How to Get the Cheapest Car Insurance for Teens

Do Not Let the High Cost of Insurance Stop Your Teen from Driving

Female teenager behind the wheel of a car

Blend Images / Ned Frisk / Brand X Pictures / Getty Images

Car insurance is an expensive component of car ownership. Throw in a teen driver onto a family plan, and your rates could skyrocket. But despite this fact, it is possible to keep your cool when purchasing insurance for your teen. Below, learn what discounts are available, what car to buy to ensure the best rates, and what coverage to choose to keep your rates as low as possible.

Good Student Discount for Teen Drivers

Let’s start with the discount created explicitly for teens. Insurance companies have determined good students are, on average, better drivers. Most insurance companies offer a good student discount that can boost your savings, which generally applies to students making at least a B-average (3.0 on a 4.0 scale). Have your teen’s most recent report card ready to go when purchasing car insurance. If a 3.0 isn’t possible at the time you add your teen driver, the discount can always be added on at a later date if the grade point average improves. If you need an added incentive for your teen to get their act together, make them pay the difference in premium costs until he or she can get their grades up! 

Is Your Teen an Occasional Operator?

Sharing a car with your teen (or making note of the fact that they’re in school in another state) is a great way to save some cash. Most carriers can then list your teen driver as a secondary or occasional driver. Make sure to mention it to your agent because it is possible for this discount to slip through unnoticed.

Choosing the Right Vehicle for a Teen Driver

If car-sharing is still not in your teen’s vocabulary or busy schedules, don’t allow for car-sharing, be smart about picking out a vehicle for your teen. Look for something reliable yet affordable. You don’t want your teen stranded on the side of the road in a beat-up old truck, but at the same time, you don’t want to take out a loan on their fancy sports vehicle either. Depending on your price range, look for a car ranging in age from 6 to 10 years old that is still in excellent condition. Check for airbags and other safety features, and consider having a safety inspection. Liability insurance on a car with airbags is cheaper than on a vehicle without because airbags reduce the potential for serious injury. Whatever you do, don’t get your teen a sports car -- it’ll cause your rates to skyrocket. 

PLPD Coverage

Selecting the right coverage for your teen driver could potentially save you hundreds of dollars. If you followed the rules above about choosing the right vehicle, you are in an excellent position to ensure the car with personal liability and property damage, PLPD, only. To get PLPD only you cannot have a loan on the vehicle, and you’ll want to be in the position where you can replace the car on your own if something were to happen to it. PLPD is the least amount of insurance you can purchase making it the cheapest. Physical damage is the most expensive coverage for a teen driver. Avoiding physical damage coverage such as comprehensive and collision can save you a lot of car insurance premiums.

Resident Student Discount

A licensed teen away at school still needs to be insured. Even when your teen won’t have access to a vehicle, insurance is usually still required because they will come home from time to time. An even deeper discount is available through most insurance carriers for students away at school. If your teen is away at school, make sure your insurance company knows about it.

Insure on Parent’s Policy or a Separate Policy

Which is cheaper adding a teen to their parent’s policy or on a separate plan? It is a tricky question to answer. Insurance company rules and prices vary. It’s impossible to say which the best route to go is without doing your homework. Theoretically, adding a young driver to their parent’s policy would be the cheapest way to go. The teen driver would get all the parent’s significant discounts such as multi-car and multi-policy.

Some insurance companies have to rate a teen on all the vehicles on the policy, not just the one being driven by the teen. This is the biggest reason it may be cheaper to put a teen on a separate car insurance policy. If a teen is automatically rated on all the vehicles and a couple of the cars have full coverage, you will be paying a higher rate. Having a teen on a separate policy ensures the insurance company is only charging for the use of one vehicle. Major discounts can sometimes extend to a teen on their own policy if they live in the same household as another policyholder with the same carrier.

Teen drivers can be costly to insure. Think ahead when it comes to protecting your teen. Start working harder on good grades, shop around for the best vehicle, and minimize your coverage. Find out from your insurance agents an away at school discount is available and also check into having your teen on a separate policy to reduce premiums. A driver’s license is a rite of passage for most teens. Don’t let the high price of insurance get in the way of your teen’s newfound freedom.