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Steps you can take to cut the cost of your car insurance when adding a teenager.

When your son or daughter reaches the teen years finances change too. Adding your child onto your car insurance can be financially overwhelming for some parents. Below are some tips on how to cut this cost.

Find out how your insurer assigns drivers to cars. This differs from insurer to insurer and can make a huge difference in the premium you pay.

For example, if there are three drivers and two cars in your household, some insurers will assign the driver who’s the most expensive to insure (your child) to the car that’s the most expensive to insure.

The above example can cause your premium to double or even triple overnight, particularly if you have new or luxury cars. If that’s the case, it might be cheaper to get your teen his own car, especially if it’s an old beater that just sits in the driveway most of the time.

Do some research and possibly switch insurers. Some companies allow you to make the choice of assigning drivers to cars. This way you can save money by designating the teenage driver as the driver of the older of the two cars.

Another option may be a policy of their own for their own less expensive car. You might want to get quotes for both approaches, then decide once you know the coverage and cost.

It pays to have good grades. It’s kind of an open secret in the insurance industry that straight-A students aren’t really that much safer than C students. But many insurers still give a 10% to 25% discount to teenagers who maintain a B average or better, because these kids are seen as better future risks.

Having taken driver’s ed. Here’s another way to knock 5% to 15% off many insurers’ prices. Also, most insurers have videos and instructional booklets on driver’s safety and may give you an additional price break for using those.

Increase your deductibles. Higher deductibles can reduce your premiums as much as 35%, and it’s simply smarter to use your insurance for the big disasters rather than covering the small stuff you can pay out of pocket.

Take your college student off the policy. This only makes sense if a) he won’t have a car and b) you can trust your kid not to drive while he’s away or home on short breaks. Otherwise, you are literally risking your family’s financial health. If he causes a serious accident while not insured, you could be sued and wind up bankrupt. It will also be less convenient for you, since you’ll need to shuttle him around when he’s home for holidays.

Don’t buy new cars. Some parents understandably want all the latest safety features for their kids, or they want to give a current car to their teens and replace it with something new.

But new cars cost a lot more to insure than older cars. If you really want to limit your overall insurance costs, don’t buy a new car either for yourself or your child.

Consider not reporting fender-benders. Sure, insurers hate this idea, because they want to know about every single scratch so they can adjust your premium accordingly.

But given how much a single accident can raise a teenager’s premiums, it’s often more cost-effective to pay for the small stuff out of pocket and not report it to the insurance company. Better yet, make your teen pay for the repairs.

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