Young drivers face high insurance rates because they do not have a lot of driving experience. Affordable car insurance for under 25 is something that can seem out of reach. There are several ways for young people to access insurance at a lower cost. Many insurance companies will provide discounted rates to those under 25 if they obtain their insurance with the assistance of a parent.
Why is Car Insurance Higher for Those Under 25?
There are a few main factors that determine the cost of car insurance and the reason why drivers under 25 pay more:
- New drivers don’t have the experience necessary to avoid accidents. They are at higher risk for at-fault accidents and this means that car insurance costs are higher to cover those risks. Young drivers have higher crash and injury statistics than other population groups.
- Young drivers do not have much driving experience and this puts them in a high risk group.
- Insurance History. Since young drivers don’t have any history with insurance this presents a risk to the insurance company and ends up costing the driver more.
Do you Qualify for a Discount?
Some insurance companies offer discounts to drivers under 25 if they have met certain criteria. One or more of these can help to reduce monthly insurance costs:
- Move Through the Graduated Licensing System as Quickly as Possible. There is a discount available for each stage of the graduated licensing program. If you move through each stage quickly you will be able to access those discounts.
- Take a Driver Education Course. If you complete a driver education course that is approved by the government you can qualify for lower insurance rates through many insurance providers. Check with your insurance company for a complete list of course providers that are approved by them. A driving instructor can help you to build your confidence and help you to be a better driver in a shorter amount of time. A qualified driving instructor can help you to work on bad habits and any reservations you might have.
- Fleet Discount. Do you live at home with your parents? If your vehicle can be added to your parent’s car insurance you may pay a lower premium for multiple vehicles on the same policy.
- Stay with the Same Insurance Company. If you build a history with an insurance company you will establish a customer record with them and they might offer you certain discounts for being loyal.
Other Tips for Lower Car Insurance Rates for Young Drivers
You will pay less car insurance if you know how to access lower rates. Here are a few ways you could save some money on your insurance if you are under 25:
- Shop Around, Request Quotes. Call several insurance companies and request a quote, each company has different options. Rates will vary drastically between insurance companies.
- Choose a Sensible Car. Every young driver wants that fancy sports car or other flashy car but car insurance rates can increase substantially depending upon the make and model of your car. If you drive a car that is likely to be stolen your car insurance will be very expensive. Do your research and search for cars that are inexpensive to insure before you purchase one. Lower horsepower motors are less costly to run because they are better on fuel.
Keep Your Driving Record Clean
If you drive safely and avoid accidents and tickets you will soon be labelled as a safe and good driver. Collecting speeding tickets gets you in trouble with the law. Collecting violations can become extremely expensive when you want to insure your car. Lighten up on the gas pedal, be aware of your surroundings, don’t show off, and drive sensibly. Remember that careless driving and speeding can cause unnecessary injuries and endanger innocent people. Do not text, drink alcohol or consume drugs before you drive or when you are driving. Always follow the rules about the maximum number of passengers allowed in your vehicle. This is particularly important with graduated licensing programs.
Choose Usage-Based Insurance
Telematics technology allows your insurance company to monitor your driving habits. The insurance company can determine how many kilometres you drive, the times that you drive and your habits when it comes to acceleration and braking. If you drive carefully and safely you can receive discounts and lower insurance rates. When you provide your insurance company with your driving information, you are rewarded for your good driving habits. Some insurance companies require you to be monitored for a short period of time in order to determine your savings which can be as much as 25%. Some insurance companies will give you a discount for enrolling into their monitoring program. Your good driving patterns can only be used to lower your insurance rates.
If you speed or are in an accident it will not increase your insurance costs and the information that is collected can’t be used against you by the police or in an accident claim.
If you are Under 25 and are a Full-Time Student
As a young driver, you can continually work on lowering your insurance rates and keeping them down by being a good driver. If you are a full-time student then you could be eligible for more discounts. Many insurance companies require you to maintain a “B” average which most students can do easily.
Check with Your Employer
If you have a job, some small or medium sized businesses offer special discount programs and you could qualify for a discount on your car insurance. Talk to your human resources manager to see if you can get in on a group discount plan for car insurance. This is a good way to access a better rate than you would qualify for on your own.
Speak to a Broker
An insurance broker can give you advice and tips that you may not have considered when you started to search for appropriate car insurance. A broker can help you to access savings by comparing the rates of a variety of insurance companies so that you don’t have to.