Car Insurance for Teens and Young Drivers

Published: March 27, 2015

Updated: May 15, 2018

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Every parent has been in the same precarious position: it’s time to hand the keys over to the kids. The minute they hit the minimum age, they’re pleading desperately to get behind the wheel.

There’s a problem though: car insurance for teens can be prohibitively expensive.

Teens pay some of the highest premiums on the road due to their lack of experience; and unfortunately, in order to get this experience, they need to pay these higher premiums.

There’s a reason for the high premiums, however. In 2004, while only 13 per cent of Canadian drivers were aged 16-24, this age group accounted for around 25 per cent of the fatalities serious injuries on the road, according to a 2011 Transport Canada study. Similarly, in the US, young people aged 15-24 accounted for around 30 per cent ($26 billion) of the costs of motor vehicle injuries, even though they only represent 14 per cent of the population.

Furthermore, car crashes are the leading cause of death among 16-25 year olds, and alcohol or drugs are a factor in over 50 per cent of these deaths, according to a study from Mothers Against Drunk Driving (MADD) Canada.

Car insurance companies recognize this risk, and increase the premiums of young drivers to offset the fact that young drivers are overrepresented in motor vehicle accidents. Teens are much more likely to speed, tailgate, underestimate dangerous situations on the road, and they don’t wear their seatbelts as often as older drivers do.

Despite the stacked odds, there is some recourse for parents: finding the right car, student discounts, comparison shopping, avoiding tickets and claims, and combining your policies can save you hundreds of dollars a year on your teen’s policy. It goes without saying that keeping a clean record is probably the most important factor in keeping your teen’s rate low, but here are a few other ways to save.

Car Shopping for Teens – The Cheaper the Better?

No doubt, your son or daughter wants a fast car, but your wallet certainly doesn’t: choosing the right cars for your children can have a significant impact on the premium.

It helps to purchase smaller, cheaper, economy model vehicles like the Hyundai Accent, Mazda3 and Chevrolet Cruze as they’re generally cheaper on insurance too. Cars that are expensive to repair or more frequently targeted by thieves are going to cost more to insure.

Staying away from high-powered cars is a must: the Insurance Institute for Highway Safety (IIHS) recommends a list of safe, low horsepower cars for teens that serves as a great starting point for parents looking to purchase a used vehicle for their teen. The top safety choices are bigger, heavier cars like the Honda Accord, Kia Optima, Volkswagen Jetta, and Hyundai Sonata.

Discounts

Insurance companies reward good college and university students for keeping a high GPA, and after they graduate, alumni associations usually get discounted rates for their members.

Buying a car with a good anti-theft device, installing seasonal winter tires, and using a telematics device can also help you save on your teen’s policy. Taking a driving course in the past three years can help you save too.

Avoid having a standalone auto policy for your teen, as it can be much more expensive than bundling multiple cars together on one policy; furthermore, be sure to bundle your home and auto policies together with the same company to save even more.

Shop for the Cheapest Auto Insurance Rate

Comparing car insurance quotes online is one of the easiest and fastest ways to save on your car insurance, and it’s no different for young drivers. Different companies offer different rates to young drivers, and some offer different discounts depending on your teen’s situation.

Our free quote comparison tool can generate quotes from up to 15 different companies in just a few minutes, and it could save you hundreds or even thousands a year on insurance!