Automobile insurance is especially costly for new drivers. If at all possible, plan ahead and have your new driver use the oldest car, and purchase only the required liability insurance rather than full comprehensive insurance. This means if they are involved in an accident that is their fault, you will lose the automobile if it is totaled, but you will see from the following example that this may be a risk worth taking. We were going to buy a 9-year-old truck for about $5,000. I got a quote from the insurance company, and my husband thought maybe we should not spend money on purchasing another automobile, and the three of us could just share two cars. I called the insurance company back, and as it turns out, it would cost $800 per year MORE for two cars than it would for 3 cars. Turns out Texas law required that the 16-year-old be considered the main driver for one of the fully-insured cars, and one parent would not be considered a primary driver at all. Having a 16-year-old male driver on a car with full comprehensive coverage is very expensive; so in purchasing this truck for $5,000, we would save $4,000 in 5 years in auto insurance. Granted, if he had totaled the car in an accident we would have lost the truck, but we told him, “If you wreck this car, there isn’t another one; you will have to share with us.” That kid drove that 9-year-old truck for another 9 years until he moved abroad, and our younger son is still driving it today. These older cars with no comprehensive insurance all have some minor body damage to them, require repairs from time to time, but just think about how much money we have saved by not having car payments!
And especially how much we saved in auto insurance—9 years for the older son and 5 years for the younger son at $800/year savings each is a total auto insurance savings of $11,200 since they have started driving—a very substantial savings for the willingness of driving an older car!
I recently spoke with our auto insurance agent, and she said that if a family with two fully-insured cars was planning on adding a third fully-insured car for their 16-year-old driver, they could pretty much expect the cost of their insurance premiums to DOUBLE.