According to the State of Auto Insurance report 2016, vehicle owners could pay as little as $560 or more than $36,900 annually for car insurance (nearly a 6500% difference).
I would say that it doesn’t refer to the car insurance only. If we took time and compared the prices of food and services, we could save a lot! I decided to answer the question that “How to save money on your car insurance if I’m a young driver?”
If you have any ideas or had any relevant experience, share in comments! 🙂
What are Insurance Quotes for Young Drivers?
Let’s start with a good news! The annual premium for a single male 18-year-old in Hawaii will cost you $900 🙂 kinda affordable plan, isn’t it?
The average annual premium is a little bit higher though – $5,411. Here you can familiarize with an average annual premium for the young drivers in the USA as for 2018.
According to the State of Auto Insurance report 2016, young drivers pay more than double for a vehicle insurance than any other group of drivers. The 16-year-old driver will pay $6,500 annually on average.
Don’t forget that the premium also depends on the age of your car. The insurance for newer cards will be more expensive. Older cars are usually cheaper to insure.
The insurance quotes vary from one insurance company to another. Thus, I would recommend you to compare the quotes before purchasing a plan 🙂 You can use Finder.com to compare the possible quotes.
Why is Car Insurance for Young Drivers that Expensive?
According to the Centers for Disease Control and Prevention, young drivers under 19 years old make up 11% of 10 billion of the total costs of motor vehicle injuries in 2013, even though this group represents only 7% of the population.
The chart from the Valuepenguin proves the statistic:
Young drivers create more road-traffic accidents than other groups of drivers do. The insurance companies consider them to be kinda risky clients and charge higher premiums.
Even if you expect for the high premium, there are some working ways to save!
I also wondered how to save money on car insurance for young drivers and found the answer!
Step 1. Purchase a Vehicle with the Right Safety Characteristics
I remember my meeting with an insurance agent – it looked more like an interrogation. And you will also face too many questions that will, nevertheless, help you to get a cheaper insurance!
You should purchase a car with the reliable safety characteristics. It, especially, relates to the used cars.
This way, such questions as Do you have anti-theft devices installed in your car? or Does your car have anti-lock brake system (ABS)? won’t boost your premium.
Step 2. Consider the Way you Pay for Your Insurance
According to the aforementioned the State of Auto Insurance report 2016, by paying off the bill in full rather than doing it in installments will save you $62 each year on average.
Yes, I agree. Not every young driver or his parents can pay the huge lump of sum right away. Don’t worry. Online transferring money from your bank account will save you $28 on average. Another benefit of the online transfers is that you can set the automated charges and won’t miss the bills.
Step 3. Avoid Insurance Gaps
Your insurance history begins after you purchase your first coverage. You can purchase it as a part of your parents’ insurance or otherwise. In all cases, you will save money if you avoid the coverage gaps.
The insurance agents recommend avoiding coverage gaps to save up to $100 annually. If you want to be independent of your parents, you should wait until you purchase your own plan and then switch.
Step 4. Track the Discounts for Students and other Young Drivers
I love discounts and coupons. And I’m sure that you are keen on them too!
Therefore, before paying the sky-high price for your coverage, search for the good-student discounts from insurance companies. You can look for the information on the Department of Motor Vehicle and check out whether you qualify.
Here is my another post about refinancing student loans.
Step 5. Attend Safe-Driver Courses
As your driver’s skills improve, your risk to the insurance agents potentially gets lower. Some young drivers DO save on car insurance after attending the safe-driver courses.
Experience of the young drivers isn’t significant enough to feel confident on the road especially driving at night. Therefore, taking such courses will make sense to your safety too!
I truly hope that I managed to answer the question how to save money on car insurance for under 25 drivers? If you have any questions, leave them in comments and we will discuss them together!
Let’s be attentive on the roads together!