As a parent, you're stressed about your teen being on the road alone now that they have their driver's license. Thoughts are racing through your head about them getting into an accident or distracted driving. The last thing you're probably thinking of is how much it will cost you to add them to your policy. But don't fear, there are multiple ways to save money on teen car insurance, including everything from good student discounts to shopping around with different providers.

1. Take Advantage of Good Student Discounts

One of the easiest ways to save money on your teen's car insurance is by ensuring they keep up with their grades. If your teen can maintain a B average, they might see anywhere from a 10% to 25% discount on their premiums. Here's a look at what discounts the most popular insurance companies provide to students with good grades:

• State Farm — Offers up to a 25% good student discount based on your teen's grades.

• Nationwide — Has an average savings of 20% for keeping a B average or higher.

• Geico — Save up to 15% if your teen maintains a B average or better.

• Progressive — Maintain a B average or better for an average discount of 10%.

2. Think About Usage-Based Car Insurance

Usage-based auto insurance, or UBI, has been around for a while and keeps track of your driving metrics. Insurance agencies monitor these metrics through an in-car device, cell phone app, or the car itself. It looks for things like speeding, hard braking or turning, acceleration, and even phone use while driving. They use this data to determine if you're a safe driver — or not — and adjust your rates accordingly.

This can be a great idea for teens because if they know they are being monitored, they'll think twice about driving aggressively. As a parent, you might enjoy savings of up to 40% on your policy.

3. Drive a Safe Used Car

Another way you can get an insurance discount is by having your teen drive a car that's cheap to insure. If they drive a new, luxury, or sports car, their rates will likely be through the roof. Loaning them your old car or buying them a used vehicle is the way to go. The more safety features a car has like auto-braking, lane assist, and blind spot warnings, the safer it'll keep your teen, and the lower your rates.

According to Car and Driver, some of the cheapest cars to insure include the Subaru Outback, Honda CR-V and Pilot, Ford Escape, and Toyota RAV-4. They cost an average of $1,121 to $1,190 per year to insure.

4. Look into Distant Student Discounts

If your teen moves away to college and leaves their car at home, you might be able to get an additional discount. It may not be a typical discount rate, but more of a status that you can switch to when your teen driver is more than a certain distance from home without a car. Here is what a few insurance companies offer:

• State Farm — Has a discount for students more than 100 miles from home who only drive during vacation or holiday periods.

• Nationwide — Their SmartMiles program is a cost-per-mile rate, which is perfect for driving little with fewer restrictions. 

• Progressive — If your driver is under 23 and lives more than 100 miles from home, you'll get a discount if they leave the car at home.

5. Compare Quotes Before Committing

Consumer Reports’ in-depth survey of more than 2 billion insurance quotes showed prices varied by thousands of dollars based on that state, customer driving record, and credit scores. The survey busted some myths, such as customer loyalty discounts. Many insurers charge long-time customers more than new customers, Consumer Reports found. Auto insurers also use a specialized credit score to determine rates. 

This shows that you should get quotes from multiple insurance providers before you just assume adding them to your current policy is the way to go.

Save Money While Keeping Your Teen Safe

Now that you know how to save money on your teen's auto insurance, you can have a little more peace of mind. Another way to feel safer about having your teen on the road is by signing them up for a driver's ed course at DriversEd.com. They'll learn additional ways to stay safe through our bite-sized driving lessons. You may even save money when they complete it!

Updated 09/27/2024