5 Secrets to Cheaper Car Insurance for Teens

Auto insurance for teenagers is notoriously expensive. Combine their youth with a freshly minted driver's license, and you have the recipe for auto insurance prices that skyrocket. Yet did you know that there are five ways to lower them?

1. Get Good Grades

Insurers equate academic prowess with personal maturity and responsibility. Be sure to shop around when buying insurance for teens in your household; each company weighs good grades differently and discounts can vary considerably. While one company offers a driver up to a 25 percent premium reduction for maintaining a "B" average, another may offer considerably less in discounts.

2. Stay in School

The gap year after high school will cost you dearly in premiums. MSN Money reveals that auto insurance for teens is lower when the under-age driver takes a college course load of at least 12 credits. Parents should also be mindful of the fact that a teen going off to college qualifies them for a reduction in premiums, even if the youngster comes home on weekends and uses the family car. The catch: College has to be at least 100 miles away from home, and junior may not take the car there.

3. Go to Driving School

In the good old days, dad would take the budding driver to a deserted parking lot and teach him the finer points of driving the grocery getter. The teen would study the rules of the road - conveniently available in the form of a booklet at the local DMV - and get a learner's permit. After a bit more time in the parking lot and a few driving lessons that shaved years off dad's life expectancy, junior was ready for the driving test.

If you go this route, be prepared to spend more on car insurance for teens you plan on adding to your policies. Insurers now offer discounts to youngsters who go to a formal driving school or complete a company-approved driving course. On a personal note, I am a firm believer in enrolling teens in a defensive driving course. As I outlined previously, these classes present teen drivers with less than optimum road conditions and teach them how to safely recover from a skid, deal with locking brakes and traverse slippery terrain.

4. Drive a Newer, Safer Car

When buying the first car, do not opt for the beater or cheap used model on the lot. Sure, it will get scrapes, dings and scratches, but saving money at the dealership can result in paying more in auto insurance. For teenagers new to the road, Edmunds urges parents to consider a newer model vehicle with a good crash-test rating from the IIHS.

5. Pay via EFT

Would you believe that plenty of insurers actually knock off some money just for being given access to your checking account? So go ahead and bundle car insurance for teens with homeowner's or renter's coverage, parental auto insurance and other policies you may have with the company, and then pay by EFT for maximum cost savings.

Sources

MSN Money: "Cut car insurance for teens - 8 tips"

Y!CN: "Parenting a Teen Driver"

Edmunds: "Choosing the Safest Car for Your Teen Driver"