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Guide to First-Time Driver Insurance Cost: Everything You Need to Know for 2023

Guide to First-Time Driver Insurance Cost: Everything You Need to Know for 2023

Becoming a first-time driver can be an exciting moment, but it also comes with a lot of new responsibilities. Passing your driver's test, finding a car, and learning how to maintain it are all tasks you'll need to undertake before you get on the road. One of the most significant responsibilities that new drivers have is getting their vehicle insured. A new driver's insurance cost can be high, but you may be able to mitigate some of the financial responsibility by researching beforehand.

How Much Is Car Insurance for a New Driver?

On average, a new driver can expect to pay a at least 20% higher rates than an experienced driver, with the most basic liability coverage costing hundreds or thousands of dollars each year. The exact cost of insurance for new drivers will vary based on a variety of factors, including:

  • If they have any driving history or previous moving violations
  • Date of birth
  • Current credit score
  • Their vehicle's make and model
  • What state do they intend to drive in

Many new drivers, especially teenagers, will have no driving history for an insurance company to look at. The same situation applies to adults who are getting their driver's licenses for the first time in their life. The only time a new driver may have a previous driving history is if they are new to the country.

How Can You Reduce a New Driver's Insurance Cost?

How Can You Reduce a New Driver's Insurance Cost?

There are a few ways you can reduce the cost of a new driver's insurance:

  • Choose Anything but a Luxury Vehicle: The more expensive the vehicle, the more costly it will be to insure. By choosing a cheaper car, first-time drivers can avoid the high premiums associated with luxury vehicle coverage.
  • Compare Rates: You'll want to get quotes from multiple insurance companies to see who can offer you the best rates. Different insurers will look at varying factors when deciding how much a premium will be; you may be surprised at the range of rates you can get simply by looking.
  • Stay On Parents' Policy: If the parents of a new driver have car insurance, it can be much easier to stay on their policy. Instead of looking at a new driver's information and credit history, insurers will look at their parent's background, making premiums far more affordable. The only catch is that the new driver can not hold the title to a vehicle or declare residency outside of the parent's home.
  • Choose a Low Premium Plan: Opting for a higher deductible is another way to reduce monthly insurance payments, though it can come at a cost. If you end up needing to file a claim, there will be more out-of-pocket costs before your insurance kicks in.
  • Pick the Right Insurance Company: Some insurance companies are more lenient on first-time drivers, offering better rates and lower average premiums. The cheapest insurance for first-time drivers comes most commonly from companies like USAA, Nationwide, and GEICO. The driver may need to meet certain criteria to get these policies: USAA, for example, requires new drivers to be in the military or belong to a military family.

Can You Get Discounts
on the Cost of New Driver Insurance?

Can You Get Discounts
on the Cost of New Driver Insurance?

Many insurance companies offer specific discounts for qualifying first-time drivers. Some of these discounts include:

  • Good Student Discount: If a new driver is in school, under the age of 25, and has a GPA of 3.0 or above, they can qualify for a good student discount. To get this discount, you'll need to provide your insurance company with an official transcript on an annual or semi-annual basis.
  • Safety Equipment Discount: Having specific pieces of safety equipment, like anti-theft devices, driver assistance systems, and even basic equipment like airbags, may qualify a new driver for a discount. Make sure to tell your insurance company about any safety equipment your vehicle may have before you begin paying for a policy.
  • Defensive Driving Discount: Some insurance companies will allow a driver to take a defensive driving course, which can teach a number of tips to help avoid accidents on the road. Because these classes can reduce the number of accidents you get into and claims you file, they'll offer a discount on your yearly costs. Provide your insurance with a copy of your defensive driving class transcript or receipt to see if you qualify.
  • Occupational Discount: Some jobs may make a new driver eligible for an insurance discount, including those working in law enforcement, education, or the medical field. You'll need to provide your insurance company with proof that you hold this job or that you have a degree in a qualifying field.
  • Good Driver Discount: While new drivers aren't eligible for these discounts initially, maintaining a clean driving record is the best way to get one of the most significant premium reductions: a good driver discount. To qualify, you'll need to prove that you have no history of moving violations, citations, or at-fault accidents.

Can a Vehicle's History
Affect New Driver Insurance Rates?

A vehicle's previous history can absolutely affect how much a new driver pays for insurance, even if certain events occurred before their ownership. Because of this, it's best to use tools like vehicle history reports to get as much information as possible before you finalize a purchase. These tools can show you a vehicle's accident history and help you find out whether a car has ever been declared "totaled".

Even if a car has been repaired, vehicles that have previously been in a major accident may carry hidden damage and therefore be riskier to insure. You may find that, even with new driver discounts, some vehicles are simply too expensive to insure. In some cases, insurance companies may even refuse to provide a policy on certain vehicles. It's always better to do research before buying a car, as many unscrupulous sellers will hide a negative history just to make a sale.

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