How much is car insurance for a 16-year-old?
The day has finally arrived. Your teen driver has passed their driving test, and they’re ready to take on the world. Your wallet, however, is not. Although your young driver is eager to get out on the road, the costs you incur from adding them to your insurance policy could hold you back from letting them drive. Many parents spend thousands each year to insure the teen drivers in their family.
You might be thinking “I don’t have thousands to spend on my teen right now!” If you’re about to break into a cold sweat, don’t worry too much. Although car insurance for teen drivers is expensive, there are ways to save while still maintaining the coverage levels you need for everyone in the family.
How Much is Car Insurance for a 16 Year Old?
In general, insuring new and inexperienced drivers is never cheap. Auto insurance companies view 16 year old drivers as some of the riskiest drivers to insure, and the rates reflect this.
Teen drivers often pay for insurance premiums that are three times as expensive as rates given to drivers in their thirties. Until drivers reach the age of 25, they’re likely to pay more in car insurance than drivers from any other age bracket.
How Do Rates Differ for a 16 Year Old Male vs. a 16 Year Old Female?
On average, the cost of car insurance for 16-year-old males is much higher than the cost for female drivers. Compared to females, males are more prone to display riskier driving behavior, such as speeding which is why they’re stuck with higher rates.
Insurance.com did a national study to show just how much rates can rise when a teen is added to a policy. In their research, they used a family profile of owning a 2019 Honda Accord driven by a 40-year old man buying full coverage insurance. Then they added a 16-year old teen to the policy. The study revealed that auto insurance for a teenage boy was far more expensive. The average bill rose by 176% for a boy, compared with 129% for a teenage girl.
Although this may seem unfair, studies performed by the CDC give us more insight. In 2019, the motor vehicle death rate for male drivers between the ages of 16-19 was two times higher than the death rate for female drivers.
Why is Car Insurance for a 16 Year Old So Expensive?
The same study from Insurance.com revealed that when a 16-year old was added to the policy, the average household’s car insurance bill rose 152%. According to this study, the reason behind the drastic increase was that teens crash at a much higher rate than older drivers. The worst age for accidents is 16. They have a crash rate twice as high as drivers that are 18- and 19-year-olds, so insurance companies have to prepare for that expected cost of insuring the driver.
In addition, statistics show that teen drivers are 4 times as likely as drivers 18 and older to be involved in a crash and 3 times as likely as drivers 18 and older to be involved in a fatal crash. Compared with other age groups, teen drivers also have the lowest seat belt use rates. It’s common for high school students riding in someone else’s car to avoid using a seat belt. So no matter how you slice it, the risk for teenage drivers is much higher than other groups of drivers.
Rates are also higher for teenage drivers because insurance companies lack data to base their premiums on. Drivers with credit scores, driving histories, and previous insurance records have built a reputation that insurance companies can use to calculate rates. For example, a driver with an accident-free driving history will benefit from discounts and cheaper rates than someone with several accidents on their record.
Unfortunately, with teenage drivers, there’s little to no data for them to use when determining auto insurance rates. Instead, insurance companies use data from other 16-year-old drivers in similar situations to come up with a quote. As a result, teenage drivers are stuck with higher costs.
How Your Coverage Level Impact Rates for 16 Year Olds
The amount of coverage you choose for your vehicle will directly impact your auto insurance rates. While every state has specific minimum car insurance coverage requirements, many drivers purchase additional coverage to protect their families.
For example, imagine you live in a state where the state mandated coverage is $30,000 for property damage coverage. However, your teen driver attends school in an area where the average vehicle costs around $45,000. If they get into a collision and total a $47,000 vehicle, you and your young driver will be responsible for the $2,000 difference.
You should also think about your state’s liability requirements. If the minimum liability coverage in your state is $25,000, but your teen gets into an accident and sends two people to the hospital, this won’t be enough to cover the medical bills.
Thankfully, 16-year old drivers aren’t required to have full coverage unless they are driving a car that requires it. Although they don’t need it, many parents choose to place full coverage on their teen’s car due to their inexperience. This way, you’ll be covered if your child does get into an at-fault accident.
Adding optional coverage features to your policy can also cause your rates to rise. Parents may choose to add roadside assistance to prevent their child from getting stranded along a busy highway.
How Your Location Impacts Rates for 16 Year Olds
Did you know where you live can affect the amount you pay for car insurance? Each state has its minimum insurance requirements, and the higher the minimum insurance is, the more expensive your premium will be. Besides this, states process and payout claims differently, further affecting the cost of your monthly insurance.
Your specific address and zip code can also impact your insurance rates. For example, let’s say you live in a rural town with low crime rates and little to no traffic. You’ll pay much less for car insurance than someone who lives in a touristy town with lots of traffic and high crime rates.
The weather of a region will affect your car insurance rates too. If the state you live in is regularly exposed to extreme weather like tornadoes and hurricanes, insurance companies need to pay more in damage claims, forcing the cost of insurance up for all drivers.
Vehicles That Are Cheapest to Insure for 16 Year Olds
The car your teen decides to cruise around in can also impact your insurance premiums. As a parent, while you want to save money, you also want your child to be safe. You’ll be happy to know that many cars that are cheap to insure are also quite safe to drive.
Cars that have high safety ratings and low horsepower are often cheaper to insure, as they discourage risky behavior in younger drivers. When shopping for a vehicle, skip the flashy Camaros and Mustangs and opt for a sedan like a Honda Civic or Nissan Altima. On average, it’s much cheaper to insure an older sedan than a sports car.
Many drivers find it especially affordable to choose older cars for their teen driver, as these vehicles may only need liability insurance.
How to Save on the Cost of Auto Insurance for a 16 Year Old
There’s no getting around it. The cost of auto insurance for your beloved 16-year old is probably going to be higher than other drivers on your policy. However, there are some things you can do to save money on auto insurance for your teen driver.
Don’t underestimate the power of shopping around to save on the cost of auto insurance for your 16-year-old. Insurance companies base their rates on various factors — things like gender, location, education level, and vehicle make and model — just to name a few. As a result, the rates can differ drastically between drivers, even teen drivers in the same household.
For example, male drivers pay more for car insurance than female drivers. This means that if you have twin 16-year-old drivers in your household, but one is a boy, he would probably pay more for car insurance than his sister. With this in mind, shopping around is one of the best ways to save money on car insurance.
To view dozens of quotes from insurance companies in one place, use an auto insurance comparison tool like Compare.com. Start by answering simple questions about your teen driver, the vehicle they drive, and their driving record to see free quotes from dozens of insurance companies. This way, you can shop for auto insurance, confident that you’re getting the best deals out there.
Many insurance companies offer discounts to young drivers to offset the high cost of auto insurance. Here are some typical discounts that 16-year-old drivers can qualify for:
Driver’s Education Course Discount
Young drivers need all the help they can get when it comes to learning the rules of the road. Although your 16 year old may take drivers ed classes, an official driver’s education course might get you a discount with your insurer. Check with your insurance company to find out which courses qualify for the discount.
The paid-in-full discount is exactly what it sounds like. Your insurance company awards you with a discount on your insurance premium for paying your yearly premium in one or two large payments. You can either pay for the entire year up front, or make two six-month payments throughout the year. With this discount, you can enjoy savings between 5-10% on your insurance premium.
Some insurers may not offer this discount upfront, but they will charge you interest if you choose to make monthly payments. By choosing to pay your premium in full, you avoid paying interest and remove the hassle of making pesky monthly payments.
Good Student Discount
To qualify for the good student discount, teen drivers will need to show proof of their academic achievements. Car insurance companies consider you to be a good student if you can show any of the following:
- A GPA of 3.0 or a grade average of B or higher
- Good standardized test scores on the SAT, ACT, or PSAT
- Be in the top 20% of your class ranking
- Make the Dean’s List or be an Honor Roll student
Generally, students can expect to enjoy discounts of 10-15%, but it depends on your insurance company. This discount is extended to high school and college students.
Reduced Mileage/Mileage Tracking Discounts
If you choose an auto insurance company that offers mileage tracking, you may qualify for a discount if your 16-year-old drives under a certain number of miles a year. This might be a good fit for your child if they’ll only be using their car to drive from school to home, or just around town. In addition, you might find that telematics programs can help you save money and keep track of your teens driving habits.
Parent-Teen Driving Contract Discount
Did you know you can save money on car insurance through a teen driving contract? Teens who sign a driving contract with their parents that outlines rules they will follow while driving can see savings around 5% on insurance. The contract discusses rules like the hours of driving or the number of passengers they have in the car.
Student Away From Home Discount
The “student away from home” discount typically applies to college students, but it can apply to younger drivers as well. Insurance companies are aware that if your student is away from home, the chances of them driving a vehicle and getting into a collision are much lower.
You qualify for this discount if your student is attending school away from home and doesn’t take their car with them. If your 16-year-old is currently attending school away from home (such as a boarding school), you could potentially qualify for this discount.
Good Driver Discount
After your teen drives for a period of time with no claims, accidents, or tickets, they will enjoy the good driver discount for having a clean driving record.
Choose a Less Expensive Vehicle
When shopping around for a vehicle, remember that the type of car your 16-year-old drives will affect your insurance rates. So although your teen might want to swing for a newer, flashier car, an older, less expensive vehicle is probably the better choice.
The newer a car is, the more money your insurance company will need to pay out in case of an accident. If you own multiple cars, it’s best to let your teenager drive the least expensive one to keep insurance costs down.
Drop Collision or Comprehensive Insurance
When looking to save money on your 16-year old’s auto insurance, consider dropping collision or comprehensive insurance. Both coverages are optional — unless the car is leased or under a car loan. If your teen driver is driving an older, inexpensive car, having collision or comprehensive insurance may not be worth it.
If they do get into an accident or inflict damage on the car, it might be cheaper to pay out of pocket for repairs than paying for this kind of coverage every month. However, suppose you’re not sure you can cover the costs to repair or buy a new vehicle if you drop this coverage. In that case, it’s better to keep collision and comprehensive insurance to avoid being stuck without a vehicle after an incident.
Clean Driving Record
Since teen drivers lack experience on the road, they need to keep a clean driving record. If your teen is caught driving under the influence, texting and driving, or speeding, you’ll see a serious spike in your insurance premium. In addition, if they add a collision or ticket to their driving record, they won’t qualify for discounts like the good driver discount anymore.
Join a Family Policy
Although many parents think it’s best to give their teen drivers their own policy to keep costs down, this isn’t always the case. In some situations, it’s better to add your teen to the family policy and take advantage of a multi-car discount.
It’s important to remember that many insurance companies require anyone living at your residence above legal driving age to either be added to your policy or excluded from it entirely. If your teen were to borrow your car for any reason and get into a collision, them being on their own policy puts them at risk for not having coverage.
Adding 16-year-old drivers to your policy can be expensive, but this is why parents should shop around and compare insurance rates to find options to fit their budget and insurance needs. Using online comparison calculators like Compare.com can help you find the best insurance policies for you and your family.
FAQs About Auto Insurance for a 16-Year-Old
Should I add my 16 year old to car insurance?
While some drivers choose to give their 16-year-old their own insurance policy, others find that it’s actually cheaper to add a teen driver to their existing policy. Insurance rates vary wildly for teen drivers, so shop around to find the most affordable options after adding your 16-year-old to your policy.
Is car insurance more expensive for 16 years?
In short, yes. Car insurance is more expensive for 16 year olds because teenagers are classified as a high-risk group of drivers. They have the highest accident rates and are much more likely than older drivers to be involved in fatal collisions. Their lack of experience on the road also contributes to more expensive auto insurance.
What is the cheapest way to get car insurance for a teenager?
The cheapest way to get car insurance for a teenager is to compare auto insurance rates from several insurance companies. Each insurer will use different factors to calculate your car insurance premiums, so compare thoroughly and review the different discounts and offers.