The whole world is open for you after graduation, but insurance companies consider you to be a big liability. For sure, buying insurance for your teenage driver will make a hole in your budget, but it will not be enough to ruin it completely. The average cost of including a teenager into your insurance will be $2,000 a year and it is a considerable sum. Try to find a good compromise between your desire to become independent and parents’ desire to preserve their house.
The first advice is to stay under the same cover with your parents. Buying an independent insurance when you are eighteen is pure madness and will cost you two times more than the average price. Insurance companies prefer consolidated households as the administrative expenses decrease. In a word, prepare to share the apartment with your parents for a few more years. 🙏
The second advice concerns the Good Student Discount. Being able to maintain B average during high school will allow State Farm or Allstate to reduce your premium up to 25%. Although parents will say that you did not work seriously in Calculus, it will be very profitable for you to show your final transcript to an agent. 📚
The type of a car is crucial factor for insurers, but not your experience of driving. Getting a new cool Mustang GT will be too expensive for you, but a ten-year-old Honda Civic will be your rescue. The cost depends not on your desire to impress people or speed, but on repair costs and probability of theft of your car. Choose boring and reliable cars if you need to save money. 🚗
Unfortunately, the bitter truth is that you will pay too high rates no matter what you do. Teenagers are likely to crash their cars and it is impossible to change anything in it. However, you will be able to reduce the amount of payments slightly by attending a defensive driving course. It will cost you about $30 and will reduce your premium by 10% giving you useful skills. 🛑
The deductible is one of the most effective methods to reduce your payments. Agreeing to the deductible of $1,000 instead of $500 will make your monthly payment lower. Of course, it means that you will have to keep $1,000 aside in case of emergency. It is quite risky, but a calculated risk. And the decision will be yours. 💰
You will increase your rates considerably if you get speeding ticket or even small accident. In order to save money, try not to have any accidents during the next three years. Drive carefully and responsibly and do not try to get a raw egg under your gas pedal. You have to be safe not only to avoid any troubles, but to become an adult driver in three years. 🚦
It is difficult to like insurance, but it is essential if you want to drive freely. Use The Zebra or NerdWallet to compare different quotes from Geico, Progressive and USAA. You should not agree to the first quote offered. Just some research will give you enough money for vacation in the future. ✈️