Whenever a teenager gets their driver's license, it's always an exciting time, for both the child and the parents. Your teen will likely enjoy his or her newfound independence and the ability to go to school or events with friends without their parents dropping them off. By the same token, you may be thrilled with the prospect of not having to be the family cab driver anymore, shuttling your teen to and from school and activities. While this may be an exciting time, it can also be a costly one. Insurance companies often charge high rates for teens because of their lack of experience. Fortunately, there are steps you can take to manage the costs. Below are four strategies to consider:
Pay your student for their good grades. Many insurance companies offer good-grade discounts for high-achieving students. They do this because they see the academic achievement as a sign of responsibility on the part of the teen. Contact your insurer and find out if they offer such a discount. If so, you may want to offer your child a small financial reward for maintaining their good grades. You save money on car insurance and your child gets rewarded for their hard work.
Buy an inexpensive car. Another strategy is to buy a car that is relatively inexpensive. If the car doesn't cost much to replace, then the insurance should also cost less. Also, if you get an inexpensive car, you could even consider dropping collision coverage. If the car is wrecked so badly that it can't be driven, you may end up replacing it rather than repairing it. By dropping collision coverage, you could save a substantial amount on insurance costs.
Install an insurance tracker in the car. Many insurance companies are now leveraging technology to track driving habits. This is usually done through a small stick or chip that is plugged into the car's dashboard. The chip records car speed, stopping, turning, and more and then transmits that data back to the insurer. If your child drives safely, they may be able to take advantage of good driving discounts.
Get driving lessons. In some states, driving lessons for new drivers are mandatory. Even if they're not required where you live, driving lessons still may be a good idea. Many insurers will reduce premiums if a teen has taken lessons from a qualified instructor.
For more information, contact a driving school like All American Auto Driving School in your area. They can help you decide which types of lessons are right for your teen.