The teenager shopping for car insurance is at a decided disadvantage. Car insurance rates are based on age and driving experience as well as driving record.
The best way for teenage drivers to work their way into better rates is stay on their parents policy in order to gain driving experience and a driving record. There is a good chance that after three years and a clean driving record that a preferred policy from the parent’s insurance company can then be issued on the teen drivers that want to have their own car and pay for their own insurance.
There are numerous discounts for the young driver today. Drivers training education is the most common discount. The drivers training course normally consist of 30 hours of driving with an authorized instructor along with 6 hours of classroom work. Some companies give discounts for good students that carry a 3.0 grade point average in high school or college.
There is also a resident student discount available by some insurance companies. The student has to live over 100 miles away from home to receive this discount.
Age Rating Tiers
Most insurance companies have age rating tiers on young drivers. The ages from 16 to 21 is one tier and the rates are the highest in this time period. The next age tier begins at age 21 and ends at age 25. The rates drop significantly at age 21 and again at age 25.
Vehicles Make a Difference
The younger the driver the higher the rate. The rates are very high for young drivers on newer vehicles that require collision and comprehensive coverage.
Older vehicles that only require liability coverage as a minimum state requirement is one way to cut costs for the teen driver. Utility vehicles like pick-up trucks receive a small discount and the teen driver can take advantage of that discount also.
The teen driver needs to stay away from high performance vehicles and sports cars because the rates will be very high and these cars may not qualify for standard car insurance.