How to Add a Teen's Car to Your Insurance

You've been playing taxi driver for your high schooler for a few years, and now that she's gotten her driver's license, she's borrowing your car, leaving you stranded. Maybe it's time to consider getting her a car of her own, but what impact will that have on your car insurance?

It's a daunting prospect, especially since the average annual cost of car insurance was $907 in 2014, according to data site ValuePenguin¹. And insuring teens can be vastly more expensive — it costs, on average, $6,456 a year to insure an 18-year-old², although your teen may get a different rate. (And if you're insuring your teen on your policy, you've already taken something of a hit — so you're just taking on another car and designating your teen as the driver.) Here are some things to consider:

• What kind of car would you buy? While it’s a subjective decision with many variables to consider, you may want to consider the impact your choice will have on your car insurance rates. You may pay more if you buy a car that's costly to fix if it's in an accident, such as a hybrid. But if you decide you want to go the hybrid car route, be sure to explore whether there is a hybrid discount available. You will also want to check with your insurer before you purchase to make sure the car you're considering won't cost an arm and a leg to insure because of its reputation as being expensive to repair.
• How would it be used? If the additional car would be primarily for a short school commute or for casual use, make sure your insurer knows this. You may get a discount for a car that isn't piling on the miles or used in a lengthy work commute. 
• Have you bundled your insurance policies? Bundling means buying more than one kind of insurance from the same company. So, for instance, where available, you could purchase both your home and your auto coverage from the same insurer — and generally that company will give you a discount on one or both policies. If you're adding a third car and don't have any other policies with your car insurer, it's worth pricing out the option. 
• Have you gotten other quotes? Generally, having three cars insured with the same company will cost less than splitting them up, but with a teen driver, that's not a given. If adding the third vehicle with your teen as the primary driver is too pricey, review your coverage to make sure it is the best value for your coverage.   
• Would your teen take a class? Depending on your insurance, you may get a slight discount if your new driver participates in a driver training or defensive driving course, which he or she may be able to do online, depending on your state. In fact, you may get even more of a discount if all of the drivers in the house take the defensive driving course. Ask your insurer what that might do for you.
• Good student discounts are out there, too. If your teen is earning good grades in school, he or she also may qualify for a discount for that as well.

With so much competition among insurance providers, your family can benefit from inquiring about all of these possible options to secure the best car insurance policy for your budget and your protection. And think about the new freedom you’ll enjoy once your teen isn’t borrowing your car anymore.

Sources:
¹ “Average Cost of Insurance: Car, Home, Renters, Health, and Pet (2017)”, ValuePenguin.com, 2017, https://www.valuepenguin.com/average-cost-of-insurance#car-insurance-rates-by-age
² “How Age Affects Car Insurance Costs,” ValuePenguin.com, https://www.valuepenguin.com/how-age-affects-auto-insurance-costs