If you are a young driver and can’t afford coverage alone, you can save money with car insurance under a parent’s name. For teenagers, auto insurance is one of the first major expenses they are required to pay. 

Many young drivers can’t afford both a car payment and the cost of auto insurance. Auto insurance rates for young drivers have gone up in recent years, especially for those young motorists under 20 years old. This puts many teens in a position where they can only afford auto insurance if the policy is under the parent’s name.  

One solution that saves teen drivers money is putting the vehicle title in the parent’s name and on the insurance policy. Next, the parent adds the teen as a driver to the policy. This can save a teenage driver hundreds per year, often over $1,000 annually.  

What is Car Insurance Under Parent’s Name?  

An often-needed solution to expensive teen auto insurance is to have the policy under a parent’s name. But what exactly does that really mean, and is it the right choice for you?

First, let’s define what we mean by “under a parent’s name.” Essentially, this means that your parent or guardian is listed as the primary policyholder, and you are listed as a secondary driver. In most cases, this will be cheaper than getting a policy in your own name since insurance companies view young drivers as higher risk.

But there are also some potential downsides you need to take into consideration. For one thing, if you get into an at-fault accident, your parent’s insurance premiums could go up quite a bit. This means that your poor driving resulted in your parents paying more for auto insurance coverage, even though they didn’t get into the accident. This is one of the risks parents take when they decide to put their teen driver on their policy.  

Is it Smart to Get Car Insurance Under a Parent’s Name? 

First, let’s be clear and state that there isn’t a one-size-fits-all answer to this question. It really depends on your unique circumstances and priorities. However, for most young drivers, it comes down to cost savings.

Car insurance can cost double or even triple the amount for teenage drivers than motorists over thirty years old. For many young people, the difference between being able to afford auto insurance or not depends on their parent’s putting them on their policy. So it’s definitely the right call if you are in this situation. 

Advantages of Car Insurance Under Parent’s Name 

One of the biggest advantages of adding a teenage driver to a parent’s policy is that it can be significantly cheaper than a separate policy under the teen’s name. This is because insurance companies generally view younger, less experienced drivers as higher risk, charging them a lot more. By being added to your parent’s policy, you may be able to take advantage of their lower rates and save yourself some serious cash. 

For example, let’s say you own a 2015 used Mustang with a V6 engine. A teenage driver who goes out and tries to get a cheap auto insurance rate on their own might cost them $350-$450 monthly for comprehensive coverage.  

Putting the vehicle in the parent’s name and adding the driver to the policy might cost $300 or less per month, depending on the insurer. While nearly every teen craves independence, with today’s rising car insurance cost, it might be the best route to get car insurance under a parent’s name.   

Qualify For Discounts

Another thing to keep in mind, if you’re a student and still living at home, is that you may be able to qualify for discounts that you wouldn’t otherwise be eligible for. For example, some insurance companies offer a “good student discount” to those who maintain a certain GPA, often 3.5 or higher. By being under your parent’s policy, you can benefit from this discount even if you’re not paying for the insurance yourself.

Another discount that can save teens money on car insurance and possibly their lives is completing a defensive driver course.  Completing a certified defensive driving course can save teen drivers about 10% off their car insurance policy. 

Taking a defensive driving course isn’t just about saving money. It’s about learning valuable skills that will keep you safe on the road. As a young driver, it’s important to invest in your driver education that will improve the safety of others on the road.

Many defensive driving courses can be taken online, so you can complete them at your own pace and from the comfort of your own home. Most online defensive driving courses only cost about $25, which you will save on your insurance policy in a month or two.  

The Downside of Car Insurance Under a Parent’s Name  

Auto insurance has some potential drawbacks under a parent’s name. One is that you may not have as much control over the policy, if any at all. Since it’s technically under your parent’s name, they may have the final say in certain decisions, such as what coverage to get, the limits, or what deductible to choose. However, this may not be a big deal for everyone.

Another thing to keep in mind is that if you get into an accident while driving, it could potentially affect your parent’s insurance rates. This is because the accident will be recorded under their policy, and your parents may be viewed as a higher risk as a result. However, if you’re a responsible driver and don’t get into any accidents, this shouldn’t be anything to worry about.  

Cheapest Car Insurance Companies For Teens Added To Their Parent’s Policy 

Teens just don’t get a fair shake when it comes to auto insurance rates. They pay more for coverage than any other age group. Here are a few insurers with the best comprehensive insurance rates for drivers aged 16-19, added onto their parent’s policy.   

Final Takeaways

All in all, opting for car insurance under a parent’s name can be a smart move for many young drivers. Just make sure to do your research and consider all your options before making a final decision. To compare car insurance under parent’s name quotes, start by entering your zip code. Comparison shop ten or more quotes and save more with direct rates.