How to Plan for Teen Auto Insurance Cost

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Leslie Kasperowicz holds a BA in Social Sciences from the University of Winnipeg. She spent several years as a Farmers Insurance CSR, gaining a solid understanding of insurance products including home, life, auto, and commercial and working directly with insurance customers to understand their needs. She has since used that knowledge in her more than ten years as a writer, largely in the insuranc...

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Dan Walker graduated with a BS in Administrative Management in 2005 and has been working in his family’s insurance agency, FCI Agency, for 15 years (BBB A+). He is licensed as an agent to write property and casualty insurance, including home, auto, umbrella, and dwelling fire insurance. He’s also been featured on sites like and Safeco. He reviews content, ensuring that ex...

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Reviewed by Daniel Walker
Licensed Auto Insurance Agent

UPDATED: Oct 28, 2021

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Things to Remember...

  • Teenagers must pay higher insurance rates than other age groups
  • Teenagers lack the driving experience that can help lower insurance rates
  • Teen driver safety is of utmost importance to parents
  • Teenagers are eligible for some discounts such as having good grades

Teenage years can be fraught with hardships for parents, but perhaps the most worrisome time is when a teenager begins to drive. Besides the dangers inherent in driving, the cost of teen auto insurance is through the roof!

Careful planning can help to offset some of the teen auto insurance costs while also helping younger drivers to be safer drivers.

Every parent’s main focus is obviously going to be their son or daughter’s safety, but saving some money on auto insurance premiums is desirable as well.

While nothing can completely offset the higher cost of insurance for young drivers, there are some ways to lower the cost.

An added bonus is the opportunity for parents to teach their teens that with freedom comes great responsibility!

Get car insurance quotes for teen drivers by inserting your ZIP code into the FREE box on this page now!

Why Teen Auto Insurance Costs More


In a nutshell, teen auto insurance is by far the most costly of any age group because young drivers pose a greater risk for having to file a claim for an accident.

According to the National Highway Traffic Safety Administration (NHTSA), drivers from 15 to 20 years old are involved in three times as many fatal accidents as all other age groups combined.

Furthermore, fatal crashes are the leading cause of death in young drivers, so auto insurance underwriters understand that teen drivers are going to cause more accidents, and insurers require a higher premium to cover that higher risk.

Common sense tells us that those who have the least experience in any skill will make the most mistakes, and driving is no different.

There is more to it, however. In addition to less experience, studies have found that young drivers are also more likely to engage in distracted driving, such as texting while driving.

Furthermore, young drivers are also more likely to engage in risky behaviors such as:

  • Speeding
  • Driving without a seatbelt
  • Driving while under the influence

When you are formulating a plan to reduce the cost of teen auto insurance, you are actually formulating a plan to reduce your teen’s risk of being in an accident.

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Increase Experience


What teens really need is more experience with driving. Some parents withhold driving privileges until well beyond 16, the age when most states allow young drivers to hold a license.

While those young drivers are certainly more mature at 19 or 20 than they were at 15 or 16, they don’t necessarily have more experience.

Many states have adopted a three-stage Graduated Driver’s License in response to the high rate of death in young drivers, and available data has shown a decline in the overall numbers of teen deaths from car accidents.

A Graduated Driver’s License, or GDL, prolongs the process of getting a license and controls young drivers’ exposure to increasingly more difficult driving situations.

Most states have turned into law many of the key points in the national GDL model set forth by the NHTSA, the Insurance Institute for Highway Safety, the National Safety Council, and the National Transportation Safety Board in the 1990s.

However, no state has a law containing all components of the national model.

The National Safety Council recommends that GDL standards should be the norm in every household.

Important key points of the GDL plan that can be used in your household if they are not part of your state’s laws include:

  • Age 16 is the minimum age for getting a learner’s permit
  • Learner’s permit must be utilized for a minimum of six months
  • Young drivers must log at least 30 to 50 hours of driving with an older, licensed driver
  • A provisional license is awarded after six months of driving without any accidents or violations and must be kept for a year
  • Drivers with a provisional license cannot drive from 10 pm to five am without a licensed adult
  • The number of other teenage passengers is limited to one until the provisional license year is up
  • No use of alcohol or electronic devices at all
  • Practice with a licensed adult is continued
  • Passenger restrictions and night driving restrictions are not lifted until age 18

Another key point in the GDL recommendations is also one that will save money on car insurance for a teenager.

 In order to pass from a provisional license to full licensure, a young driver must take a driver’s course.

Unfortunately, many schools have had to drop driver’s education classes due to budget cuts, so you might have to pay for a private driver’s class.

The cost will be well worth it when your teen drives in a safer manner and car insurance rates are lower.


Buy an Older Vehicle

Another idea for lowering a teen’s auto insurance cost is to buy an older vehicle for your teen to use.

While it will generally be more cost effective to have the car be in your name and on your insurance, you must weigh the pros and cons of adding a teenage driver to your auto insurance policy.

Regardless of your choice, an older vehicle usually has many points in its favor in terms of auto insurance costs.

  • It will cost less to insure overall because the cost to repair accident damages is much lower than with a newer car
  • If the vehicle is paid for in full, you have the option of not getting collision and comprehensive coverage on the vehicle
  • You may also choose to not file claims for damages to the teen’s vehicles that are minor, such as dings, dents, and scratches

The last positive point to getting a teen an older vehicle to drive is if the vehicle is damaged, then you will not be out the vehicle that you depend on to get to work!

Buy a Safe Vehicle


Whichever vehicle you choose to get your teen, you need to make sure that it is as safe a vehicle as possible. A safe vehicle will obviously do a better job of keeping your teen from being injured, but it will also cost less to insure.

Safety ratings going as far back as the 1990s can be found with the NHTSA and the Insurance Institute for Highway Safety.

Safe vehicles should have driver and passenger airbags, seatbelts, and as many other safety features as you can find when also looking for an older vehicle.

It is also a good idea to check a used car’s owner history to ensure that the vehicle has not been involved in a crash, flood, fire or other damage that make it less safe. NADA Guides offers a vehicle history check as well as

NADA Guides offers a vehicle history check as well as fair market prices for vehicles.

Checking the history and the fair market value for a used car will help you to ensure that your teen’s car will be as safe and as reliable as possible.

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The Teen’s Responsibilities

No plan about teen driving would be complete without discussing the responsibilities of your teen driver. One of the best ways to make a teen take as much care as possible with a vehicle is to make them earn it.

There is a wide range of possibilities for you to have your teen earn his or her driving privileges, in terms of both money and acting responsibly.

First, you should sit down with your teen and explain your rules plainly. One rule that should be a part of any parent’s list of driving laws is to for the student to get good grades.

Every parent loves to see a good report card, but it can also get you a good student discount with your auto insurance provider.

Furthermore, you must also lay out the consequences of breaking your rules, and they should include the loss of driving privileges for a set amount of time.

Next, you should seriously consider having your teen contribute a sizeable portion of his or her vehicle and insurance costs.

Driving is a privilege and a car is not a toy; these are things to be earned. Again, it is up to you to decide your teen’s share of the financial burden of owning a vehicle and insuring it.

Compare Auto Insurance Companies


The last part of your plan to combat the high cost of teen auto insurance is to compare auto insurance prices.

The quickest and easiest way to compare auto insurance for young drivers is to utilize quote comparison sites.

Quote comparison sites will give you an array of quotes, letting you see which car insurance company can provide the lowest priced coverage.

This is certainly a search that your teen should be a part of. It is a great first lesson in the costs and responsibilities that go along with the freedom of driving a vehicle.

Click here to start your comparison for teen car insurance right away by placing your ZIP into the FREE quote finder box now!

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Enter your ZIP code below to view companies that have cheap auto insurance rates.

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