Insurance companies don’t trust teens – it’s really as simple as that.  Statistically, teen boys and girls are in the highest risk categories for having accidents, and insurance premiums rise exponentially whenever a teen is on the policy.  However, you don’t have to let your premium rise out of control simply because you have a teen on your policy.

There are several ways you can do this.

1. Buy them the cheapest car possible

The most critical aspect of teen driving that insurance companies look at is the value of the car that the teen is driving.  This doesn’t mean that you should buy them a fifteen year old junk car – but it does mean that you’ll save a lot more on your insurance bill if you buy them a Ford Focus instead of a Ford Mustang. it is near impossible to get cheap car insurance for young drivers with fast cars.

2.  Buy them the safest car possible

Refer to the resources listed above in this guide to determine the safest cars on the market.  While a 200 horsepower sports car might be tempting for a teenage boy, the insurance costs will be enough to drive a family into bankruptcy.  Instead, focus on buying not only the least expensive car, but also the car that is listed on the very top of the national safety list.  These two things alone will make a world of difference for your premium.

3. Don’t ask, don’t tell

While the ethics are questionable, it is not illegal – simply don’t tell your insurance company that there is a licensed teen in the family.  Insurance companies will charge higher premiums if there is a licensed teen living in the household, regardless of whether they are listed on the policy for a particular car.  The simplest approach is to purchase the car and insure it under your own name as an additional car on the policy with yourself and your spouse (if applicable) on the policy.  The teen can be considered an occasional driver, but not a primary driver – therefore if the insurance company doesn’t ask if you have a licensed teen in the family, simply don’t tell them.

If the teen is ever pulled over by a policeman for any reason, the insurance card is still legitimate and so is their license.  Just keep in mind that the moment the teen receives a citation or has an accident, the insurance company will immediately know the teen is driving the car, and your rates will be adjusted accordingly.  It could be a costly risk to take – but meanwhile it will save you tremendously.

4. Choose a high deductible

If you do plan to insure your teen on a new inexpensive and safe car, an additional way to reduce the insurance costs is to purchase a high-deductible insurance policy.  Any insurance plan with a high deductible will always cost significantly less than a low-deductible policy.  This is because you are accepting responsibility for a larger amount of any repairs resulting from an accident, so insurance companies are much more willing to offer you lower rates for the teen driver to be listed on your policy for that car.

5. Negotiate prices

Just because you have a teen driver doesn’t mean they can rake you over the coals.  Shop around!  Get the lowest rate possible, and then call the other insurance companies and tell them the lowest rate that you were able to get, and allow them an opportunity to beat it.  Sometimes, you can get a competitive rate even lower than the lowest quote from the initial round of calls.

Make the higher rate car the less used and garaged

Another approach you can use to take advantage of insurance policies is to use the car with the lowest insurance rates to commute to work.  Accumulating most of your mileage on the car that has the lower rates will allow you to take advantage of low-mileage discounts on the car that is more expensive to insure.  If your spouse stays at home with the kids, make their car which gets used the least the primary car.

Arranging the usage of your vehicles in this way will allow you to significantly reduce your overall premium because each car is calculated individually.  Since one car is already inexpensive to insure, it doesn’t really matter how many miles you place on it.  However, when you do have a car that is more expensive to insure, such as newer vehicles, you need to do everything you can to reduce the usage on that vehicle so that the insurance rate for it is lower than it would be if you used it to commute to work.

This doesn’t mean that you can never use the new car to go to work – it just means that you’ll be telling the insurance company that this is the arrangement.  Just keep in mind that insurance companies do verify mileage from the yearly registration – so try not to stretch the truth too much.

6.Pay the premium annually instead of monthly

Most car insurance companies provide the option for policyholders to pay off the entire premium all at once (annually), or at regular intervals – semi-annually, quarterly, or monthly.  Most of the time insurance companies will offer a lower premium if it is paid annually – sometimes saving policyholders up to 10% on their car insurance.