Older drivers are often more experienced drivers. If they have a license, they have probably had it since they were young and have been driving for years. They either have good experience, or they have bad experience. An older driver who has never been in a car accident or gotten a ticket has a very good record and the insurance company is going to reward them for that with low premiums. On the other hand, if they have caused many accidents and gotten a lot of tickets over the years, especially if it's been recent, they know that you are a risk that could cost them a lot of money, so they charge them more.
Young drivers don't have much experience, if any at all. Teenagers who are new on the road have yet to build a reputation with their insurance company. Their agent doesn't know if they are going to cost them a lot of money or nothing at all. They have to come up with a way to cover the risk.
In order to make up for the lack of experience, they use statistics. They will use statistics in any situation, but they will depend on it more for young drivers. Young drivers are more likely to cause traffic accidents and have traffic violations, so they charge them more. Young male drivers are even more likely and will cost the most.
Sometimes this setup just doesn't seem fair, but ultimately, it has become the optimum way for insurance companies to come up with policies that will benefit the client and keep them from losing money. If the rates are too high for you as a young driver, there are ways to lower the rates. Young drivers often have less money to spare, especially for car insurance, and following these money saving tips can help them get affordable car insurance for young drivers.
Save Money by Getting Insurance Discounts
One great way to lower your premiums is to get discounts on your insurance premiums. If you can follow certain criteria, you can save a bundle. There are several different categories you could possibly get discounts in which means you are more likely to find something that will help you.
You can get discounts for a safe car and safe equipment. If you have airbags, an anti-theft system, anti-lock brakes, etc. you can get multiple discounts. If you drive a safe car, you are less likely to get into an accident.
You can get discounts for being a safe driver because safe driving also results in fewer accidents. For example, if you take a defensive driving course, stay accident free, etc. Again, these discounts can really add up and they will lessen your chances of accidents.
Some other possible discounts include discounts for seniors, getting good grades in school, having multiple policies, etc. When you set up a policy, make sure you ask about the discounts and try to qualify for as many as possible.
Save Money by Raising your Deductible
What is your insurance deductible? The deductible is the first amount you pay in the case that you cause damages in an accident. For example, if you get into an accident and the insurance company will have to pay $800 for damages and your deductible is $300, you will have to pay $300. If the damages are $200, you'll have to pay for it all.
The amount of your deductible is related to the cost of your premiums. If you only have to pay a $200 deductible, the insurance company knows they will have to pay for most of the damages. On the other hand, if you set up a $700 deductible, they know they will have to pay considerably less and therefore they charge you a lot less for premiums.
If you raise your deductible, your premiums will go down, too. There is one important point to keep in mind here. Don't raise the deductible any higher than you can afford. If you get into an accident and you can't pay the deductible, you'll be in trouble. One great idea is to set aside the amount of your deductible in a savings account. If you have an emergency of 6 to 8 months of your living expenses, that's even better. This way you know you can afford to pay it.
Save More Money by Driving Safely
As we discussed previously, having more experience will change the cost of your premiums, either for better or for worse. If you want to steadily reduce your rates over time, being a consistently safe driver can do just that. If you go year after year without accidents and without traffic violations, your rates will go down.
If you don't cause an accident at all, it shouldn't increase your rates. If you avoid all accidents, your premiums will most likely be reduced. If they aren't and it's been several years, you should speak with your agent about it. They aren't going to bring down the rates after 3 months, but if you're paying the same amount after 10 years and you've never been in an accident or had a ticket, something is up.
Some insurance companies also offer accident forgiveness. If you go a certain amount of time without an accident, they will give you a break on some or all of your deductible. Over time, this can be huge savings.
When you shop around for car insurance, make sure you don't just go for the cheapest company. Often getting covered with a company that has the best coverage has plenty of discounts and allows you to raise your deductible to get just as good a rate as the cheapest company. Shop around and don't just go with the cheapest right off the bat.
Here we discussed many ways to lower the rates for car insurance for young drivers. If you are getting a policy for the first time, looking for a better company, or trying to improve the rates with your existing company, take advantage of as many of these ideas as possible to save money.