It's good to be young. Your whole life lies ahead of you, full of possibility. You get to experience everything with fresh eyes, free of cynicism. And your back doesn't hurt after playing basketball.
But there is a downside: Young drivers often pay more for car insurance. It's a matter of statistics. Younger drivers generally have more car accidents because they have less experience. As a result, they're more expensive to insure.
Younger drivers also tend to shop around more for car insurance. Setting up and servicing new accounts costs insurers more than holding onto the same customers, said Gregory Hoeg, vice president of insurance practice for J.D. Power, a market research company.
"There's less likelihood that you can count on a continuing stream of premiums," Hoeg said.
Even if you are a safe driver and loyal car insurance customer, the behavior of your peers will end up hurting you when you pay your premium. But there are ways to save on car insurance, even for younger drivers.
How can young drivers pay less for car insurance?
There is one obvious way to save: Drive safely. Insurance will become very expensive for drivers who keep crashing and filing claims. Many insurers give discounts to drivers who agree to attach devices to their cars that track their driving habits.
This may be creepy, but Heog said it can also show an insurer you have good driving habits.
Nationwide Insurance has a program called SmartRide that allows drivers to see how often they slam on their brakes, speed up too quickly and how far they drive, said Teresa Scharn, associate vice president for product development for Nationwide.
"This data allows them to adjust their driving habits to become safer on the roads," she said.
Young drivers should also avoid distractions like mobile devices while driving. Use apps that turn off your phone while driving, Scharn said. Parents should make sure new drivers get as much road time as possible while they have their learner's permit and there's another experienced driver in the car, before they start driving on their own.
New drivers should get familiar with the rules of the road as well, Scharn said.
"Safety on the road is the highest priority," she said. "New drivers should make sure to familiarize themselves with laws in their area and follow them."
Aside from driving safely, young drivers should make sure to pick the right car, Hoeg said. Certain vehicles may have higher accident rates or repair costs and will be more expensive to insure. A used vehicle is usually cheaper to insure, but an ancient junker you bought for $40 will probably be an exception.
Good grades may also help. Almost every car insurer offers some kind of good student discount, Hoeg said. These discounts are typically for high schoolers, but some companies extend the offer to college students as well.
How to shop for car insurance
It's a good idea to shop around for quotes from multiple car insurers, even if your parents include you on their policy. Staying on your parents' policy is often cheaper (especially if they pay for it) but not always, Hoeg said.
New drivers may want to look for policies that include accident forgiveness, Scharn said. This rider keeps premiums from rising after your first accident.
When shopping, make sure you're familiar with what car insurance covers, how much coverage your state requires and how much coverage you need. Many people will want to just go for the lowest price, but drivers should also consider whether the insurer is a quality company, Hoeg said. Compare ratings from J.D. Power, A.M. Best and the Better Business Bureau and search for any complaints filed with public agencies.
It's also a good idea to talk to an insurance professional who can find savings that may not be obvious, Hoeg said.
When will my premiums drop?
You may have heard that auto insurance rates drop once you hit 25. That is generally true, unless you've submitted a bunch of claims or you only got your license at age 24. Once you reach that age, many insurers consider you a less risky driver.
"Because they have a bit more experience driving, they should be better drivers, you would hope," Hoeg said.
People who hit 25 also usually have more money than teens so they can buy more reliable cars.
Being a young driver can be expensive, but if you drive safely and take advantage of insurer discounts aimed at young people, you may be able to save. And if not, there's tons of other great things about being young, like... watching the Disney Channel? I don't know. Just be careful when you drive.