Car insuranceIf a car tops your teen's holiday gift wish-list, give as much consideration to insurance as you do the car's make and model and the debate over whether to buy new or used.

And brace yourself for insurance premium sticker shock.

Young drivers keep insurers up at night, and you'll pay the price once your prince or princess gets behind the wheel. The accident rate for drivers ages 16 to 19 is higher than for any other driver age group. Sixteen-year-olds top the list, with an accident rate 3.7 times higher than drivers of all ages, and 1.8 times higher for accidents involving alcohol. The majority of citations given to teens -- 52 percent -- are for speeding, according to Tasha Lockyer, auto insurance editor for NextAdvisor.com, an independent consumer information site.

Car sales are expected to be healthy this month and into the first quarter of next year as prices decline from summer highs, says Lacey Plache, chief economist for car site Edmunds.com. So if you also want to get a deal on car insurance for your child, here's what you need to know.

Consider What Counts

When it comes to what makes up the price of your premium, a few factors come into play, such as the type of car being insured, the age and driving record of the person being insured, and the amount of coverage in the policy, notes Phil Reed, senior consumer advice editor at Edmunds.com.

Where and how often you drive also count. Urban areas are usually more expensive than suburban ones, due to higher rates of vandalism, theft, and accidents. If you live in a city, expect to pay more. The more you drive, the more you can expect to pay. "If your teen is just going to be driving to school and back, make sure you include that information in your quote," says Lockyer.

Speak Up

The squeaky wheel gets the grease. Ask for discounts. For example, full time students can cost a little less to insure because many companies offer "good student" discounts (usually requiring a B average or 3.0 GPA), typically between 10-15%. "The discount is significant. Explain it to your teenager and offer to split the savings if they hold up their end of the bargain by meeting the GPA required by your insurance company," says Reed.

Then too, if you've been a loyal customer with few or no claims over a long period of time, you might be able to use that as leverage in getting a better rate.

According to editors at shopautoweek.com, if you insure your child on your policy, you might be able to get the insurance company to assign the least expensive car in your house to that teen. Then make sure that's the only car that your teen drives.

Pick Your Car Wisely

You can go back and forth for days about buying new or used. When you're shopping for a car, decide what type you'll be buying, then call your insurance company and ask about the differences in the premium between new and used, and among various makes and models. You can save a good amount of money by choosing a car with a lower premium, says Lockyer. SUVs and high performance cars in particular can be more expensive to insure.

Consider too that discounts are sometimes given for particular safety features and theft prevention items like auto alarms. You also might benefit by agreeing to install a tracking device that monitors your child's driving.

Read Them the Riot Act

As the holidays are a celebratory season, have a serious talk with your teen about the responsibility involved in driving safely and wisely. The majority of teen driver fatal car crashes occur between 9 p.m. and 3 a.m. "Consider limiting your teen's driving after 9 p.m.," says Lockyer.

It might help your rates, as well as your peace of mind, to sign your teen up for a "safe driver" program.

Know the Laws

Many states have graduated driver's license laws. In general, this means that young drivers can only drive with a licensed adult for the first 6 to 12 months of being licensed. Many of these laws exclude driving at night and limit the number of passengers, and/or underage passengers, a teen driver can have in the car. "Be aware of the laws in your state," advises Brian Moody, lead editor for the car marketplace site, AutoTrader.com.

Once you have the insurance figured out, then there's that other matter -- making peace with the thought of your baby on the road.



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