Getting a driver’s license is a big milestone for many 16-year-olds. But it also comes with a big expense: car insurance. Car insurance for teen drivers can be very costly, depending on several factors. In this post, we will explain why car insurance for 16-year-olds is so expensive, how to find the cheapest car insurance for 16-year-olds, and how to save money on car insurance for 16-year-olds.
Why is Car Insurance for 16-Year-Olds So Expensive?
Car insurance for 16-year-olds is expensive because they are considered high-risk drivers by insurance companies. This means they are more likely to get into accidents and file claims than older and more experienced drivers. According to the Centers for Disease Control and Prevention, motor vehicle crashes are the leading cause of death for teens in the United States. In 2019, 2,734 teens aged 16-19 were killed and 236,000 were treated in emergency departments for injuries from motor vehicle crashes.
There are several reasons why 16-year-olds are more prone to accidents and violations. Some of them are:
- Lack of driving experience and skills
- Overconfidence and risk-taking behavior
- Distraction from passengers, phones, music, etc.
- Impaired driving due to alcohol, drugs, fatigue, etc.
These factors make 16-year-olds more expensive to insure than older drivers. According to Forbes Advisor’s analysis, the average cost of car insurance for a 16-year-old on their own full coverage policy is $8,765 per year or $730 per month. This is about four times more expensive than the national average for middle-aged drivers, which is $2,008 per year.
How to Find the Cheapest Car Insurance for 16-Year-Olds
The cheapest way to get car insurance for a 16-year-old is to add them to an existing policy of a parent or guardian. This way, the teen driver can benefit from the discounts and lower rates of the policyholder. However, adding a 16-year-old to a policy will still increase the premium significantly. According to Bankrate’s analysis, the average cost of adding a 16-year-old to a parent’s car insurance policy is $2,735 per year or $230 per month. This is an increase of 144% from the average cost of a parent’s policy without a 16-year-old, which is $1,898 per year.
The cost of adding a 16-year-old to a policy will vary depending on the insurance company, the state, the type of car, the coverage level, and the driving record of the teen and the parent. Some insurance companies offer cheaper rates than others for 16-year-olds. Based on the companies evaluated by Forbes Advisor, the cheapest car insurance companies for adding a 16-year-old to a parent’s policy are:
- Erie: $1,803 per year or $150 per month
- Nationwide: $2,098 per year or $175 per month
- Geico: $2,168 per year or $181 per month
- USAA: $2,232 per year or $186 per month (only available to military members, veterans, and their families)
- Progressive: $2,402 per year or $200 per month
To find the cheapest car insurance for a 16-year-old, it is advisable to compare quotes from multiple insurance companies and choose the one that offers the best value for the coverage needed.
How to Save Money on Car Insurance for 16-Year-Olds
There are some ways to reduce the cost of car insurance for 16-year-olds, such as:
- Choosing a safe and reliable car: The type of car that a 16-year-old drives will affect the insurance rate. Cars that are more expensive, more powerful, more likely to be stolen, or more costly to repair will have higher premiums than cars that are cheaper, less powerful, less likely to be stolen, or less costly to repair. It is recommended to choose a car that has good safety ratings, anti-theft devices, and low mileage for a 16-year-old driver.
- Increasing the deductible: The deductible is the amount of money that the policyholder has to pay out of pocket before the insurance company pays for a claim. By increasing the deductible, the policyholder can lower the premium. However, this also means that the policyholder will have to pay more in case of an accident. Therefore, it is important to choose a deductible that is affordable and reasonable.
- Taking advantage of discounts: Many insurance companies offer discounts for 16-year-olds who meet certain criteria, such as:
- Good student discount: This discount is for students who maintain a certain grade point average, usually a B or higher.
- Driver education discount: This discount is for drivers who complete a driver education or defensive driving course approved by the state or the insurance company.
- Low mileage discount: This discount is for drivers who drive less than a certain number of miles per year, usually 10,000 or less.
- Safe driver discount: This discount is for drivers who have no accidents or violations on their record for a certain period of time, usually three years or more.
Conclusion
Car insurance for 16-year-olds is expensive, but not impossible to afford. By adding a 16-year-old to a parent’s policy, choosing a safe and reliable car, increasing the deductible, taking advantage of discounts, and encouraging safe driving habits, parents and teens can find the cheapest car insurance for 16-year-olds and save money on car insurance for 16-year-olds.