Car insurance premiums and teenage drivers.

Those two ideas are enough to send any parent running for the hills. Safety and affordability are generally at the top of mind when beginning the search for your teenagers first car. But hidden costs, such as insurance, often catch many families by surprise after they have picked what they consider a smart balance of the two. Over the years our staff has had many conversations about the best ways to control overall costs for new teenage drivers, and insurance is often a large component to that. The physical damage coverage for a car generally accounts for the largest portion of the cost when insuring a new teenage driver. So older cars that you can purchase outright will be the biggest help in keeping overall cost down as you will not be required by a bank or dealer to carry physical damage. In addition, you do not have as much invested should the vehicle be damaged.

Huge insurance premiums?

Understandably so, most parents want the safest possible car for their child, so they will always look to a newer car. However, there are a few common new vehicles that appear inexpensive at first but end up having huge insurance premiums associated with them. For example, the Kia Forte has an annual premium for new licensed teenagers of over 20% of the purchase price of the car, with the MSRP being $15,900 and the average premium being $3,282. And this was for a driver with very low limits. If the parents have a policy with higher liability limits, the cost only increased from there. A few other expensive cars to avoid include the Mini Cooper Hardtop, Mitsibishi i-MiEV, Scion tC, Kia Rio, Hyundai Accent, Mitsubishi Lancer, Ford F-150, Honda Civic and Hyundai Elantra. All these vehicles have premiums that far exceed $3,000 a year and cost under $25,000 to purchase.

So what are some better new car options you might ask?

Well the Mazada MX-5 is a surprisingly fun, sporty car with a low entry price and reasonable premiums. The new Miata has an MSRP of $23,720 and an average annual premium of $2,640. A fantastic safe, and a little more practical option, is the Subaru Outback with an MSRP of $23,495 and an average annual premium of $2,375. Other vehicles that make the top 10 include, Volkswagen Golf GTI, Mini Countryman, Volkswagen Routan, Smart Fortwo, Fiat 500L, Honda Odyssey, Subaru Legacy, and Mini Paceman.

Ultimately a used car from the mid to late 2000's will provide the best balance of cost and safety. By this point safety features such as dual airbags and antilock brakes were standard. These cars have low purchase prices and inexpensive and plentiful parts for repairs. They are generally comfortable and will supply a high amount of reliability when properly cared for. But if you do plan on venturing into the newer car market, remember, the lowest purchase price isn't the only thing to consider. It is always smart to call your agent ahead of time with a few different options and ask for a quote before you buy. Getting stuck with a huge insurance bill is the last thing a parent or young driver wants to hear when celebrating their new road bound freedom!


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