Delay Your Teen’s Driver’s License To Save Money On Insurance
Even if your teen has been counting down the days to their 16th birthday so they can finally be a licensed driver, it’s definitely in your financial interest to delay their wish. Adding a teen driver to your insurance policy is expensive.
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“ValuePenguin’s analysis of rate data shows that the cost of adding a 16- to 19-year-old driver with high academic marks to a family’s auto insurance policy — even as the third operator of a vehicle — equals $4,799 a year on average. Without a discount for good grades, insuring a teen can cost an average of $5,109 annually, but the expenses vary by location,” according to ValuePenguin data writer Andrew Hurst.
I can attest to this drastic increase in car insurance when my teen secured his driver’s license. Adding him to our policy nearly doubled our insurance costs, and he’s on the honor roll and drives a very used car. (So, on top of increasing my blood pressure, his driving is also demolishing our automotive budget.)
If adding a teen to your current insurance policy just won’t fit into your budget, you can avoid the budget bust by waiting until your teen is out of college.
“Young drivers can save families an average of 37 percent in car insurance premiums by waiting to get a license until 22,” adds Hurst. “Cumulatively, the cost of adding and keeping a driver on a policy from age 16 to 22 is $33,091 over six years.”
These staggering costs, though, aren’t universal across the United States. If you reside in Hawaii, Washington, Maine, Vermont, or Alaska, the cost of adding a teen to your policy is among the lowest in the country. If you reside in Michigan, Louisiana, Kentucky, Arizona, or Florida, however, you’d better brace yourself for the high cost you’ll pay in insurance rates for your teen.
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If you want to support your teen’s ambition to get their license at 16, it might be time to revisit your policy, shop around for a better rate, or compare quotes from several insurance companies.
DeAnn Owens is a Dayton transplant by way of the Windy City, yet considers herself to be a California girl at heart even though she’s only visited there once. To get through the dreaded allergy season unique to the Miami Valley, she reads, writes, complains about the weather, and enjoys spending time with her husband, two sons, and their newest addition, a Boston terrier puppy that is now in charge of all their lives. In the future, she hopes to write a novel and travel through time. See more articles by DeAnn.