How to get cheap car insurance for first time drivers?
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UPDATED: Oct 18, 2021
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Shopping for insurance for a first-time driver can either be exciting or terrifying depending upon who you are. If you are a young driver who is in the midst of getting their license, the idea of being added to your parents’ insurance means that you will have the freedom to drive alone that you have been dreaming of. If you are the parent who is doing the adding, however, the idea of your teen being licensed is terrifying and could also be financially devastating. This is why preparation is always key. Start comparing car insurance rates now by using our FREE tool below!
While the cost to insure a first-time driver will always be higher than the cost to insure an experienced driver, there are things that you can do to manage costs and keep rates low. As a consumer who is searching for cheap premiums, it is your duty to learn about the product you are buying and why certain factors lead to higher costs. You need to know not just what the price will be when you are insuring an inexperienced operator, but also why the price is what it is. Only after you have all of the information will you feel comfortable paying the final price that you find. Read this guide on how to find low premiums for first-time drivers, and you will be ready to shop by the last sentence.
What is an inexperienced operator and why is it an important term?
If you were to search for insurance terms and industry lingo on the Internet, you would find a trove of different words or phrases that all have their own unique meaning to agents, underwriters and other insurance professionals. One important term that you might run into when you are shopping for insurance in this scenario is inexperienced or youthful operator.
The amount of experience that you have will ultimately dictate if you will be placed in the inexperienced class.
An inexperienced operator is not always young in age but always has very little experience behind the wheel as a licensed driver. In most cases, anyone with less than 3 years of experience will fall into the class. Many companies will actually classify all drivers with less than 5 to 9 years as inexperienced. In this case, the driver in the household who has not been licensed for several years will have a “surcharge” because they are considered high risk. This is one of the main reasons why premiums for new drivers is so high.
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Why are first-time drivers classified as high-risk drivers?
There are three different risk classes that drivers can be assigned to: preferred, standard or high-risk. While several different underwriting factors have an affect on premiums, new drivers who have just earned their license for the first time will always be considered high-risk for at least a few years.
The primary reason why new drivers and high-risk drivers are terms that can be used interchangeably is because of the statistics that show how likely people are to get into an accident. Since premiums are often based on data, trends, probability and statistics, actuaries cannot ignore that people who are new to the licensed lifestyle tend to have more accidents that result in more damages. While age also plays a role in this, driving experience and age are two separate rating factors that each drive premiums up. There is no denying that the crash risk for teens and other new drivers is higher than average.
Understanding All of the Factors That Affect Premiums
Now that you know how being a first-time driver can be a curse, the next step is learning how other rating factors will work in conjunction with experience when rates are being calculated. Age and experience are often focused on when you have a teen who is about to test for their driving privilege, but there are other factors that you cannot overlook that can help lower your rates or drive them up even more. Here is a breakdown of the bits of information that can used when an underwriter is deciding what to charge you:
- Marital status
- Geographic location
- Garaging zip code
- Credit score
- How often you drive and for what purpose
- How many miles you drive
- Your occupation
- Vehicle safety rating
- Vehicle type and classification
- Driving record and accident history
How First-time Drivers Can Lower Their Rates
The best way to keep premiums low for first-time drivers is for the driver to be listed on another experienced driver’s policy. This is common when a teen is getting their license and driving a parent’s car, but in some cases it is not an option when the new driver is an adult who lives independently. Regardless of your situation, there are ways that you can lower your premiums so that your insurance expenses do not break the bank. Here are some valuable ideas that could drive down the rates for the first-time licensee:
- Buy a Vehicle with a Good Safety Record
You never want to assign a new driver to a vehicle with a poor safety record or a turbo-charged engine. Each of these types of vehicles already carry high rates, but the rates for these cars are exorbitantly higher when a high-risk driver is operating them. Choose a safe car that has conservative premiums if you are car shopping.
- Drop Comp and Collision if Possible
The two most expensive coverage options for inexperienced drivers is comprehensive and collision. If you have an older car that can easily be replaced, it is a perfect money-saving move to drop physical damage coverage and take the risk.
- Take Advantage of Good Grade Discounts
Drivers who are under the age of 25 may be eligible for Good Student discounts if they are enrolled in school full-time and they maintain a good Grade Point Average. You will need to show you have maintained your grades to maintain the discount.
- Take a Driver Safety Training Program
Most companies want to teach drivers to avoid accidents. This is why there are driver safety programs available to new drivers. You can get a discount for watching a video or taking a test on your own free time.
Multi-policy and multi-car discounts can also have a positive affect on premiums. You will need to set aside time to shop around and to comparison shop so that you can find a company that targets households with new drivers. Use an online comparison shopping tool that will give you access to rate quotes, and then you can find the cheapest insurance available to you. Start comparing car insurance rates now by entering your zip code in our FREE tool below!