When your teenager finally gets their driver’s license, it’s an exciting milestone—but it can also mean a significant increase in your auto insurance costs. Because of their inexperience on the road, teen drivers are considered high-risk, leading to higher premiums. However, there are several strategies you can use to keep costs manageable while ensuring your teen has the coverage they need.
At Aspire Insurance Group, we specialize in helping Minnesota & Wisconsin families find the best coverage at a competitive rate. Here’s how you can save on auto insurance for your teenage driver:
1. Good Student Discount – A Smart Way to Save
Many insurance companies offer Good Student Discounts to reward academic achievement. If your teen maintains a “B” average (3.0 GPA) or higher, they may qualify for a discount ranging from 5% to 25%.
👉 How to Qualify:
- Your teen must be a full-time high school or college student
- Most insurers require proof, such as a report card or transcript
- Some companies extend the discount if your teen is in the top 20% of their class
📌 Savings Example: If adding your teen increases your premium by $2,000 annually, a 15% discount could save you $300 per year—a great incentive for hitting the books!
2. Multi-Car & Multi-Policy Discounts
If you have multiple vehicles in your household, bundling policies can lead to significant savings.
✅ Multi-Car Discount: Adding your teen’s car to your existing auto policy is often cheaper than getting a separate policy.
✅ Bundle Your Policies: If you already have homeowners or renters insurance, combining it with your auto policy could reduce costs even further.
📌 Savings Example: A Minnesota family paying $2,500 annually for auto insurance after adding their teen saved $400 per year by bundling their home and auto insurance with the same provider.
3. Pick the Right Car – Safety = Savings
The type of car your teen drives plays a major role in determining insurance costs. High-performance vehicles or brand-new cars often result in higher premiums due to expensive repairs and increased risk.
❌ Avoid: Sports cars, high-horsepower models, and luxury vehicles
✅ Best Choices: Safe, reliable models with high crash-test ratings (e.g., Honda Accord, Toyota Camry)
📌 Cost Difference Example:
- A 2022 Dodge Charger for a 17-year-old might cost $3,500/year to insure
- A 2017 Toyota Corolla could be $1,900/year – a $1,600 savings!
4. Use Telematics & Safe Driving Apps
Many insurance companies offer telematics programs, where a small device or mobile app monitors driving habits. If your teen drives safely (avoiding speeding, harsh braking, and late-night trips), you could save up to 30% on premiums.
🚗 Popular Telematics Programs:
- Progressive’s Snapshot
- Travelers’ IntelliDrive
- Safeco’s RightTrack
📌 Savings Example: The Johnson family enrolled their teen in a telematics program and saved 20%, reducing their annual premium by $400.
5. Increase Your Deductible for Lower Monthly Costs
If your teen is driving a used car, raising the deductible (the amount you pay before insurance kicks in) can help lower monthly premiums because you are choosing to take on more of the risk.
📌 Example Savings: Raising the deductible from $500 to $1,000 could lower premiums by 10% to 20%, saving around $250 per year.
❗ Important: Make sure you have enough savings set aside to cover the higher deductible in case of an accident.
6. Distant Student Discount (For College Students Without a Car)
If your teen goes to college more than 100 miles away and doesn’t take a car, they may qualify for a Distant Student Discount of up to 25%.
📌 Example: The Martinez family saved $500 per year when their son left for college and no longer needed daily auto coverage.
⚠️ Important: Your teen cannot have a car at school to qualify. This discount is great for students living on campus.
7. Shop Around & Compare Rates (Aspire Can Help!)
Not all insurance companies price teen drivers the same way. Some insurers are more teen-friendly than others. That’s why it’s always smart to compare multiple providers.
📌 Example: The Anderson family switched carriers and saved $750 per year while keeping the same coverage for their teen.
Final Thoughts: How to Keep Teen Auto Insurance Affordable
Adding a teenage driver to your policy doesn’t have to break the bank. By using the right discounts and making informed choices, you can significantly reduce costs while ensuring your teen is protected.
✅ Encourage good grades for a discount
✅ Bundle auto with home or renters’ insurance
✅ Choose a safe, reliable vehicle
✅ Use telematics programs for safe driving rewards
✅ Increase deductibles (if financially comfortable)
✅ Ask about every available discount!