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Banking and Finance  » Have a Teen Driver? Learn How to Save Money on their Car

Have a Teen Driver? Learn How to Save Money on their Car

Article:

Boca Raton, Fl -- Did you know when parents add their teens to

their car insurance policies, premiums can jump from 100 percent

to 355 percent even if the teen is driving the family minivan?

There are several different ways to get lower premiums for your

teenagers. Many insurance companies offer online tutorials that

teenagers can take and if passed, companies will offer

substantial discounts. For example, State Farm has an online

tutorial called "Steer Clear" and if the new driver passes it,

State Farm will give up to a 15 percent discount to first time

drivers. Many other insurance companies have similar online

programs that offer discounts for teens. Esurance, an online car

insurance company, gives discounts every six months for clean

driving records. Yes, a clean driving record means no speeding

tickets.

According to Statefarm.com, here are a few insurance tips for

teen divers and their parents.

* Call around to different companies and compare prices with

discounts that will better suit your needs.

* Be aware that your insurance rates will typically be increased

when a new driver is added to the policy. If you are not adding

a new vehicle to the plan, it is best to have the teen as a

primary driver of one of the family cars.

* Take advantage of student discounts. In most states, students

at accredited high schools, colleges and universities can get

discounts if they have a grade point average of a B or higher.

* Talk to your teen about safe driving habits and how traffic

violations can increase their rates.

* If you are planning to buy a brand new car for your teen, you

may want to check which vehicles get the best rates.

* Most Insurance Companies use three different ways to rate cars

in terms of damage, safety and liability.

1. The Damage and Theft Index (DTI), rates vehicles on the cost

of payment for damage and theft.

2. The Vehicle Safety Discount (VSD), awards discounts up to 40

percent for car models that generate lower payment for injury to

occupants in the vehicle.

3. The Liability Rating Index (LRI), rates vehicles on the

amount of damage and injury it causes to the other vehicle and

its occupants.

* Consider getting a Personal Liability Umbrella Policy (PLUP).

If you or your teenage driver accidentally injures someone or

damages their property, you could be sued. Even though your

underlying policies may provide substantial liability limits, it

is not uncommon today for juries to award damages that exceed

those limits.

There are many different areas insurance companies look into

while quoting you a premium for you and your teen. Companies

will look at what kind of deductible you want, the kind of car

you drive, the areas you drive in, the amount of time you are on

the road, your age and sex, your driving record and even your

credit history. So if you live in a major metropolitan area with

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high auto theft rates, chances are your rates will be much

higher than a person who lives in the suburbs with low auto

theft rates.

Here are other ways to save yourself and your teen some money

when buying car insurance.

* Most companies give an Anti-Theft Device Discount for cars

that have car alarms and other forms of security.

* If you have ever been convicted of a moving violation or have

been an in accident, take Driver Improvement Courses to improve

your chances of having a lower rate. Many of these courses can

be taking on the Internet now.

* Teens can get discounts if they complete a Drivers Education

course through their school or accredited agencies.

* Vehicles that have airbags, anti-lock brakes, head restraints

and day-time head lights can also get you a discount on car

insurance.

Everyone knows that car insurance can be really costly, but

there are ways to slash the price if you ask about them

About the author:

Pete Glocker is employed in the Education and Charitable

Services Department at Debt Management Credit Counseling Corp.

("DMCC"), a 501c(3) non-profit charitable organization located

in Boca Raton, Florida. Pete graduated from Florida Atlantic

University with a BA in Multimedia Journalism and is an

experienced web producer for Tribune Interactive products

Sun-Sentinel.com and SouthFlorida.com. E-mail Pete at

pete@dmcccorp.org