Putting your child behind the wheel of a car for the first time is stressful enough. For many parents, however, the most stressful part is adding them to your car insurance! You can't get away with not adding your child--your car insurance company might not cover them in the event of an accident if they aren't listed on your insurance--but there are several strategies that can help you save money on your car insurance even when you have teenage drivers on your policy.
1. Have your teenager take Driver's Ed in school and keep their grades up. Some insurance companies use their grades as the basis for altering the premiums on the policy. Others offer a discount for teens who have taken Driver's Ed. Make sure to consult with your insurance company in order to understand what policies you can take advantage of in order to make your car insurance less expensive in spite of your new teenage driver.
2. Raise your deductible. Put a little extra money in your emergency savings account to cover the amount of the raised deductible--around $1000 is recommended--and change your policy to reflect the need. Keep in mind, however, that you'll need to have the money on hand to take care of that deductible if an accident does occur. You may also find that you avoid taking care of minor repairs following a fender bender if you have to pay for them yourself, which is something to take into consideration before changing your policy.
3. Know your vehicles. If you're driving an older car that isn't worth much, it may not be worth paying for comprehensive insurance on the vehicle--especially with the additional financial drain associated with a teenage driver. Consider dedicating a little extra money to your emergency fund each month to cover the potential cost of a new car instead.
4. Combine your car insurance policies. If you've simply "always" used different car insurance companies for your car and your spouse's, now is the time to consolidate! If you've purchased a new car for your teen, keep them with the same company you use, too. Many car insurance companies offer multi-vehicle discounts that will help keep your car insurance costs low.
5. Choose the right car for your teen. As a general rule, older, less expensive cars cost less to insure--especially if you're paying for a comprehensive policy and not liability only. Since young drivers are almost three times more likely to be involved in accidents than older, more experienced drivers, buying a less-expensive first car for your teen may also save you some significant repair costs along the way. While the color of your vehicle no longer impacts your insurance cost, a reliable older vehicle can change the expense of car insurance.
6. Check out driver tracking programs. Many insurance companies are taking advantage of technology to institute driver tracking programs that allow them to see exactly how a driver performs on the road: that they're following traffic laws, adhering to speed limits, and otherwise driving safely. Those tracking programs often come with insurance benefits: safe drivers, after all, are less expensive than drivers who regularly speed or take other dangerous chances.
Adding your teen to your car insurance policy is a rite of passage for many parents. It doesn't, however, have to drain your bank account dry. By following these six strategies, you may be able to substantially reduce the amount that you have to spend on your car insurance each month, making it easier for you to tackle the other financial challenges that come along with a driving teen: a new payment for their car, a higher gas bill, and a brand new insurance policy just for them, for example.