Why staying at home can save you money on auto insurance
Published: September 28, 2015
Updated: May 15, 2018
CATEGORY: Bundling Insurance
It is an industry trope that has a bit of cliché to it… young drivers pay disproportionately high premiums for their auto insurance. If you happen to be a young driver then that is very bad news indeed and means you better have some pretty deep pockets if you are planning on being a driver in Ontario in the 16-24 age demographic.
However, you can still find ways to save some cash and one of the methods is by doing something that younger generations are doing anyway. Staying at home.
We don’t mean for dinner, we mean permanently, as in don’t move out. Sorry mom and dad, but statistics show that young adults are living with their parents more compared to what they used to. Vastly more than say 20 or 30 years ago when a youngster was expected to move out at a younger age, but even in recent years there has been a hike.
26 per cent (more than one in four) young adults under 25 years of age now live with their parents, which is an increase from 24 per cent in 2010 and 22 per cent when the financial crisis hit. Sure, economy plays a huge part in young adults living with their parents longer as it certainly has financially benefits. This is very true when considering auto insurance.
It is already widely accepted that a young driver (16-24) will pay much more for their auto insurance premium on their own than they would if added to an adults policy. Indeed, at the very least you will have to pay around 8 per cent more for your premium, but in some cases you may pay up to 50 per cent more if you decide to go it alone.
A limited driving record, nascent credit rating, inexperience on the road, no insurance record and other factors are the reasons why insurance companies don’t gamble and instead hike premiums for young drivers. So some solid general advice would be to stay at home and be a named driver on a parent’s policy.
We are not sure how well that will go over with the folks, but there is statistical evidence to show that waiting it out will give you more affordable auto insurance in the future. In the United States, a young driver at 18 years old will pay nearly 20 per cent more for their premium on average if they take out a solo policy. By time a driver is 24 the number has dropped to a more manageable average of 4 per cent.
Millennials are staying home, so you may as well make the most of it.