How Can a Teenager Get Cheaper Car Insurance?

1. Stay on Your Parents' Insurance Policy

Why this is the #1 money-saver:

Adding a teen to a parent's existing policy is 50–70% cheaper than buying a separate policy.

Cost comparison:

• Separate teen policy: $5,000–$10,000/year
• Added to parent's policy: $2,000–$4,000/year added to parent's premium
• Savings: $2,000–$5,000/year

Why it's cheaper:

• Multi-car discount: Insuring multiple vehicles on one policy saves 10–25%
• Multi-driver discount: Multiple drivers on one policy reduce per-driver costs
• Higher liability limits: Parents typically carry better coverage than teens would buy alone, but it's bundled at a lower rate
• Established relationship: Parents' loyalty and clean records improve overall policy pricing

How long to stay on parents' policy:

Most teens should stay on their parents' policy until:

• Age 20–25 (when rates drop significantly)
• They move to a different state or city permanently
• They buy their own car and move out
• Their driving record significantly affects parents' rates (multiple accidents)

Exception: If parents have a poor driving record (DUI, multiple accidents, high-risk status), a separate teen policy might actually be cheaper. Get quotes both ways to compare.

2. Earn a Good Student Discount

The single best discount for teens:

Maintain a B average (3.0 GPA) or higher to earn 10–25% off your premium.

How much you save:

• Typical discount: 10–25% (varies by insurer)
• Annual savings: $500–$1,500/year on a $5,000 premium
• Lifetime savings: $2,500–$7,500 over 5 years (ages 16–21)

How to qualify:

• GPA requirement: Usually 3.0 (B average) or higher
• Proof required: Report card, transcript, or honor roll certificate
• Resubmit annually: You'll need to prove continued eligibility at each renewal

Alternative qualifications:

• Dean's list or honor roll
• Top 20% of class
• SAT/ACT scores above a certain threshold (varies by insurer)
• National Honor Society membership

Which insurers offer it:

Nearly all major insurers offer good student discounts:

• State Farm: Up to 25%
• Geico: Up to 15%
• Progressive: "Good Student Discount"
• Allstate: Up to 20%
• Nationwide: Up to 15%
• USAA: Up to 10% (military families)

How long it lasts:

Good student discounts typically apply through age 24–25 as long as you're enrolled full-time and maintain the required GPA.

Pro tip: If you're close to the GPA cutoff, prioritize keeping your grades up—saving $1,000/year on insurance is worth the extra study time.

3. Complete a Driver's Education Course

Why driver's ed pays off:

Completing an approved driver's education course earns a 5–15% discount and makes you a safer driver.

Discount details:

• Typical savings: 5–15% off premium
• Annual savings: $250–$750/year on a $5,000 premium
• Lifetime savings: $1,250–$3,750 over 5 years

Types of driver's ed that qualify:

• High school driver's ed: In-class and behind-the-wheel training (most common)
• Approved private courses: Certified driving schools (check with your insurer for approved providers)
• Online courses: Some states and insurers accept online driver's ed

Requirements:

• Typically 30–50 hours of classroom instruction
• 6–10 hours of behind-the-wheel training
• Certificate of completion from an approved provider

Duration of discount:

Driver's ed discounts usually last 3–5 years or until age 21, depending on the insurer.

Bonus benefit: Many states require driver's ed for teens to get a license before age 18, so you're often taking the course anyway—might as well get the insurance discount.

4. Use Telematics (Safe Driving Apps)

What telematics programs do:

Telematics apps or plug-in devices monitor your driving behavior and reward safe habits with discounts of 10–30%.

How they work:

• Install the insurer's app on your phone or plug a device into your car's OBD-II port
• The app tracks: speed, braking, acceleration, cornering, phone usage, time of day, mileage
• Safe driving earns points; risky behavior loses points
• Your discount is recalculated every 6–12 months based on your score

Potential savings:

• Initial discount: 5–10% just for enrolling
• Safe driving discount: 10–30% after 3–6 months of good behavior
• Annual savings: $500–$1,500/year for high-performing drivers

Popular telematics programs:

• State Farm: Drive Safe & Save
• Progressive: Snapshot
• Allstate: Drivewise
• Geico: DriveEasy
• Nationwide: SmartRide
• Liberty Mutual: RightTrack

What's monitored (varies by program):

• Hard braking: Frequent hard stops lower your score
• Rapid acceleration: Jackrabbit starts count against you
• Speeding: Going >80 mph or >10 mph over the limit lowers score
• Phone use while driving: Texting/calling without hands-free hurts score
• Time of day: Driving late at night (midnight–4 a.m.) is higher risk
• Mileage: Lower mileage = lower risk = better score

Pro tip for teens: Telematics is especially valuable for teens because it provides objective proof that you're a safe driver—counteracting the statistical assumption that all teens are high-risk.

Privacy note: Your data is used solely for pricing. Insurers typically don't share it with third parties or use it against you in claims (unless you opt in to additional data sharing).

5. Drive a Safe, Low-Cost Vehicle

Vehicle choice dramatically affects teen insurance costs:

The car a teen drives is one of the top 3 factors determining premium. Safe, reliable, inexpensive cars cost far less to insure than sports cars or luxury vehicles.

Best vehicle types for low insurance:

• Midsize sedans (Honda Accord, Toyota Camry, Ford Fusion)
• Compact SUVs (Honda CR-V, Toyota RAV4, Mazda CX-5)
• Older, reliable models (5–10 years old)
• High safety ratings (IIHS Top Safety Pick)

Worst vehicle types (most expensive to insure):

• Sports cars (Mustang, Camaro, Charger)
• Luxury vehicles (BMW, Mercedes, Audi)
• High-theft targets (Honda Civic Si, Dodge Charger)
• Large trucks and SUVs with high repair costs

Cost difference:

• Teen driving a Honda Accord (2015): $3,500/year
• Same teen driving a Ford Mustang GT (2015): $6,000/year
• Savings with safer car: $2,500/year

Why vehicle matters:

• Repair costs: Luxury and sports cars cost more to fix
• Theft risk: High-theft vehicles cost more to insure (comprehensive coverage)
• Safety ratings: Cars with advanced safety features (automatic braking, lane assist) earn discounts
• Engine size: High-horsepower cars encourage speeding and risky driving

Best strategy: Choose a used, reliable sedan or compact SUV with strong safety ratings. Avoid anything with a V8, "sport" trim, or luxury badge.

6. Take a Defensive Driving Course

What is defensive driving?

A defensive driving course teaches advanced driving techniques, hazard avoidance, and safe decision-making beyond basic driver's ed.

Discount details:

• Typical discount: 5–10% off premium
• Annual savings: $250–$500/year
• Duration: 3 years (must retake to renew discount in most states)

How it works:

• Take an approved defensive driving course (online or in-person)
• Complete 4–8 hours of instruction
• Pass a final exam
• Submit certificate to insurer

Where to take it:

• Online: NSC.org, DefensiveDriving.com, Aceable, I Drive Safely
• In-person: Check with your local DMV or driving schools

Cost vs. benefit:

• Course cost: $20–$60
• Annual savings: $250–$500
• ROI: 400–2,500% return on investment

Bonus: In some states, completing defensive driving can also remove points from your license or dismiss a traffic ticket.

7. Maintain a Clean Driving Record

The most important factor long-term:

Nothing lowers insurance costs more than staying accident- and ticket-free.

Impact of violations:

• 1 speeding ticket: +20–30% premium increase ($800–$1,500/year)
• 1 at-fault accident: +30–50% premium increase ($1,200–$2,500/year)
• DUI: +80–200% premium increase ($3,200–$8,000/year) or policy cancellation

How long violations affect rates:

• Minor tickets (speeding): 3 years
• At-fault accidents: 3–5 years
• DUI/reckless driving: 5–10 years

Clean record rewards:

• Each year without an accident or ticket = 5–10% discount
• 3+ years clean = "good driver" discount (15–25% off)
• 5+ years clean = lowest possible rates for your age

Avoiding tickets:

• Drive the speed limit (use cruise control on highways)
• Come to complete stops at stop signs
• Don't tailgate or weave through traffic
• Use turn signals
• Avoid phone use while driving
• Don't drive aggressively or race other drivers

Avoiding accidents:

• Leave 3–4 seconds following distance
• Scan ahead for brake lights and hazards
• Drive defensively (assume others will make mistakes)
• Avoid driving in bad weather when possible
• Never drive distracted or impaired

8. Increase Your Deductible

Trade lower premiums for higher out-of-pocket:

Raising your deductible from $500 to $1,000 or $1,500 can save 15–30% on collision and comprehensive coverage.

Savings example:

• $500 deductible: $4,000/year premium
• $1,000 deductible: $3,400/year premium (15% savings = $600/year)
• $1,500 deductible: $3,000/year premium (25% savings = $1,000/year)

When this makes sense:

• Family has an emergency fund to cover the deductible
• Teen drives a used car (worth <$10,000) where a $1,000 deductible is manageable
• Teen has a strong safe driving record

When to avoid:

• No emergency savings
• New/expensive car where a claim is likely to be expensive
• Teen is a new driver with <1 year experience (higher accident risk)

For more guidance, see choosing the right car insurance deductible.

9. Drop Unnecessary Coverage

If the teen drives an older, low-value car:

Consider dropping comprehensive and collision coverage if the car is worth less than $3,000–$5,000.

Cost savings:

• Dropping comp + collision can cut premium by 40–60%
• Example: $4,000/year full coverage → $1,600/year liability-only
• Savings: $2,400/year

When this makes sense:

• Car is worth <$5,000
• Annual premium for comp/collision exceeds 10–15% of car's value
• Family can afford to replace the car out-of-pocket if totaled

When NOT to drop coverage:

• Car is financed or leased (lender requires full coverage)
• Car is worth >$8,000
• Teen is a new driver with higher accident risk

Keep liability coverage high: Never reduce liability limits. If a teen causes a serious accident, inadequate liability coverage can leave the family financially exposed. Aim for at least 100/300/100.

10. Compare Quotes from Multiple Insurers

Shop around—rates vary wildly:

Teen insurance quotes can differ by $2,000–$5,000/year between insurers for the exact same coverage.

How much you can save:

• Example: State Farm quotes $5,500/year; Geico quotes $3,200/year
• Savings: $2,300/year by switching

Best insurers for teen drivers (typically):

• USAA: Lowest rates for military families
• Geico: Competitive rates for teens with clean records
• State Farm: Good student and Drive Safe & Save discounts
• Progressive: Snapshot telematics, competitive pricing
• Nationwide: Vanishing deductible, good bundling discounts

How to compare:

• Use online comparison tools (e.g., Coverwise.io)
• Get quotes from 4–5 insurers
• Compare identical coverage limits (don't just look at price—ensure you're comparing apples to apples)
• Ask about all available discounts

When to shop:

• Before adding a teen to your policy
• Every 6–12 months (rates and discounts change)
• After the teen's birthday (rates drop with each year of age)
• After completing driver's ed or earning good grades

11. Bundle Home and Auto Insurance

Multi-policy discount:

Bundling auto and home (or renters) insurance with one carrier saves 10–25% on both policies.

Savings:

• Auto premium: $5,000/year → $4,250/year (15% off)
• Home premium: $1,500/year → $1,275/year (15% off)
• Total savings: $975/year

How to maximize:

• Bundle parents' home and all family vehicles with one insurer
• Consider adding teen's renters insurance (if they go to college) for additional bundling discounts

Best for: Families who already have home insurance—adding teen driver to the bundled policy amplifies savings.

Stacking Discounts: Maximum Savings Example

Baseline: Teen driver, age 17, $6,000/year premium

Apply all strategies:

• Stay on parents' policy: Save $3,000/year vs. separate policy
• Good student discount (20%): Save $1,200
• Driver's ed (10%): Save $600
• Telematics (15%): Save $900
• Safe vehicle choice: Save $1,000 vs. sports car
• Higher deductible ($1,000 vs. $500): Save $500
• Multi-policy bundle (15%): Save $900

New annual premium: ~$2,400/year (vs. $6,000+ baseline)

Total savings: $3,600/year

Over 5 years (ages 16–21), these strategies save $18,000+—enough to pay for a used car or college tuition.

Frequently Asked Questions