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Car Insurance Discounts for New Drivers

Here's what you need to know...
  • There are several discount opportunities available to young adult drivers
  • Teenagers will have to be added to a guardian’s policy until they are 18 years old
  • Increasing a deductible will help lower your insurance premium
Obtaining a driver’s license is a milestone event for many teenagers. Having a license can benefit young people as well as their parents. For teens, it is great to be able to travel around without having to bum rides from others.

It also means that teens do not have to be so dependent on their parents for rides.

The financial downside to a teenager getting a driver’s license is the cost involved with possibly obtaining another vehicle, and certainly the cost associated with insuring such a driver.

The good news is that there are discounts that will reduce the cost of insuring a newly-licensed driver. Enter your zip code in our comparison tool above to receive FREE car insurance quotes from multiple companies.

Some of the discounts that might be available to teen drivers (depending on the insurer) include the following:

  • Good Driver Discount
  • Driver Training Discount
  • Multi-Car Discount
  • Good Student Discount
  • Vehicle Discount
  • Additional Driver Discount
  • Group Discount
  • Away From Home Discount
  • Low Mileage Discount
  • Deductible Discount
  • Monitoring Device Discount

Good Driver Discount

Since new drivers are not experienced, it is not really possible to say that this is truly a discount.

New drivers will be charged a higher rate due to their age and lack of experience.

However, gaining experience and keeping a clean driving record will help teenagers avoid surcharges that will occur with tickets and accidents and may qualify you for the good driver discount.

Driver Training Discount

Many insurers will offer discounts to teens that have completed an approved driver training course. In most cases, classroom time and road time are required and the instructor must be qualified.

Multi-Car Discount

Teens are not able to own a vehicle in their name until they are 18. This means that they will need to be added to their parents’ policy.

The advantage to this is that they will benefit from the multi-car policy discount that applies to policies that have more than one vehicle on them.

Good Student Discount

The good student discount is generally available to high school and college students with a B average or higher. Such students are seen as being more responsible.

This discount usually applies to full-time students only.

Vehicle Discount

Like the Good Driver Discount, this is not a true discount. The bottom line is a teen that drives a brand new, high-performance vehicle will be surcharged and will pay more than a teen that drives her grandmother’s old car.

Additional Driver Discount

This discounted rate applies to teens that do not have a car available for their regular use.

If there are fewer cars than there are drivers in the household, insurance companies view these teen drivers as less of a risk because they will not always have access to a vehicle since they are having to share it with other drivers.

Group Discount

If someone in the household is a member of a professional organization or some other type of organization, it is possible that members of that organization could be eligible for discounts.

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Away From Home Discount

Some insurers provide a discount on auto insurance for drivers that are away from home.

This situation usually arises for college students, and there is typically a certain distance requirement. An example would be a discount given to a student who lives more than 120 miles from home and does not have a car with them at college.

Low Mileage Discount

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Vehicles that are on the road less are less likely to be involved in an accident. Some insurers will offer the low mileage discount to teens that drive less than 7500 miles a year.

Monitoring Device Discount

Technology has now made it possible for devices to be attached to vehicles to monitor the driving habits of the driver. This is most beneficial for keeping an eye on young drivers and may save you money on your car insurance policy.

Policyholders should check with insurers to see if this discount is offered and to verify what devices are eligible.

The likelihood of accidents with such drivers is diminished because parents are privy to information about driving habits.

Deductible Discounts

The higher a deductible is, the lower the premium will be. Often, to make any real difference in the premium, you would have to make a significant increase in the deductible. There is some cost-benefit analysis that should be done.

However, deductibles can be another way to decrease the known costs of a teen driver.

It is important to make sure that young drivers understand what insurance costs and why insurance is important to them and to others.

Young drivers need to know that if they keep a clean record–and avoid the high-risk label–they will likely be able to find better insurance rates.

It is costly to insure a young driver and, once they are out on their own, auto insurance can be one of their biggest expenses if they are not careful. Fortunately, there are discounts available to newly licensed drivers that can make insurance more affordable.

Ultimately, these discounts can make the milestone event of obtaining a driver’s license a possibility!

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