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Saving on insurance with teen drivers

June 17, 2015

Adding a teenage driver to an auto insurance plan can lead to a huge rise in charges and fees. That was common knowledge before, but a recent study done by insuranceQuotes.com puts the payment spike in greater perspective. According to the survey, a married couple will see their rates go up by an average of 80 percent after adding a teen to their insurance plan. In some states, that number is even higher; such as in New Hampshire, where payments increase by a jaw-dropping 115 percent.

Having a teen driver can lead to expensive premiums for auto insurance customers.

So what can be done about the high rates, besides revoking the driving privileges of everyone younger than 20? There are ways to have affordable auto insurance, even with a younger driver on the plan. Here are some tips to lowering your costs:

Make them study

Many insurance plans offer incentives to teenage students who perform well in the classroom. Not every plan in the same, but many companies will give discounts to high school or college students who maintain a B average, have a GPA of 3.0 or higher or are named to a Dean's List or Honor Roll, according to AAA. Using the opportunity to drive as an incentive to perform well in the classroom may prove to be a win-win for students and parents.

Laura Adams, a senior analyst for insuranceQuotes, said in the company's press release for the survey that a markdown for smart students is a deal every parent should be on the lookout for.

“It's really expensive to insure a teen driver, but good student discounts can take some of the sting out of these bills,” Adams said. “I've seen discounts as high as 25% for students who maintain at least a B average in high school or college. Students and their parents need to proactively request this discount.”

Ladies first

Parents with daughters should be more encouraging to let their teenagers start driving than those with sons. Sixteen-year old females saw an 81.97 percent rise in their insurance rates, compared to 109.24 for males. On average, over the course of the four teenage years wherein driving is legal, parents of boys saw a 92 percent rise, versus 67 percent for girls, according to the insuranceQuotes.com survey.

Waiting until a teen ages a year or two before they drive can help save money. Female teen drivers offer greater discounts for parents than their male counterparts.

Wait a year or two

It can be enticing to allow a teenager to start driving as soon as they are legally allowed to, on his or her 16th birthday. However it can be financially beneficial to wait a bit. That is because rates are higher the younger a driver is, so delaying the start of a driving career just a year or two can result in a lot of money saved.

The insuranceQuotes.com survey found that auto insurance premiums jumped up to 96 percent for 16-year-old drivers. That number drops each year the teen ages, down to 60 percent when they turn 19.

Many parent are already taking this advice. Thirty years ago, four out of five Americans ages 17 to 19 had a driver's license. In 2012, when the University of Michigan conducted a study on the subject, fewer than 60 percent of Americans in that age group were certified to drive.

Parent supervision

Even after a teenager has earned his or her license, it is helpful to have parental guidance. Work with a teen to ensure they are understanding the rules of the road and the intricacies to driving. This will prove to be beneficial if they can stay out of accidents, especially if you have to compare auto insurance companies. Many will offer discounts to young drivers who have a clean driving record.