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Cheapest car insurance for teens

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Finding affordable car insurance for teens isn’t easy. Insurers charge higher rates for teens than any other age group. 

It’s easy to understand why. Teens don’t have as much driving experience and are more apt to get into accidents. 

Teens are a big risk for auto insurance companies. That means they're never the cheapest to insure. However, there are ways to lessen the blow. Here are ways to get the cheapest car insurance for teens.

 

How much is car insurance for teens?

Teenagers are the most expensive to insure of all the age demographics A 16-year-old male is the highest. Auto insurance companies figure that the lack of experience will lead to claims. 

"Motor vehicle crashes are the leading cause of death among teens," said Loretta Worters, vice president of media relations of the Insurance Information Institute. "Immaturity and lack of driving experience are the two main factors leading to the high crash rate among young people ages 15-19. Teens' lack of experience affects their recognition of and response to hazardous situations and results in dangerous practices such as speeding and tailgating."

Average car insurance rates are at their highest for 16-year-olds and dip with each year until the young driver is well into his or her mid-20s.

According to teen driver data compiled by insurance.com, the average cost for car insurance for those very young drivers, by year:

  • 16-year-old - $3,989
  • 17-year-old - $3,522
  • 18-year-old - $3,148
  • 19-year-old - $2,178
  • 20-year-old - $1,945

It usually makes more sense for Junior to go on the family car insurance policy. But there are instances when it makes sense for your teen to have a separate policy. These include if someone in the family owns a luxury sports car, which automatically throws all the drivers in the house on that expensive insurance. Another reason is when your teen is financially independent.

As we noted, in most cases, it's better to put your new-driving teen on your auto insurance. It's significantly cheaper for teens, but it's still going to hit the premium charge hard, and right off the bat.

Using a 2014 Honda Accord as the "family car" with the primary driver a 40-year-old man looking for full coverage, we compared the rates in 10 zip codes in each state. Then, we added a 16-year-old to the policy.

When that teen was added to a policy, the average household's car insurance bill escalated 152%. It was even higher when adding a boy. 

You don’t have to accept high rates. We compared prices for multiple companies in California. We found the average increase when adding a teenage girl to a policy was $2,712 and a boy was $4,172, making the overall average $3,442 increase in your auto insurance cost per year. 

The table shows how much your annual rates will increase when you add a 16-year-old teen in California so you can see how shopping can save you hundreds or even thousands.

 Company   Female    Male  Average  Get a free quote online 
 Geico  $1,632    $1,758   $1,695 Get an online quote from Geico  
 State Farm    $1,394  $2,462  $1,928 Get an online quote from State Farm 
 Nationwide  $2,486  $3,228  $2,857 Get an online quote from Nationwide
 Progressive   $2,733  $4,223  $3,478 Get an online quote from Progressive  
 Allstate  $3,004  $4,112  $3,558 Get an online quote from Allstate
 Farmers  $5,024  $9,248  $7,136 Get an online quote from Farmers
 Average  $2,712  $4,172  $3,442

 

How to get the cheapest car insurance for teens

You know it's going to be costly, whether your teen gets his or her own policy, or is added to yours. But there are several ways to cushion the blow. 

Just about every auto insurance company offers what is called a "good student discount." The discount is for teens going to high school (or college) who maintain a "B" (3.0) average or better. The average savings for that discount is $361.

Homeschooled students can get the discount, too, achieving high scores on standardized tests. Most insurance companies will also offer a discount for students who are living away from home.

Geared specifically to the teen driver, and another way to grab a discount on your insurance, is by choosing a company that offers a "safe driver" program. Teens in this program sign a "contract" in which he or she has to fulfill certain responsibilities, such as not having passengers or driving too late, to rack up discounts and points. Some insurance companies offer driver training courses and telematics devices.

Considered among the "teen-friendly" auto insurance companies, Allstate has a Drivewise app that can be used by policyholders to earn up to 25% cash back for safe driving. The app tracks behaviors related to speeding, fast braking and others related to safety.

Another option is a defensive driver discount. Teens can take this extra driver education or defensive driving course, which goes above and beyond the minimum state-mandated drivers' education and training. In some states, discounts can run from 10% to 15% for taking these state-approved improvement classes.

 

Ways to get the cheapest car insurance

You'll likely get the cheapest auto insurance policy if you spend the time to look for it. Compare, contrast, ask and be diligent.

Several companies vie for the family market and make rates better and create more incentives, specifically, for teenagers. With its teenSmart Discount, accident forgiveness and several other teen-based features, Allstate has become a favorite for families with young drivers in getting cheaper auto insurance. 

USAA, State Farm, Farmers, American Family and Nationwide all have similar teen-based incentives for savings, too. Geico is known for its competitive rates, regardless of the ages of the drivers.

After you decide on a carrier and a policy, experts recommend you give your teen the beater car. It's not appealing or flashy to your kid driver, but being assigned to the least valuable car in the household will garner the most savings on the policy. 

Experts say that a mid-sized sedan tends to be the best choice for teens. Small cars don't offer as much protection in crashes, and sports cars make them want to drive too fast. Also, SUVs and pickup trucks are harder to maneuver and can roll over more easily. Your auto insurance provider factors this into the "risks," and it translates into defining your rate.

If you do end up giving your teen the old car that isn't worth much, experts say you could consider ditching the collision and comprehensive coverage to reduce the premium cost. The reason? You likely would dish out more for the premium than you'd get back from the auto insurance company should you total the car (or if it is stolen).

Another common way to lower your car insurance premium is to raise your deductible, said Worters. 

Keep in mind, if your teen does get into an at-fault accident, you'll be liable for that deductible.

"Also if you do raise the deductible, you might consider upping your liability limits (which are woefully inadequate anyway)," said Worters, "but with a teen driver, it's a financially prudent move."

Before your teen even gets behind the wheel, it's important to address, repeatedly, this life-changing responsibility. According to AAA, there are three things to consider when your teen is preparing to hit the road:

  • Finances: Can you and your teen afford the cost of auto insurance, gas and maintenance? Who will pay for the car? Have you found a safe car that fits your family budget?
  • Readiness: Has your teen demonstrated safe, responsible driving behavior and driven alone for at least six months without a crash or ticket? Before handing over the keys, make sure you are using a parent-teen driving agreement and are satisfied that your teen has been driving successfully without you.
  • Involvement: Is your teen ready to own, operate and maintain a car? Involving your teen in the purchase process can be a great learning experience regarding costs and responsibilities of car ownership.

This information and other helpful resources for parents are available on the AAA Keys2Drive site.

Teens: Do not drink and drive, put that cell phone down, and slow down! And to parents: good luck in your hunt for the cheapest car insurance for your teen. 

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