Many people buy cars in the spring, using their tax refund as a down payment. Your low-rate loan from Bowater Credit Union will help keep your teen’s car payment low, but don’t forget to calculate the cost of vehicle insurance.

Some factors that affect costs are within your control, while others reflect an objective assessment of increased risk from having a teen at the wheel:

  • Gender: Males have more accidents than females so they cost more to insure.
  • Residence: Rates are higher where repair costs are higher or accidents are more frequent.
  • Grades: Good-student discounts granted to teen drivers who maintain a B average or better can reduce rates by 10% to 25%.
  • Type of vehicle: Pick a safe car. More expensive vehicles, sporty models known for speed, SUV’s, and vehicles that preform poorly in crash tests cost more to insure.
  • Operator Status: If you have more than one vehicle, ask your agent which vehicle costs less to insure for teen drivers and designate the teen as the “principal operator” of that vehicle. Also, let your insurer know if a teen is going away to college–rates are often reduced for students attending school at least 100 miles away and who don’t have a car on campus.
  • Insurance coverage and limits: Consider dropping collision and comprehensive insurance coverage on older vehicles. Increasing the deductible can also reduce the premium costs–but then you will pay more in the case of an accident
  • Driving record: Teens who get speeding tickets or are involved in accidents will cost more to insure. When that happens, consider moving the teen driver and vehicle to a subsidiary company that specializes in coverage for high-risk drivers.