By the time we get our first car, most of us are thinking "how can I afford one?" Most young consumers will fall into the trap of considering only the short-sighted costs - paying down the actual car. Considering your auto insurance rates, however, is just as vital. On average, an 18-year-old driver in the United States will pay $5,411 for a standard auto insurance policy, on an annual basis. At this rate, in 4 years' time you would have probably spent more money paying this insurance, than for the car itself. In order to save money, and shop wisely, student drivers should equip themselves with as much knowledge as possible. Here I will outline 4 crucial points all student drivers should consider, which have a tremendous impact on the costs of their auto insurance policy.
- Staying on your parents' policy. Many new drivers will be faced with a dilemma: should they stay on their parents' policy, or simply get one of their own? The answer to this question will depend on how one feels about the factors involved. Staying on one's parents' policy will open them up to greater coverage limits, which will reduce the costs in the event of an accident. However, at the same time, parents take on tremendous risk by allowing a young driver to stay on their policy. Namely, their original premiums will skyrocket in the event of any moving violations or accidents the young driver is involved in. This comes down to a discussion between you and your parents.