Cheap car insurance is something many young drivers look out for when they pass their driving test. Whilst it may seem difficult to get a low-cost car insurance quote for drivers under 25, there are ways to save – you just need to know what to look for.
A driver’s age is often correlated with driving experience, and along with gender, these three factors have a huge impact on your car insurance premiums. In general, the younger you are and the less your driving experience, the higher the likelihood of you getting into a collision. The statistics back this up.
Considered the riskiest age group to insure, motorists aged 16 to 19 years old are almost three times more likely to get into fatal car accidents per miles driven than any other age group. This is despite teen drivers accounting for just 4% - the smallest demographic – of the entire driving population in the US. These are what the numbers from the latest fatality facts report from the Insurance Institute for Highway Safety (IIHS) reveal. Data from the institute also shows that male drivers account for more than two-thirds, or 68%, of the overall teen crash fatality rate.
However, you will notice that your car insurance premium begins to drop after your 25th birthday. This will continue as you get older, as long as you have a clean driving record, and if you maintain a good auto insurance score. Your premiums will continue to go down until you reach senior age when your rates start to gradually increase again. This is primarily because of age-related impairments rather than your driving habits.
But what can you do to get the best valued insurance as a new driver?
To help you understand what some of the best strategies are, we have taken a look at some ways that you could save money on your car insurance…
Choose The Right Car
Think very carefully and carry out some research about the type of car that you want before you commit to making the purchase. The make and model of a vehicle are just two of the many things factored into an insurance quote. Every vehicle is put into an ‘insurance group’ numbered from 1 to 50. For example, a powerful, expensive, and rare car will sit in a higher group, increasing the insurance costs. It is always worth checking out the insurance groups of the different cars that you are considering before making a final decision; it could end up saving you hundreds of dollars.
Below is CNN's list of the cheapest cars to insure in 2024:
Consider How Much You Will Be Driving
Insurance prices are based on the likelihood of you having to make a claim. Unfortunately, this can be quite high for young drivers because of a lack of experience on the roads. If you do not mind having your driving behavior tracked, consider usage-based or pay-per-mile insurance to lower your car insurance costs. To participate, you use an app or install a small device in your car that transmits data to the insurance company. Metromile, Allstate, Nationwide and Mile Auto all offer pay-per-mile insurance in certain states; with this coverage, you typically pay a base rate plus a per-mile rate. So if you do not drive long distances or commute daily, it could be a good option.
Several other insurers, including State Farm, Progressive, Safeco and Travelers, offer usage-based insurance programs that track behaviors like speeding and hard braking. They offer discounts or reduced rates for safe driving. It is possible to get a discount just for signing up for some of these programs, so they might seem like a no-brainer. However, some insurers may increase your rates if you are deemed an unsafe driver. Make sure to check what behaviors are tracked and how your rate is affected before enrolling.
These devices will monitor how you drive on every journey – drive well, and you could see your insurance premium come down at renewal.
Do Extensive Research
If you are insuring your own car, your first thought may be to head over to a comparison site. Likewise, if you are a parent looking to get your child covered on your current policy, you may think it is best just to call your own insurance company, but this may not be the most suitable way to get your teen covered. The best deals might not always be on comparison sites either, so make sure you check out direct sites and ask friends for recommendations.
It is also worth remembering this: it’s not all about the price. Choose an insurance provider who you can trust to help you if you need to make a claim. Checking out their ratings on an independent review site, like trustpilot, is a great way to help you decide. After all, paying a little bit more for peace of mind is worth it.
Improve Your Credit Score
Your credit can be a big factor when car insurance companies calculate how much to charge. It can count even more than your driving record in some cases. But this is not Sthe case in California, Hawaii, Massachusetts and Michigan, however, where insurers are not allowed to consider credit when setting rates.
To build your credit, focus on these three steps:
Make all your loan and credit card payments on time.
Keep credit card balances well below your credit limits.
Open new credit accounts only when necessary. - Applying for too many credit cards can hurt your score.
Third Party Cover Could Cost You More Than You Think
If you do opt for third party cover, you will need to consider the extra costs which you will incur if you are involved in an accident and need to make a claim - as only the third party is covered. This means you might not be able to claim for any damage or a replacement vehicle, and a courtesy car would not be covered or provided either.
Drive Safely
Speeding tickets, accidents and other traffic violations drive up car insurance premiums. If you get a ticket, you may be offered the opportunity to go to traffic school to get it dismissed or reduce the number of violation points that go on your driving record. If you can keep the violation off your driving record, the time spent in class could lower your car insurance up to $546 per year on average, according to our analysis.
You can also take additional driving courses, such as our Defence Driving Course to get more experience and in return recieve a cheaper quote for your insurance.
Avoid Car Modifications
Whilst a flashy set of wheels with a sub-woofer or styling kit may be tempting, it is likely to drive up the cost of your insurance. This is because modifications can change the way a car handles or make the car more appealing to thieves – either way, it can increase the likelihood of a claim. Want car insurance for a young driver under $1000? We can not guarantee that we can help you find a three-figure quote, but by avoiding a car with modifications and following the tips above, you will have a chance of finding a price that you are happy with.