Saving Money on Teen Drivers

Having a teenager in the house is always challenging and one of the great rites of passage for any young person is getting a driver’s license and sometimes a car to go with it. While this frees the parents from having to drive their children everywhere with busy high school and extra-curricular schedules, it also creates a whole new set of worries and financial realities to deal with. Thankfully, there are ways to make the experience less painful on the wallet though perhaps not on the mind as much.

Five Tips to Save on Teenage Drivers:

• Shop and Compare - The most important thing you can do is to get quotes and compare Car Insurance rates. Rates change constantly so you should comparison shop at least once a year to be sure you have the best policy. Also consider that your teen driver will have to have the same coverage limits you do if they are on your policy and that typically drives the cost up a bit. You can save some money if they have an inexpensive car and you put a high deductible on it or consider not carrying comprehensive coverage on that vehicle if it isn’t worth replacing.

• Driver Safety Classes This is a requirement in some states just to get a license or permit but typically taking a drivers safety class will save you at least 5 percent off of the insurance premium for adding your teen driver to your policy.

• Encourage and Report Good Grades - If your child makes the honor roll or dean’s list and/or has a GPA over 3.0 most insurance companies will give you a good student discount of up to 30% off of the rates.

• Pay-As-You-Go - If your teen won’t be driving much you might consider getting an insurance policy that monitors driving habits like mileage, average speed, braking, and other things to determine safe driving habits, which will reduce your rates as long as your teen is a safe, low mileage driver.

• Postpone Driving - Adding a teenage driver to your household is always going to have costs associated with it. There’s insurance, driver’s training, gas, car maintenance, and your responsibility if your child is in an accident as well as any fines they might incur if they make a mistake on the road. One way to avoid this entirely is to hold off on letting them have their licenses. Some kids aren’t interested in driving anyway and with the availability of ride sharing for older students, you may be able to wait a few years until they start driving. On average insurance rates drop about 10% per year until they turn 19 and then they drop off quite a bit.

Whatever you decide, be sure to shop around for the best policies and research vehicles before making a purchase. Finance Source can help you get great APR financing on a used car loan, private party car loan, or new car loan. Newer cars now have more safety features than ever and that should help to put your mind at ease with your young driver. So will low interest financing.