SHARE

For many young drivers, getting a license is a big moment in your life. You begin the transition into becoming independent.

4 ways to cut insurance costs as a young driver

Eventually, you’ll yearn for a car all your own. Unfortunately, other costly changes come are often included during this time.

Insuring a young driver is expensive.

Since you’re newer on the road, you tend to get distracted easily, and are generally at a higher risk of getting into an accident.

You may be shocked at first when you see how high your insurance rate can be, but there are several things you can do to significantly lower the cost.

1. Good grades get discounts

Star students can receive perks for their hard work outside of school as well.

It is a common practice for car insurance companies to provide discounts to young drivers who earn good grades.

If you are under the age of 25 and are making at least a B average, or are on the dean’s list, you can apply for a student discount.

However, the Department of Motor Vehicles states that you must be enrolled as a full-time student in order to qualify.

Young drivers going away to college may also be able to receive a “resident student discount”.

If you’ll be attending college at least 100 miles away from your current residency and not taking your car with you, insurance companies may be willing to lower your rates.

It’s safe to say you won’t be regularly driving the car, lowering your risk of getting in a wreck, and many car insurance companies understand this.

2. Enroll in a safe-driving course

The accident rate for young drivers is significantly higher than any other age group. This is the main reason insurance rates skyrocket for young drivers.

To help with this, enroll in a safe driving course.

Many insurance companies promote these courses themselves as a way to further educate young drivers on the rules of the road and provide a discount.

Steer Clear, a course by StateFarm, offers young drivers discount up to 15 percent. Others like teenSMART, a program from Liberty Mutual, can offer discounts as high as 30 percent.

Simply meet with your insurance provider after the completion of the course to discuss your discount options.

3. Purchase a basic older car

Getting your license is exciting, but there is no need to buy a flashy new car to go along with it. Some cars are simply more insurance-friendly than others.

The safety rating, theft rate, and accident frequency all play important roles in determining a car’s insurance premium.

Family-friendly vehicles like SUVs tend to be a little less expensive. SUV’s are typically are owned by more responsible family-minded drivers.

Certain compact cars are cheaper due to their owners usually choosing to stay close to home which decreases their risk of getting in a wreck.

While newer models come with all sorts of safety features, they also tend to be more expensive to fix; a factor that can drive up insurance costs.

4. Shop around

You’ll never know what the best car insurance rates are until you thoroughly do your research.

You can easily look up cheap auto insurance online.

With the comfort of shopping online and the high levels of competition, you’ll find a plan that fits your needs and budget.

Many websites offer side by side comparisons to help you stay organized.

Making a pros and cons list can help you determine what factors are most important to you

Buying insurance is big, and usually mandatory, decision that almost everyone has to make.

Before getting bogged down in the process, remember that expensive auto insurance rates are possible.

With a proven record of being responsible for good grades and a little online company comparing, you’ll quickly be on your way to discounts and the best deals.

How do you find these tips? How do you cut down your insurance costs?
Let me know by leaving your thoughts in the comment section below!


For more business tips, check our entrepreneurship section and subscribe to our weekly newsletters.