they had been added to a parents policy, and they will not be eligible for any multi-policy discounts.

A teens learners permit will likely have little impact on premiums because of the required adult supervision but its still important to inform your agent before a teen gets their preliminary permit.

It is also vital to talk to your State Farm agent when a family member obtains a license in order to make sure the new driver is adequately covered. Not ensuring proper coverage could lead to complications if the new driver has an accident and needs to file a claim. Your agent can help provide options for your particular state so you can make the appropriate policy choices.

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How Do I Know If My Child Should Be Insured On Their Own Or Under My Policy

When your child has obtained their license, this is when you’ll both need to consider their insurance options. If your child will be purchasing or leasing a new car under their own name, they’ll need to get their own insurance. However, if your child will only be driving your car, you can add them to your insurance policy, either as a primary or occasional driver. Your insurer will determine what type of driver your child is depending on their usage of the vehicle and how many other vehicles and drivers are in your household.

Improve Your Driving Skills

Cheap car insurance for young drivers: 7 ways to save

Completing the Pass Plus driving course is an indication of your commitment to improving your driving skills. Aimed at young drivers within their first year or so of passing their test, the course will help you become a safer driver. Some insurance companies offer a discount to drivers who have completed this course.

A combination of all these factors can help you reduce the cost of your car insurance. If you are struggling to find an affordable policy, please contact us, as we have access to a great range of insurers.

Great and quick customer service, my case was not very straight forward but it all was sorted in a timely manner. So thank you, will definitely recommend you.

You always brought my policies down yearly without me having to question that and you have always been very efficient in the handling of documentation. Thank you.

Every time I have contacted you, you have been extremely polite and very efficient and taken care of my problems. Very impressed thank you very much.

The staff I have spoken with have been very, very good, very informative and very helpful.

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Why Is Car Insurance So Expensive For Young Drivers

Drivers ages 20 to 24 are involved in more crashes than any other age group besides teens, according to the most recent data from the Insurance Institute for Highway Safety, or IIHS. Young drivers, like teenagers, are inexperienced and more prone than older age groups to take risks like speeding and not wearing a seat belt.

For example, IIHS has found that 16- to 24-year-olds in the front seat are the least likely to wear seat belts, and drivers who speed tend to be younger than drivers who dont. IIHS has also found that 42% of drivers ages 21 to 30 who were killed in crashes in 2018 had a blood alcohol content at or above the legal limit, more than any other age group in the study.

As drivers age, risky driving behavior declines, with crash rates leveling out around age 30, according to Eric Teoh, director of statistical services at IIHS.

Even so, young drivers can still save on auto insurance by following a few guidelines.

What Company Offers The Cheapest Car Insurance Rates For Young Drivers

Out of the nations five largest insurers, USAA offers the lowest annual insurance rates for young drivers, on average, for both full and minimum coverage. For those without a military connection, Geico has the cheapest auto insurance rates on average.

Rates can vary drastically from company to company because every insurer uses its own unique formula based on factors such as demographics, driving record and vehicle make and model. While one insurer might charge 20% more for living in a city with high crime, another might increase rates by only 10%. Whats more, car insurance companies dont make these formulas public. The only way you can find the cheapest car insurance for you is by shopping around.

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Average Cost Of Car Insurance For 24

Auto insurance rates continue to slowly drop as you reach your mid-20s. Full coverage car insurance rates for a 24-year-old are 5.8% lower, on average, than a 23-year-old drivers rates, according to NerdWallets analysis.

Heres what else our analysis of 2020 car insurance rates by state says about 24-year-old drivers with good credit and no recent accidents:

  • Hawaii is the cheapest state for full coverage insurance at $1,092 per year on average, followed by Massachusetts and North Carolina.

  • Louisiana is the most expensive state for full coverage with an average annual rate of $3,728.

  • Hawaii is the cheapest state for minimum-required car insurance at $358 per year on average. Iowa and South Dakota have the next cheapest yearly rates on average.

  • Michigan has the most expensive minimum-required car insurance on average per year at $1,800.

See below for how your state stacks up for both full and minimum coverage rates for 24-year-old drivers.



Reduce Car Insurance Coverage For Young Drivers

How To Reduce Car Insurance For Young Drivers

Not every car driven by a young driver requires full coverage. Perhaps you only need an affordable liability-only option. Or, perhaps you can decide to forgo optional coverages, like comprehensive car insurance.

One way to get cheap car insurance for young drivers? Consider a reduction in car insurance coverage.

Whatever you decide to do, we strongly suggest you dont make the decision until youve done your research. Begin now by digging deeper into your basic coverages, such as liability auto insurance, and also look into additional options such as uninsured motorists coverage.

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Becoming A Named Driver With Allianz

Once you are 17 years or older and hold a valid learner permit or driving licence, you can ask your parent/guardian, family member or friend to add you as a named driver on their Allianz car insurance policy.*

Their insurance premium will increase, but it can be a good way to increase your driving experience.

* If the policy holder is in their first year of insurance and you are under 25, you can only be added to your parent / legal guardians insurance policy as a named driver.

Take Out Black Box Car Insurance

With Black Box Car Insurance you can prove to your insurer that you deserve to get cheaper car insurance even for a new driver.

What is Black Box Insurance?

It’s a way of helping young and new drivers to save money on their car insurance by rewarding safe and responsible driving.

The black box is installed in the car and used to monitor driver behaviour – quite simply, the safer you drive the cheaper your car insurance could be at renewal time.

It might not make your first car insurance policy cheaper but could apply a discount second time around.

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Buy A Safer Car For Teenagers

What cars are cheapest to insure for new drivers? When it comes to cars, remember this: parents should research the safety rating of any car they plan on buying for their teenager. Something else to remember:

A higher safety rating means lower premiums.

The Insurance Institute for Highway Safety regularly tests and evaluates cars for safety. The IIHS found that while teens are the riskiest drivers, they also drive the least safe vehicles. Tempting as a flashy, newer car might be for a teen, it may not necessarily be the safest option.

Our advice? If you want cheap car insurance for young drivers, choose a basic, older, non-sporty car with updated safety features for their first vehicle in order to keep insurance premiums down.

Pay As You Go Car Insurance

How to Get Lower Rates on Teen Car Insurance : Auto Insurance

One way of keeping your costs down could be pay as you go car insurance.

As you would with your phone, you can pay as you go or on a monthly rolling subscription.

Pay by Mile car insurance works this way. You pay a monthly parked premium, to insure your car while youre not using in and then you only pay a few pennies per mile.

So, there could be savings to be had by paying for what you use, rather than annually.

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Why Cheaper Car Insurance Premiums Could Be Temporary

Many factors will influence average insurance costs, but certainly one of the biggest at the moment could be the reduction in how far people have been driving since the start of the pandemic.

Under the first Covid-19 lockdown, some though not all insurers offered customers rebates to reflect the fact that they were not on the road as much as they had estimated when their premiums were calculated.

We advised drivers to consider contacting their insurers to reduce their annual mileage estimates and receive a potential premium reduction or rebate.

This year, young drivers are insured to drive 3,541 miles on average, down over 50% from 7,347 miles the year before, according to Compare the Market.

Slashing this average distance in half will have contributed to the reduced insurance premiums and fuel costs young drivers have seen this year.

You might not be able to get used to these lower prices, however. With lockdown restrictions ended and more cars back on the road, this average mileage could increase to its pre-pandemic level, potentially dragging premium costs up with it.

Car Insurance For New Drivers

Shopping for car insurance is no easy task. Especially if its your first time. As a new driver or the parent of a young new driver, you may be asking yourself a bunch of questions on how and when to get started. Well, we’ve made the process of understanding car insurance for new and young drivers a little easier to navigate. Let’s cover the basics.

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Take A Defensive Driving Course

Sometimes insurance companies will provide a discount for those who complete an approved defensive driving course. Drivers may also be able to reduce the number of points they have on their licenses by taking a defensive driving, accident prevention, or other course.

Make sure to ask your agent/insurance company about this discount before you sign up for a class. After all, its important that the effort being expended and the cost of the course translate into a big enough insurance savings. Its also important that the driver sign up for an accredited course. Every state has its own rules about accredited defensive driving courses, and GEICO allows you to check what they are by state on its website.

Tip : Plan Your Insurance In Advance

Teen Driver

This is a big one and really caught me off guard. Simply by moving the start date of the insurance to 2 weeks in advance , it took off ONE HUNDRED AND TWENTY POUNDS! And it was only £6 more if it I did it only one week in advance.

Essentially if you do the quote to start the same day, the insurance companies know youre desperate and will take advantage. Get your quote a little further into the future and youll potentially save a fortune.

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Reducing Your Cost As A Young Driver

If you follow all of the above steps and, above all, drive carefully and keep mileage down, you can dramatically reduce the costs of your insurance as a young driver.

But by far the best way to guarantee that you get the best cover at the best price available is to use a young drivers car insurance comparison service like ours. Well make sure that you find the exact kind of policy youre looking for at a price that you can handle, so that you can maintain the excitement you had as soon as you passed your test.

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