Car insurance for teenagers

In some regards getting a car for your newly licensed teenager can be a godsend as you will get to enjoy some quiet time at home while your child goes out and enjoys their sense of new found freedom, however on the other hand there is the financial cost of insuring another car which can end up being quiet a burden

Due to the fact that teenagers lack experience at driving, on average they will crash a lot more and cause more financial damage, because of this insurance companies are forced to have high premiums for teens wanting car insurance.

Many times parents will try to reduce the cost of insurance for their children by insuring the car under their own name and then adding their child as a named driver. This will reduce the premium significantly however if the insurance company ever finds out that the teenager is driving the car majority of the time they will cancel your insurance policy, and in the case of an insurance claim they would not pay out, so there is really no point.

As previously mentioned the initial cost of teenage car insurance is very high however this will drop down every year that the driver doesn’t crash as the insurance company will perceive that the driver is gaining more experience and is therefore less likely to crash. The same applies for traffic infringements and speeding tickets so if your teen is able to keep their driving record squeaky clean this will result in significantly lower policy costs as the years go on.

Depending on how much faith you have in your teenage child you can also reduce premiums by increasing the excess level on the insurance policy, what this effectively means is that you are saying that you will pay a greater amount, say the first $500 towards repair in the event of a crash. This lowers the insurance company’s liability and so they reward you with lower premiums.

If you are purchasing the car for your teen child yourself then there are additional steps that you can take to lower the premiums, the biggest thing that you can do here is to buy a car that insurance companies will not see as being high risk, if this means buying a sensible car then do it. The last thing that you want to do is buy a sports car or performance car as insurance companies often refuse insurance to young drivers with these types of cars. One last point on car selection, if you can get a car with an alarm and an immobilizer, then go for it as these features can often attract a discount.