Things to Think About Before Handing Your Teenager the Keys to the Car

Hey Parents of Teenagers,

How are you hanging in there? It’s been a fun ride, hasn’t it? Watching our kids grow up into independent thinking, witty, wise, and unique teenagers. I, for one, still vividly remember watching my kids in the rear view mirror of my minivan, securely fastened into their car seats, eating their cheerios. It feels like it was just yesterday when we retired the booster seats and then years later, allowed them to move into the front passenger seat, and now…. they want to take the driver’s seat! Yikes!

If your kids are anything like mine, they are already counting down the days until they can get their driver’s license. And as if the thought of my kids driving wasn’t enough to keep me up at night, the fear of what’s going to happen to my auto insurance premiums sure doesn’t help (and no, insurance agents don’t get any special discounts).

There is no doubt that your auto insurance premiums are going to go up – this is unavoidable. Teenagers, even the super responsible, rule following, incredibly awesome ones represent an extremely high level of risk to an insurance carrier. New drivers are not eligible for the California Good Driver’s discount for 3 years and then, only if they have kept their driving record clean of “at fault” accidents and have no more than one minor driving violations on their record.

Given what you cannot control (see above paragraphs), there are some things that you and your teen can do to help keep your rates down:

  • Get good grades – every auto carrier gives a discount to full time students with a 3.0 GPA or better (this is not random, statistically, conscientious students are conscientious drivers). This discount can be as much as 15-20%.

  • Take advantage of multi-policy discounts – carriers will discount both your home and auto policies by 10-20% if you put them both with the same carrier. This is called packaging and teenagers or not, it’s always a good strategy.

  • Don’t buy your teenager a car until you absolutely have to! The insurance rationale behind this is that if you have as many drivers as cars in your household, then every driver is assigned a car and is considered a full time driver. If you have more drivers than cars, your teenager can be considered a part time driver and the rates will be significantly less.

  • All cars are not created/rated equal. If you are shopping for a car for your teen driver, remember that the higher the replacement value of the car, the more expensive it is to insure. For instance, using my son as an example, the difference between insuring him on a 1997 Honda Civic vs a 2017 Audi A4 would be over $2000/year.

  • Lastly, choose your agent wisely (this is my plug). A good agent will not only shop out your insurance for the best products and rates, but will also offer very important guidance on how much coverage you need to protect your assets. Beware of agents that only represent one carrier, options are key and no one carrier has all the answers.

Please call or email me so we can talk about the best insurance strategy for your family. Teenagers keep us busy with all sorts of worries and demands. Transfer the stress of insurance to me and free your mind to think about other pressing issues, like college tuition!

Barbara Madvin
Producer, Gaspar Insurance Services, Inc.

Questions or comments? barbara.madvin@gasparinsurance.com