Most young drivers feel an excited sense of freedom and entitlement once they have that driver’s license in their hands. They don’t think or care about the cost of the car or the insurance as long as they have keys in their hand as they walk away from the DMV. The risks that young drivers face are not so obvious to them until it becomes a real problem.
When it comes to risk, insurance companies know how to handle it. They have employees who work on the statistical analysis of different sexes, ages, locations and what each of them means on average for the company risk. For parents and young drivers, it is important to understand how to make your insurance work for you. Knowing how to shop around for cheap car insurance for young drivers is crucial because if you settle on the first provider you find, you could be paying way more than you need to.
Ways to Save on Insurance
There are a number of statistics that determine why one young driver gets a different rate than another young driver. Location, gender, age, and vehicle are four key factors to determining the rate but there are other circumstances that lay beneath the surface as well.
Shop around to find out about premium discounts. There are a few standard discounts that insurance companies offer young drivers such as short commutes or good grades. A student with a good record at school is considered a lower-risk driver because it reflects their level or responsibility.
Consider higher deductibles, but be certain that the money is available if something does happen. Having a $1000 deductible to reduce insurance costs may not be a wise idea if coming up with $1000 in a pinch is challenging. If the value of the vehicle is small or insignificant drop the collision coverage. This covers the cost of vehicle replacement at current market value, so if the car has low value collision coverage may not be the best investment.
Find out if the insurance company offers a discount to young drivers that have passed a safe driving course. Have the driver take the course either way. It can’t hurt to be safe rather than sorry and there is no such thing as too much education. Most companies will give a discount for this but you have to ask.
Think about how the insurance premium will be paid for. Paying the entire premium up front will save money on monthly billing fees that can range from $3 to $10 depending on the company. If paying the entire premium up front is impossible, ask about billing fees for different forms of payment. Most insurance companies charge less for automatic payments because it saves them time and money over regular mail-in billing. Ask how often the payments will be made as well. Some companies do monthly, others do bi-monthly.
Ask about safe driver devices. These monitor driving habits and can lower insurance rates for those who show that they are safe drivers. It keeps them honest.
When shopping for the car keep in mind the type of car you should shop for. Large vehicles, sports cars, and 2-doors have higher rates than compact or midsized cars. Once you have a couple to choose form call the insurance company and find out what the rates will be. If the prices are comparable but one has lower rates it may make the decision for you.
Rates are high, so check out different companies for cheap car insurance for young drivers to save money. Don’t be afraid to shop around.
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