Saving Money When Adding a New Driver to Your Auto Insurance Policy
Posted by David Schneider | December 3, 2007

It's that dreaded moment in every parent's life — the day your child gets his or her driver's license. Yes, your child is growing up and becoming independent, and part of that process means navigating the hectic streets and highways without supervision. It's a great time for junior, but for parents it means increased insurance premiums.

Of course, you could attempt to teach your child further responsibility by requiring him or her to pay a portion of the insurance bill, but either way you're going to want to save as much money as possible. Here are some tips for saving money when adding a new driver to your insurance policy:

Take Advantage of Student Driver Discounts

Prepare yourself for sticker shock — auto insurance premiums for new drivers are substantially higher than what you're likely paying for yourself. Obviously, this is because young drivers are inexperienced and therefore more likely to get in a car accident.

To help ease the sting a bit, many auto insurance providers offer "good student" discounts. Typically, to qualify for the discount your child must be enrolled in school full-time and maintain at least a B average. Both high school and college students are eligible. If your young scholar meets these criteria, then you can expect to save up to 10 percent on your child's auto insurance premium. In most cases, a copy of your teenager's latest report card will be requested by the insurance provider in order to be eligible to receive the student discount.

Choose Your Child's First Car Wisely

Despite the protests of your child, a safe, sensible car is likely a smart choice for a first car. While teenagers may play the "social outcast" card, a less flashy car can save you plenty of money on your insurance policy. Sports cars, expensive cars and SUVs are usually considered higher risk vehicles, and therefore come with higher insurance premiums. For the most savings, help your child select a sedan or compact car that includes a multitude of safety features (and still matches his or her unique style). A car with airbags, anti-lock brakes, stability control and excellent crash test ratings will not only save you money, but it may even save your child's life.

Take Measures to Deter Theft of the New Vehicle

Vehicles that are less likely to get stolen are more likely to save you money on your auto insurance premiums. Adding a security system or a tracking system (such as lo-jack) to your teenager's vehicle will help to put your insurance company at ease. Also, if you have a garage, you might be able to take advantage of additional savings. Vehicles that are parked in a home garage are less likely to get stolen, and insurance providers often will reward you with a discount for doing so.

Shop Around for a New Auto Insurance Provider

It is recommended that you re-evaluate your insurance options every year or two. With a new driver coming onto your policy, now is the perfect time to shop around for better rates. Not only might you be able to save a decent chunk of change on your teenager's portion of the policy, but you may find extra savings on your own coverage as well. Call several different well-known companies and ask them for price quotes. You might also want to consider asking friends and family for suggestions on insurance providers that offer good rates to teenagers.