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Car insurance under age 25

Insurance—There's no doubt about it, driving a car is expensive. With higher insurance rates and typically smaller paychecks, drivers under age 25 feel the pinch perhaps more than anyone.

While not much can be done about gas prices, young drivers can save money on auto insurance with these five tips:

  • Buy the right car. Cars that are more expensive to repair, or that have lower safety ratings, cost more to insure. Young drivers should steer away from sports cars and SUVs and choose a vehicle with lower insurance costs. Visit the Insurance Institute for Highway Safety, www.iihs.org, to compare vehicle safety ratings.
  • Choose the right policy. Young drivers living at home without a vehicle registered in their name can generally get better rates by staying on their parents' auto policy as an additional driver. Those who do get their own policy might consider a higher deductible on collision and comprehensive, or reduced coverage on older cars worth less than $1,000.
  • Be a safe driver. Keeping a good driving record is essential for lower auto insurance rates. Insurance companies offer discounts for drivers who have not had any accidents or moving violations for a number of years. Taking a defensive driving course also may help with lowering rates.
  • Make good grades. High school and college students who maintain at least a B average are viewed as being more responsible and may qualify for a good-student discount.
  • Keep a good credit record. Young drivers need to be sure that they've paid all bills on time, as they move into buying their own policies. Insurance companies see a connection between poor credit and higher potential for claims, and will charge a higher premium for those drivers with credit issues.

Contact your insurance agent for more information and advice on auto insurance for young drivers.