Lowering your insurance premiums as a new driver

Part of the whole driving experience is dealing with insurance companies, and trying to get the absolute best rate.  After all, it is illegal to drive a vehicle without insurance.  The problem that many young drivers face, is that their monthly premiums are very high as the insurance companies label novice drivers, particularly men, high risk. There is a lot of evidence to suggest the insurance companies are not wrong with their assessment, therefore it can be quite expensive to purchase that first vehicle when factoring in car payments, gas, and of course, car insurance.

As a young male who purchased their first vehicle at the age of 25, I can attest to this.  My first car, a 2005 Acura RSX, came at a steep cost when it came to insurance.  I initially paid monthly premiums of $358 for an entire year before my premiums were lowered.  As I got older and my record stayed clean, my insurance rates were reflective of this and the monthly premium dropped below $200 after my 25th birthday.

The main reason for this is that as a new driver, you do not have a driving history for the insurance companies to base their rating off. Similar to people with no credit history, they can have a hard time getting a loan.  Therefore, in their risk assessment, they have to go off data models which look at past driving history for adults that match your profile. Unfortunately for young males under 25, the data does not look good as the leading cause of death amongst people between the ages of 15 to 25 are from car accidents, and 87% of those casualties are men.

Some of these insurance saving tips for young drivers were not available when I was purchasing my first vehicle, so it is nice to see the insurance companies adapting to technology, and environmentally friendly trends in our society.  There are many more insurance saving tips, but let’s take a look at 5 that can be achieved by anyone:

  • Buy used over new

    This should come as no surprise to anyone, new and more experienced drivers alike. The more expensive your vehicle, the higher your premium will be as the total cost insured will be higher.  This is why buying a used vehicle under $10,000 is cost efficient not only for your car payments, but also for your insurance premiums.

    Estimated savings: It depends on the vehicle, and the overall cost


  • Complete drivers-ed classes

    One of the biggest cash saving tips for your monthly insurance is successfully completing a drivers-ed course.  These courses consist of an in-class portion, as well as driving lessons in a vehicle with an instructor.

    Estimated savings: Up to 10%


  • Install a driving tracking device

    Many insurance companies offer premium reductions if you agree to install a tracking device in your vehicle.  These devices monitor your acceleration rate, high speeds, and hard braking patterns. The concept is that if you are cognizant of these factors, you will drive accordingly.

    all state driver tracking device

    An example of a car tracking device by Allstate insurance.

    Estimated savings: Up to 25%


  • Keep your grades up!

    Believe it or not, young drivers can receive considerable discounts on their insurance if they have good grades in school.  The theory behind this is that if young adults are responsible and focused enough to maintain high grades, they can use that same mentality on the road. This is definitely rewarding for all those bright students who have spent a lot of time in the library and studying.

    Estimated savings: Up to 25%


  • Buy a car that is environmentally friendly

    With the growing concern of global warming and other factors that are harming our environment, insurance companies are rewarding drivers who buy eco-friendly vehicles.  This is a major bonus for young and experienced drivers alike, as hybrid or full electric vehicles can be more expensive to purchase.  This is definitely a nice little discount that many insurance companies have implemented.

    green eco friendly car

    Eco friendly cars can reduce your monthly premiums.

    Estimated savings: Up to 10%


The bottom line is that all young adults are always going to be high risk drivers in the eyes of the insurance companies, specifically men, but if you follow these tips then you can save some cash.

By | 2017-08-09T18:43:39+00:00 May 16th, 2017|Insurance, Lists, Money saving tips, The411|

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