For teens, getting behind the wheel for the first time is a milestone. It gives them the newfound freedom of the open road. And it shows them a signpost telling them they’re on the path to adulthood. But it’s going to take a toll—a large one.
In fact, the average 16-year-old driver pays an average of $7,658 a year for car insurance, according to The Zebra, an insurance marketplace. That equates to twice as much as the average 30-year-old pays, which is $2,189 per year.
But to give you a clearer perspective, the average auto insurance policy premium for 16- to 19-year-olds is $4,573 per year, or $380 per month, according to The Zebra’s State of Auto Insurance report.
Why? As beginner motorists, teen drivers have always been red flags for car insurance companies. Driver inexperience could lead to a higher risk of accidents on the road.
In fact, the fatal crash rate per mile driven for 16- to 19-year-olds is nearly three times the rate for drivers ages 20 and over, according to data from the Insurance Institute for Highway Safety (IIHS).
So it’s not surprising that insurance companies may want to cover themselves by slapping higher rates on teen drivers. But don’t fret. There are steps you and your teen can take to reduce car insurance costs today.
Add Them to Your Policy
Adding your teen driver to your own auto insurance policy is typically much less expensive than letting your teens take out policies of their own. However, this could backfire if you have a poor driving record and already have a higher premium. Still, some companies offer specialized insurance for people with poor driving records. So always be sure to shop around and get several quotes from different insurance carriers.Bundle Policies
Oftentimes, going to the same company for different insurance policies could lead to key discounts and bonuses. To put this into perspective, The Zebra’s report found that bundling auto insurance with either renters, homeowners, or condo insurance saves on average 8 percent. Considering average annual car insurance costs, a typical 16-year-old could save up to $460 per year by being part of a bundled insurance policy.
But if you’re a homeowner, you may be in for larger savings. The report found that homeowners in particular could save up to 10 percent. This could lower a 16-year-old’s average annual insurance premium by an additional $115.
Homeowners tend to experience a slightly larger savings of 10 percent. That could potentially reduce the average 16-year-old’s premium by an additional $115.
Increase the Deductible
As with medical insurance, having a high deductible for car insurance could translate to lower premiums.Taking a closer look, bumping a $500 deductible to $1,000 could net 9 percent in savings, according to The Zebra. And increasing it to $2,000 could rake in 16 percent in savings. So an average 16-year-old could see their car insurance bills get cut by anywhere from $517 to $919.
Look for Student Discounts
Several insurance companies provide discounts to students who maintain good grades in school. This typically means keeping a GPA of B/3.0 or higher. This could score your teen $283 in average savings, according to The Zebra.But students may also qualify for car insurance discounts if they pass safe-driving classes. Some high schools even offer these courses as part of their curriculum. But different insurance companies have their own rules and parameters when it comes to these types of discounts. So make sure you ask about these discounts as you shop around, or speak with a representative at your existing carrier.
Install a Telematics Device
A telemetric device can be installed in your teen’s vehicle to track their driving behavior. This gadget is designed to encourage safe driving habits. And some insurance carriers offer discounts for drivers that have these devices installed on their cars and can thereby prove good driving habits. The Zebra found that installing a telematics device can save teenagers about 8 percent.Telematics discount programs typically fall into two categories. Behavior-based discounts are awarded to drivers who can indicate smooth acceleration and braking, adhering to the speed limit, and minimizing phone use while driving.
But there are also mileage-based discounts that offer savings for low mileage.
The Bottom Line
Because they are fresh drivers, teens will typically see larger auto insurance premiums than their older counterparts. But there is much that you and your teen can do to lower those costs. Consider actions like putting them on your own policy, bundling policies, and encouraging safe driving habits. But one of the most important turns to make is shopping around. Gather and compare quotes and ask different insurance companies about any available discounts and bonuses.The Epoch Times copyright © 2025. The views and opinions expressed are those of the authors. They are meant for general informational purposes only and should not be construed or interpreted as a recommendation or solicitation. The Epoch Times does not provide investment, tax, legal, financial planning, estate planning, or any other personal finance advice. The Epoch Times holds no liability for the accuracy or timeliness of the information provided.
