When your child reaches the age of 16 and can get his or her driver's license, it might be a bittersweet moment for you as a parent. While there are some great perks with teens being able to drive, there are also some not-so-great things about this. One thing your teen will need car insurance, but you might be able to save some money by choosing the right car for your teen. Here are several factors you should consider as you start car shopping for your teenager.
Insurance Rates Are Higher for Valuable Cars
The first thing to understand about car insurance rates is that they are highly based on the value of a car. Anytime you insure a really valuable car, it will cost more than insuring a cheaper car. Because of this, you might want to lean towards buying a car for your teen that is not worth a lot of money. In other words, instead of buying a brand-new car, why not settle for a car the costs $5,000 or less? Not only will this insurance cost less, but it will cost a lot less out of your pocket to buy the car.
Insurance Rates Are Higher for Full-Coverage Policies
The second thing to understand is the difference in insurance needs for cars with loans and cars without. If you have a loan on your vehicle, you will have to carry full-coverage insurance on it, whereas you will not need full-coverage if you do not have a loan. Paying full-coverage insurance on a car is always more expense than having liability-only coverage, and this is another reason you should lean towards buying a less expensive vehicle for your teen.
Insurance Rates Are Lower for Teens who Meet Certain Conditions
The other thing to know is that teens can receive discounts on their policies if they meet certain conditions. Two of the easiest conditions to meet are taking driver's education classes and keeping good grades. Both of these result in discounts on auto insurance, and this is primarily because teens are safer drivers when they complete driver's ed and have good grades in school. If your teen meets these conditions, he or she may be able to have more options when choosing a car since the discounts can offset some of other costs.
If you want to purchase a car for your teen, keep these tips in mind as they may help you save money on auto insurance. You can learn more about auto insurance rates for your teen by contacting an insurance company.
