Car insurance for a teen driver can be expensive, but there are several legitimate ways to reduce the cost. For many families, the biggest savings opportunities come from adding the teen to an existing family policy, comparing quotes from multiple insurers, qualifying for student or driver-training discounts, and choosing a vehicle that is relatively inexpensive to insure.
The goal should not simply be to buy the cheapest policy available. A better approach is to find the lowest price for coverage that provides the protection your family actually needs. State requirements, insurer rules, vehicle ownership, and lender requirements can all affect your options.
Key Takeaways
- Adding a teen to a parent’s or household policy is often less expensive than buying the teen a separate policy, when the insurer’s eligibility rules allow it.
- Good-student, driver-training, student-away, multi-vehicle, low-mileage, and telematics programs may reduce the cost, but requirements vary by insurer and state.
- The car assigned to the teen can have a major effect on the premium, so get insurance quotes before buying or assigning a vehicle when possible.
- Compare the final price for equivalent coverage rather than reducing liability limits or dropping important coverage simply to obtain the lowest advertised premium.
The Best Ways for Teens to Save on Car Insurance
| Strategy | Why It May Help | What to Check |
|---|---|---|
| Add the teen to a family policy | Often costs less than a separate teen policy | Household-driver and vehicle-assignment rules |
| Compare several insurers | Companies can price the same teen very differently | Use the same limits and deductibles on every quote |
| Ask about student discounts | Good grades or being away at school may qualify | Age, grades, enrollment, distance, and documentation rules |
| Choose the vehicle carefully | Vehicle value, repair costs, safety characteristics, and claims history can affect premiums | Get a quote for the exact vehicle before buying when possible |
| Consider telematics | Safe driving may qualify for better pricing | What data is collected and whether results can increase as well as decrease rates |
| Adjust deductibles | A higher collision or comprehensive deductible may reduce the premium | Make sure the family could afford the deductible after a claim |
1. Start With the Parents’ or Family Auto Policy
For a teen who lives with a parent or guardian, adding the teen to an existing household auto policy is often less expensive than purchasing a separate policy. The National Association of Insurance Commissioners and state insurance regulators have both identified this as a common way to reduce the cost of insuring a young driver.
That does not mean every teen can automatically be added to every policy. Insurer rules vary, and companies may have specific requirements regarding household members, vehicle ownership, where the vehicle is kept, and who regularly drives each car.
Parents should tell the insurer when a teen begins driving and ask when the teen needs to be formally listed on the policy. Do not assume a teen can simply drive a household vehicle without being disclosed to the insurance company.
2. Compare Quotes From Several Insurance Companies
Shopping around can be especially important when adding a young driver because insurance companies do not all price teen drivers the same way. An insurer that was inexpensive before adding a teenager might not remain the least expensive afterward.
For a meaningful comparison, request quotes using the same:
- Drivers and vehicles
- Liability limits
- Collision and comprehensive deductibles
- Uninsured/underinsured motorist coverage
- Medical payments or personal injury protection, where applicable
- Optional coverages such as rental reimbursement or roadside assistance
Otherwise, a quote may appear cheaper simply because it provides less protection. You can compare car insurance quotes and then examine the coverage details of the options you are considering.
3. Ask About a Good Student Discount
Good-student discounts are one of the most common savings opportunities for teen drivers. However, there is no universal GPA requirement that applies to every insurance company.
Some insurers use a B average or a 3.0 GPA as a qualifying standard, while others may accept class rank, honor-roll status, standardized test results, or other academic criteria. Age and full-time enrollment requirements can also apply.
For example, State Farm currently advertises a good-student discount for qualifying students who meet its academic requirements, while GEICO also offers a good-student discount to eligible full-time students. Requirements and availability can vary by state. State Farm also runs Steer Clear, a training program that can earn drivers under 25 a discount in most states.
Parents should ask what documentation is required. An insurer may request a report card, transcript, dean’s list or honor-roll record, or another form of proof.
4. Check for Driver-Training Discounts
Completing an approved driver education or training course may qualify a young driver for a discount with some insurers. The course, age limit, and eligibility rules vary, so confirm that the specific program qualifies before paying for a course solely to obtain an insurance discount.
A driver-training discount is different from a good-student discount. A teen may potentially qualify for both if the insurer allows the discounts to be combined.
5. Choose the Teen’s Car Carefully
The vehicle can make a substantial difference in what a family pays for auto insurance. Insurers can consider factors such as a vehicle’s value, repair costs, safety characteristics, theft experience, performance, and historical claims costs when setting premiums.
This means the cheapest car to buy is not necessarily the cheapest car to insure.
If you’re shopping for a vehicle for a teen, identify a few possible models and request insurance quotes for the exact vehicles before making the purchase. Supplying the VIN will generally give the insurer the most accurate vehicle information.
RateFrog’s guide to the factors that influence auto insurance rates explains more of the information insurers may consider.
6. Consider a Higher Deductible
Choosing a higher deductible on collision or comprehensive coverage can reduce the premium. In return, the family takes responsibility for a larger portion of a covered loss.
For example, moving to a higher collision deductible might lower the insurance bill, but that higher amount could become due unexpectedly after an accident. Choose a deductible that the household could realistically pay without creating a financial emergency.
Remember that liability coverage generally does not use the same type of deductible. Raising a collision or comprehensive deductible is different from lowering your liability limits.
7. Think Carefully Before Dropping Collision or Comprehensive
For an older, low-value vehicle that is owned outright, it may be worth comparing the cost of collision and comprehensive coverage with the amount the insurer could potentially pay after a covered total loss.
However, dropping these coverages should not be an automatic teen-insurance savings strategy. Collision generally helps pay for damage to your own vehicle after a covered crash, while comprehensive generally covers qualifying non-collision losses such as theft, hail, fire, vandalism, or falling objects.
If the vehicle is financed or leased, the lender or leasing company will commonly require physical-damage coverage. Even when the car is paid off, consider whether your family could afford to repair or replace it without an insurance payment.
For more detail, see RateFrog’s explanation of the difference between minimum and so-called full coverage auto insurance. “Full coverage” is an informal term rather than a standardized insurance policy.
8. Look at Usage-Based Insurance Carefully
Usage-based insurance, sometimes called telematics insurance, uses an app, connected vehicle, or other device to collect information about driving. Depending on the program, this can include mileage, braking, acceleration, speed, time of day, cornering, or phone use while driving.
A teen who drives carefully and relatively little may benefit from some programs. But telematics should not automatically be described as a guaranteed discount.
Program rules differ. Progressive, for example, states that its Snapshot program can produce a personalized rate based on driving behavior and that high-risk driving may increase rates in many states. Other insurers structure their programs differently.
Before enrolling, ask:
- What driving behaviors are monitored?
- Is location data collected?
- Can the program increase the premium, or only reduce it?
- How long is driving behavior monitored?
- How is the collected information used?
9. Keep the Driving Record Clean
Driving history is an important insurance rating factor. Accidents, claims, and traffic violations can affect what a driver pays, depending on the insurer and state.
For a new driver, the most useful long-term strategy is also the simplest: follow traffic laws, avoid distracted driving, respect graduated-driver-license restrictions, and develop safe driving habits from the beginning.
10. Ask for Every Teen and Household Discount Available
Good-student discounts are only one possibility. Depending on the insurer, state, and household, families may qualify for other savings such as:
- Multi-vehicle discounts for insuring multiple qualifying vehicles with the same company.
- Multi-policy discounts for combining auto insurance with homeowners, renters, condo, or another eligible policy.
- Driver-training discounts for eligible young drivers who complete an approved course.
- Low-mileage discounts or pricing for drivers who travel relatively few miles.
- Student-away-at-school discounts for qualifying students who attend school away from home without regular access to a covered vehicle.
- Safe-driver discounts after meeting an insurer’s accident- and violation-free requirements.
- Payment or paperless discounts offered by some insurers.
RateFrog’s guide to car insurance discounts covers additional savings worth asking about.
11. Ask About a Student-Away-at-School Discount
This can become useful when an older teen goes to college. Some insurers offer a discount when a qualifying student attends school away from home and does not regularly have access to one of the household vehicles.
Do not simply remove a college student from the family’s policy because they moved away. Tell the insurer where the student lives, whether they take a car with them, and how often they drive household vehicles. The insurer can explain how those circumstances affect the policy.
12. Don’t Assume Minimum Coverage Is the Best Way to Save
Choosing lower liability limits can reduce a premium, but it also leaves less insurance available if the insured driver causes a serious accident. State-required minimum coverage is a legal floor, not necessarily the amount of insurance a household should carry.
Families should consider their financial exposure, vehicles, assets, budget, applicable state requirements, and ability to pay after an accident before changing limits solely to reduce the premium.
When comparing quotes, start with the same limits across insurers. Once you know which companies are competitively priced, you can evaluate whether changing coverage makes sense separately.
13. Understand How Credit-Based Insurance Scores Work
The original advice often given to teens is to “build your credit to lower your car insurance.” The reality is more complicated.
In states where it is permitted, insurers may use a credit-based insurance score as one of several underwriting or rating factors. A credit-based insurance score is not the same thing as the credit score a lender uses when deciding whether to approve a loan.
State laws place significant restrictions on how insurance credit information can be used, and some states prohibit or substantially limit its use. For a teen covered under a parent’s policy, credit is therefore not a simple or universal short-term strategy for lowering the teen’s premium.
14. Review the Policy as the Teen’s Situation Changes
A teen’s insurance situation can change quickly. Review the policy when the driver:
- Gets a full driver’s license
- Begins driving a different vehicle regularly
- Moves away for college
- Takes a vehicle to another city or state
- Starts driving substantially more or fewer miles
- Qualifies for a new student or safe-driver discount
Keeping the policy information accurate can help make sure the household receives applicable discounts while avoiding problems caused by an undisclosed driver or incorrectly garaged vehicle.
15. Re-Shop the Policy Periodically
The insurer that offers the lowest price when a teen first gets licensed may not remain the most competitive as the driver’s age, experience, driving record, vehicle, mileage, and household circumstances change.
Re-shopping does not necessarily mean switching every renewal. It simply gives you a current comparison. When checking alternatives, compare the final premium after discounts using equivalent coverage rather than focusing on an advertised discount percentage.
Tips for 16-, 17-, and 18-Year-Old Drivers
The basic savings strategies are similar at each age, but insurance circumstances can change as a teen moves from a learner’s permit to a license and eventually gains more driving experience.
- Age 16: Parents should ask the insurer when a learner or newly licensed driver needs to be added and whether driver-training or student discounts are available. See our guide to finding cheaper car insurance at age 16.
- Age 17: Continue checking good-student eligibility, vehicle assignment, mileage, and competing quotes. RateFrog also covers ways for a 17-year-old to save on car insurance.
- Age 18: An older teen may have new options or circumstances involving college, work, vehicle ownership, or where the car is kept. See our guide to saving on car insurance at age 18.
Frequently Asked Questions
Is It Cheaper for a Teen to Be on a Parent’s Car Insurance?
Often, yes. Consumer guidance from the NAIC and state insurance regulators notes that adding a young driver to an existing family policy is generally less expensive than buying a separate policy for the teen. Actual pricing depends on the insurer, vehicles, drivers, location, coverage, and other rating factors.
What GPA Do You Need for a Car Insurance Discount?
There is no universal GPA requirement. A B average or approximately 3.0 GPA is common among some insurers, but companies may use different academic standards and proof requirements. Ask the specific insurer what qualifies.
What Is the Cheapest Car for a Teen to Insure?
There is no single vehicle that is cheapest for every teen. Insurance pricing depends on the exact vehicle as well as the driver, location, coverage, deductibles, and insurer. Instead of relying on a generic list, request quotes for the specific vehicles you are considering before purchasing one.
Can a Telematics Program Make a Teen’s Insurance More Expensive?
Potentially. Some programs primarily provide discounts, while others may use collected driving data to increase or decrease future pricing depending on the insurer, program, state, and driving behavior. Read the program terms before enrolling.
Should a Teen Carry Only the State Minimum Insurance?
Not automatically. State minimum requirements establish the amount or types of insurance required by law, but those limits may not provide enough protection for every household. Consider potential liability exposure and the family’s finances before reducing coverage simply to lower the premium.
The Bottom Line
For many teen drivers, the most effective way to find cheaper car insurance is to start with the family policy, request quotes from several insurers, choose the vehicle carefully, and ask specifically about good-student, driver-training, student-away, low-mileage, multi-vehicle, and telematics savings.
At the same time, don’t reduce coverage blindly just to reach the lowest possible premium. Compare equivalent policies first, understand what each coverage does, and then decide which combination of price, limits, deductibles, and protection fits the household.
Sources
- National Association of Insurance Commissioners: Insuring a Teen Driver
- National Association of Insurance Commissioners: Credit-Based Insurance Scores
- Texas Department of Insurance: Adding a Teen Driver to Your Insurance Policy
- Texas Department of Insurance: Usage-Based Insurance
- State Farm: Auto Insurance Discounts
- Progressive: Snapshot FAQ