How to lower my teen's car insurance premiums

Congratulations! You've raised your child almost to adulthood and he's just gotten his driver's license. Now take a deep breath. That manageable car insurance premium you've been paying for the last 16 or 17 years is about to jump through the roof when you add him to your policy. But here's the good news: Insurers are well aware that those premiums can induce a kind of sticker shock in parents. Many offer discounts to ease the financial blow.

Does your teen earn good grades?
The good student discount is one of the most common breaks for teen drivers. The exact savings can vary by state and insurer. Allstate's can be as much as 20 percent, but Fortune Magazine indicates that the average is about 10 percent.

Most insurance companies require that your child be a full-time student. This means carrying at least 12 credits if he's in college. He generally needs to have at least a B average or have made the honor roll.

Sign your child up for a driver safety course
Traffic violations can disqualify your teen from taking the good student discount, so make sure he drives safely as well. Not only can it cut your premiums, but it will bring you peace of mind.

Many insurance companies offer discounts if your teen completes a safe driving course. Liberty Mutual has "teenSMART" and State Farm offers "Steer Clear." This discount can also vary by state and the exact rules depend on the insurer. State Farm offers a break of up to 15 percent and requires that your teenager sign a safe driver contract with you.

What's your teen driving?
Some discounts have more to do with your car than who's driving it. New cars have advanced and state-of-the-art safety features that can save you insurance dollars, but used cars are generally cheaper to insure overall. Ideally, you can find a gently-used older car with safety features and save a little money in both respects. You also have the option of installing safety features, such as an anti-theft device, on an older car to chip away at your premiums.

Add an electronic watchdog
Numerous electronic devices - called telematics - are available from insurers to help reduce your premiums, also. Allstate offers Drivewise, a gadget that plugs in under the car's dashboard to create a report card of your teen's driving habits, including how often he has to slam on the brakes. A really good report card can shave up to 20 percent off your insurance costs.

Allstate makes the device available in many states, so call and check if yours is one of them. Progressive has its Snapshot that serves the same purpose.


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