NEW YORK (8/6/13)--To many parents, it's a relief when their kids get drivers' licenses. They can cart themselves around, help transport siblings, and even pick up a few things from the grocery store. But the convenience of having an extra driver in the house comes at a cost; it's a given that insurance premiums will increase (CBS News July 22).
Young drivers pay more for auto insurance than any other demographic for good reason. The Center for Disease Control and Prevention finds that crash rates for 16- to 19-year-olds are four times higher than those of older drivers. Traffic crashes are the leading cause of death for teens, according to the National Highway Traffic Safety Administration.
While households in Hawaii see only an average 18% annual increase in insurance premiums, households in Arkansas experience an average 116% increase. Adding a young driver to a family auto policy will increase the annual premium by an average of 84%--or about $2,000, according to a new study by insurancequotes.com.
Regardless of where you live, follow these strategies to lower insurance costs for young drivers:
For the best price auto loan for your young driver, visit the professionals at your credit union. And for more information about auto insurance, read "Save on Auto Insurance: Drive Safely, Drive Less" in the Home & Family Finance Resource Center.