Are you a young driver, and you want to learn how you can lower your car insurance premium? You are on the right page! The highlights of this post are:
- What is Car Insurance Premium?
- What Determines the Rate of Car Insurance Premiums For Young Drivers.
- 15 Tips on How to lower car insurance premiums for young drivers.
- Start as an occasional driver of your parents’ car.
- Bundle your insurance policies.
- Get the right driver training.
- Prove you are a good driver.
- Accept a higher deductible to lower car insurance premiums for young drivers.
- Choose the right car.
- Reach out to your insurance company before buying your vehicle
- Use Public Transit.
- Shop for Better Premiums Around.
- Do Away With Coverage You May Not Need to Lower Car Insurance Premiums for Young Drivers.
- Replace Your Tires Seasonally
- Maintaining Good Credits Can Lower Car Insurance Premiums for Young Drivers.
- Some Frequently Asked Questions – How to Lower Car Insurance Premium for Young Drivers
An expensive car insurance premium is a challenge many young drivers face. Have you ever pondered on why it is that high or how to lower car premiums for young drivers?
This article answers these questions. At the end of this article, if you’ve been experiencing a high insurance premium, you’ll be familiar with seven different ways you can get it reduced. You don’t have to break the bank to get your car insured. Read on!
What is Car Insurance Premium?
In the world of auto insurance, a “car insurance premium” is the amount of money you pay to an insurance company to cover your vehicle’s insurance. Depending on your policy, your insurance premium can be paid monthly, semiyearly, or yearly.
What Determines the Rate of Car Insurance Premiums For Young Drivers?
- Experience and a Good Driving Record
These two are major factors that determine how high or low car insurance rates are. In other words, the higher your level of experience, the lower your insurance premium. Insurance companies also base their rates on large risk factors, so very few or no accident claims or traffic-related criminal convictions or violations will bring down your car insurance quotes. It will be easier to lower car insurance premiums for young drivers if this box can be checked.
In the field of auto insurance, you are regarded as a young driver if you are below the age of 25. Compared to older drivers, younger drivers generally have less experience. Also, figures show that young drivers have extremely high involvement in accidents and have a higher probability of driving recklessly. Therefore, young drivers are viewed as “high-risk” drivers and pay a higher amount for insurance than older drivers.
The table below sheds more light on this:
| Age: | Age: Male | Age: Female | Age: Total | Male Licensed Drivers: | Female Licensed Drivers: | Total Licensed Drivers: | Male Drivers In Collisions: | Female Drivers in Collisions: | |
| Under 16 | 0 | 0 | 0 | 33 | 11 | 44 | N/A | N/A | N/A |
| 16 | 44,293 | 41,327 | 85,620 | 517 | 417 | 934 | 1.17% | 1.01% | 1.09% |
| 17 | 58.613 | 53,429 | 112,042 | 2,748 | 1,924 | 4,672 | 4.69% | 3.60% | 4.17% |
| 18 | 68,515 | 62,003 | 130,518 | 3,575 | 2,463 | 6,038 | 5.22% | 3.97% | 4.63% |
| 19 | 76,407 | 68,944 | 145,351 | 4,106 | 2,610 | 6,716 | 5.37% | 3.79% | 4.62% |
| 20 | 80,749 | 72,485 | 153,234 | 4,262 | 2,712 | 6,974 | 5.28% | 3.74% | 4.55% |
| 21-24 | 339,473 | 310,604 | 650,077 | 18,837 | 12,937 | 31,774 | 5.55% | 4.17% | 4.89% |
| 25-34 | 838,279 | 818,633 | 1,656,912 | 43,520 | 29,047 | 72,567 | 5.19% | 3.55% | 4.38% |
| 35-44 | 843,159 | 843,029 | 1,686,188 | 40,909 | 27,716 | 68,625 | 5.00% | 3.29% | 4.07% |
| 45-54 | 976,587 | 927,305 | 1,903,892 | 45,135 | 26,932 | 72,067 | 5.35% | 2.90% | 3.79% |
| 55-64 | 822,321 | 769,550 | 1,591,871 | 32,366 | 17,332 | 49,698 | 3.49% | 2.25% | 3.12% |
| 65-74 | 530,219 | 483,423 | 1,013,642 | 15,830 | 8,759 | 24,589 | 2.06% | 1.81% | 2.43% |
| 75+ | 309,789 | 264,908 | 574,908 | 8,472 | 4,872 | 13,344 | 2.73% | 1.84% | 2.32% |
| Unknown | 0 | 0 | 0 | 41,983 | 0 | 41,983 | N/A | N/A | N/A |
| Totals | 4,988,404 | 4,715,640 | 9,704,044 | 262,293 | 137,732 | 400,025 | 5.26% | 2.92% | 4.12% |
Do you fall between the ages of 16-24? Not to worry, an insurer has the power to bring down the insurance costs of a young driver!
- Where You Reside
Car insurance premiums differ highly depending on where you live. It’s possible for two people living in different neighborhoods in the same city to pay considerably different insurance premiums. Insurers consider location-bound risk and claim histories when calculating premiums.
It may be tough to lower car insurance premiums for young drivers who live in a place with a long history of claims and many dangers. If you live in an area known for high population density, high traffic density, high crime rates, e.t.c, it will reflect on your premiums. Moving to low-risk areas will lower the odds of your car being stolen or incurring damage, therefore lowering your insurance rates.
- Your Gender
Like young drivers, male drivers pay more on premiums because, records show they are more likely to be involved in an accident. Male drivers pose a higher insurance risk because statistically, they are more likely to practice hazardous behaviours like over-speeding, drunk driving, or not wearing seat belts.
- Your Insurance Company and Policy
There are several ways your choice of an insurance company can affect your premiums. Each insurer has different options and plans available. You may be qualified for special rates and discounts if you’ve been with the same insurance company for years or if you insure multiple products with the same insurer.
Now that we know the factors that determine insurance premiums, it’s time to know how to get the best rates. Read on! You are about to learn in detail some tips that will teach you how to lower car insurance premiums for young drivers.
Before we begin, let’s have a quick rundown of these 15 great tips that are sure to help you lower your car insurance premium
- Start as an occasional driver of your parents’ car
- Bundle your insurance policies
- Get the right driver training
- Prove you are a good driver
- Accept a higher deductible
- Choose the right car
- Reach out to your insurance company before buying your vehicle
- Use Public Transit
- Shop for Better Premiums Around
- Do Away With Coverage You May Not Need
- Replace Your Tires Seasonally
- Maintain Good Credits
1. Start as an Occasional Driver of Your Parents’ Car
After you obtain your license, before getting your first car, why not try to get insured on your parents’ policy as an occasional driver first? It is a sure way to lower car insurance premiums for young drivers. You can save money, gain some experience, and develop a good driving record. By the time you finally buy your car and get insured as a principal driver, your record as a safe driver will help you get a lower insurance premium.
2. Bundle Your Insurance Policies
You can bring down your insurance premiums if you merge your auto insurance with your other insurance coverage. The same insurer that covers your motorcycle, ATV, home insurance, etc. can be entrusted with your car insurance. Most insurance companies offer discounts in some provinces if you bundle all your policies with them. So, you will get a lower car insurance premium, and your family can save money on their insurance costs if you have all your policies with the same insurer.
3. Get the Right Driver Training
Signing up for an accredited driving course in your province and completing it helps to lower car insurance premiums for young drivers. It will earn you a discount with the insurance company. Ensure that the driver training course you offer is government-approved in your province because each province has its own criteria. Getting good grades in school can also earn you a student discount with some insurance companies.
4. Be a Safe Driver
Being a safe driver can lower car insurance premiums for young drivers. In other words, practice mindful driving. This point should not even need to be mentioned, but with the rising level of in-car go distractions present today, we have to emphasize it as much as possible. The more careful or mindful you are, the more you’ll prevent accidents or traffic violations- activities that raise your car insurance premiums. Drivers are assigned points for driving violations, and the more points you have, the more your insurance premium increases. Many insurers offer safe driver discounts ranging from 10% to 23%, based on your driving record.
5. Prove You are a Good Driver
Getting telematics is a proven tip that answers the “how to lower car insurance premiums for young drivers?” question. It monitors your behavior behind the wheels and can help you prove you are a good driver and earn you a discount on your insurance premium. You can sign up for the telematics device to be installed in your car or install a telematics phone app provided by your insurer on your phone.
The technology will assess the time of day you drive, how long you drive, your acceleration rates, how you take brakes, and make turns. The data collected will determine if you are a good driver, and you can enjoy up to a 30% discount on your rates.
6. To Lower Car Insurance Premiums for Young Drivers, Accept a Higher Deductible
The deductible is the highest amount of money you will pay in the event of a claim before your insurer covers the rest. One of the easiest answers you can get to how to lower car insurance premiums for young drivers is by accepting a higher amount for the deductible. This means a $1000 deductible will attract a lower insurance premium compared to a $600 deductible.
The higher your deductible, the lower your insurance premium becomes. Understanding this simple logic teaches you how to lower car insurance. However, before going ahead, you need to be sure you can pay this amount if you make a claim.
7. Choose the Right Car
When making your choice on what car to get, you should know that the type of car you drive will determine your car insurance rates. How do you determine the right car?
Here are some things you should look out for when shopping for your car:
- Pick a green vehicle
Green vehicles are environmentally-friendly vehicles. They burn less fuel and cause less harmful effects on the environment compared to the Internal Combustion Engine (ICE) vehicles. They include electric and hybrid vehicles. Most insurance companies offer an extra discount of up to 20% to drivers of green vehicles. So, buying one can help lower car insurance premiums for young drivers. However, these types of vehicles are more costly to buy.
- Choose a vehicle that is less expensive to purchase or repair
The less costly your car is, the lower the insurance premium will be. If you buy an affordable vehicle without a car loan, you might need just a third party liability coverage. It makes your insurance premium much lower.
Also, research the cost of repairing the car. A car that is expensive to repair will cost more to insure because the insurer will have to pay higher benefits in the event of a claim.
- Avoid theft attractors
One factor that increases the cost of insurance premium is the risk of theft. So, it is advisable to avoid cars that draw a lot of attention like convertibles, sports cars, collectibles, modified or one-of-a-kind cars, etc. They can also draw unwanted attention.
No matter the car you buy, make sure you install an anti theft device. Apart from securing your car, it can decrease insurance premium, especially if you have theft coverage.
8. Reach out to your insurance company before buying your vehicle
Even for cars that belong to the same category, their insurance premiums may differ from one car model to the next. You’ll know the cost of insurance premiums in advance if you contact your insurance agent before shopping for a car. This can guide you in selecting your vehicle and helps you avoid exceeding your budget.
9. Use Public Transit
Using mass transit to commute can help to lower car insurance premiums for young drivers. When you sign up for insurance coverage, the insurance company will usually begin with a questionnaire. One of the questions you might be asked will be the number of miles you will drive the insured vehicle yearly.
If you use your vehicle to travel back and forth three hours every day, you will pay a higher insurance premium than someone who only drives one mile in a day. If feasible, try to use public transport to cover fewer miles so you can decrease your mileage considerably and get a discount. You can ask your insurer about the company’s several mileage limits, so you don’t waste your efforts.
10. Shop for Better Premiums Around
You can get lower car insurance premiums for young drivers if you shop around for rates. If you are about to renew your insurance policy and your annual premium has gone up considerably, shopping around and getting competing companies’ insurance quotes is a good step. Besides, it’s advisable to get quotes from other insurers at minimum every year so you can be aware if there’s a lower rate out there.
However, always remember that cheap doesn’t always mean good, and going with the more affordable insurer isn’t always the best decision. It would help if you also considered the insurance company’s credibility. Think about it, how good is a “lower-priced insurance policy” if the insurer doesn’t have the resources to pay an insurance claim?
To run a background check on an insurance company, you can check out a website that assesses insurance companies’ financial strengths. Knowing your insurer’s financial stability is essential, but knowing your contract’s coverage is also very important, so ensure you comprehend it.
11. Explore Additional Discounts
You’ll be surprised at how easy it is to lower car insurance premiums for young drivers by simply asking a question. Insurance companies provide a range of discounts. These discounts can help to lower car insurance premiums for young drivers. Ask your insurer and look out for offers such as these:
- Deals to let you pay the complete yearly or six-month premium at once
- Agreements to get electronic bills and documents
- Memberships in specific organizations that offer discounts
However, do not be carried away by a long line of possible discounts. Compare discounts and regular costs from multiple insurance companies.
Explore Additional Discounts
Insurance companies provide a range of discounts. Look out for offers such as these:
Deals to let you pay the complete yearly or six-month premium at once
Agreements to get electronic bills and documents
Memberships in specific organizations that offer discounts
However, do not be carried away by a long line of possible discounts. Compare discounts and regular costs from multiple insurance companies.
12. Do Away With Coverage You May Not Need
You may not need all the coverage options in a policy, for instance, car rental coverage and roadside assistance. Review your insurance policy and request about discarding anything you don’t need.
Another way this could work is if you drive an old vehicle. Optional coverages like comprehensive and collision benefits may not make sense for an old car. It would help if you weighed the cost of these coverages with your car’s value and your deductibles. Look at this; if your vehicle is only worth $1,000, it might not be worth it to pay for coverage that has a $1,000 deductible.
13. Use Your Student Status
Taking advantage of student status can help to lower car insurance premiums for young drivers. If you’re studying at the university or a CEGEP, you may be able to get a discount on your car insurance. However, it involves some restrictions, so be sure to discuss with your insurer to find out what offers you can get.
14. Replace Your Tires Seasonally
A winter tire discount can help you save up to five percent on your rates and drivers who use winter tires can enjoy it. It’s better to be prepared, safe, and save!
15. Maintain Good Credits
Having a solid credit history and promoting it can help to lower car insurance premiums for young drivers. Most insurance companies use credit record to price car insurance policies. Research shows that people who competently manage their credit have fewer claims. So to guard your credit standing, pay your bills on time, don’t take more credit than you need and keep your credit balances as low as you can.
Some Frequently Asked Questions – How to Lower Car Insurance Premium for Young Drivers
Does car insurance go down after 6 months?
If you have a past infringement that will expire in the next 6 months, your car insurance rates could go down if you maintain a good driving record free of accident or traffic violations. The 6-month car insurance policy can also help drivers who are about to pay off a car loan and improve their credit.
Does car insurance go down after car is paid off?
Once your car loan is completely paid off, and you are debt-free, your car insurance premiums will likely drop. You will be able to control how much your insurance costs after you offset your loan.
When should you remove full coverage on your car?
A good time to drop your car’s full coverage is when your annual full-coverage payment becomes 10% of your car’s total value.
How much is a 6 month premium car insurance?
The average yearly cost of car insurance is $1,548. Therefore, calculating the six-month policy would give $774. The monthly cost would be $129.
Does AAA lower car insurance?
AAA lowers car insurance for members. A membership discount of up to five percent is given off car insurance rates in some places. The loyalty discount is determined by the number of full years you have kept your membership with AAA before opting for its auto insurance.
How much does car insurance cost per month for a 16 year old?
An analysis of over a dozen auto insurance quotes for 16-year-old drivers showed that insurance companies charge up to to $1,700 per month for a teen to get their auto insurance policy. The boys were paying about 16% more than girls.
Which is the most expensive insurance group?
Thatcham Research administers The Group Rating Panel. The panel designates new car models to an insurance group from group 1 (the least expensive to insure) to group 50 (the most expensive to insure). Cars in the highest groups, usually high-performance models, usually cost insurance companies the highest insurance claims.
Why are electric cars so expensive to insure?
Insurance companies increase electric car premiums due to their higher cost price, need for specialist gadgets and repairs, and inadequate driver behaviour data. As more drivers go for electric vehicles, professionals predict that the auto insurance market will undergo a level of correction.
Why is Tesla car insurance so high?
Teslas are expensive to insure largely because it is expensive to repair them. According to valuePenguin, their collision coverage costs between 57% and 65% of a policy’s cost. Tesla insists that it can provide less expensive policies because it knows more about its cars, technology, and repair procedure. However, it might not be the best choice if the goal is to lower car insurance premiums for young drivers.
What is the cheapest car to insure?
The top 8 cheapest cars to insure in 2020 are Volkswagen Up!, Nissan Micra, Skoda CITIGO-eiV, Hyundai i10, Fiat Panda, Smart EQ ForFour, Ford Fiesta, and SEAT Ibiza. If you are looking to lower car insurance premiums for young drivers, you can consider buying one of these.
There you have it! 15 effective strategies to lower car insurance premiums for young drivers. Now that you know these tips, make sure you do proper research and entrust your services to a credible insurance company.
Check how you can get the highest settlement amount from an insurance claim in case of a crash.
Sign up for our newsletter below to get more tips like this firsthand on insurance in Canada.
