My wife and I have the best driver rating possible for insurance in our state. I need to carry high liability/injury coverage for work. Before my oldest son started driving we paid $2,400 in total for both of us.
When the oldest got his license we gave him an Accord with 130k on the odometer…no collision…it cost us $2,400 just for him, so $4,800 total.
Now he goes to school seven states away. He has a very nice, reliable SUV to make sure he can transport all of his belonging back and forth. It’s a 2007 with 100k miles on it, but it’s worth $16,000-$18,000. We have collision/replacement value on it. We pay $4,200 per year for the truck…so $6,600 total.
I’m losing my mind. I have another son that just got his permit. The prospect of $9,000 for car insurance has me ready to roll the dice that they won’t wreck any cars.
It depends on your specific situation, so the correct answer will vary depending on the person. I personally do not get collision because I believe my chance of making a collision related claim is extremely low (lower than the estimate used in insurance pricing model), and paying out of pocket is not a big deal for me in that extremely rare event. If either of these 2 beliefs differs for you, then the best decision may differ This strategy has worked well for me so far. I’ve had a few supermarket parking lot fender benders while another driver was backing out or opening car door. However, the other driver was always at fault and did not drive off, so their insurance covered the cost.
You might also review in more detail what factors are contributing to the cost and how much it will change when those factors change. For example, how much would the insurance change with a different insurance company? And how much would the cost change after he has been driving a year with different companies? Or how much would the cost change with a car make/model known that is known for low collision insurance cost?
You might also consider options that are less financially generous towards your son. You said he’s 21. He’s an adult. Why are you paying for everything? Why isn’t he more involved in the process? I’d expect most parents don’t pay car insurance for their 21-year-old kid, and certainly don’t buy them cars.
If it helps, I bought my first car when I was 16. It cost about $4500. I did not have collision on it. I believe I paid about $75/month for the insurance. I bought a new car when I was 21 and that one I did have collision on because I had a car loan. Will you be taking a loan for this car or buying it out right? In our state, you need collision if there’s a loan. Just a thought.
We will be buying outright. I think we’ve decided to get collision the first year when he’s most inexperienced. We will look at dropping it after that. Got a line on a car we might be able to get closer to $11k. It does feel like a bit much for a kid’s car but part of our thinking is we already have 2 cars in the family with 150k miles on them but they’d be less safe for a new driver. Also, I don’t want the repairs of another old car so pay extra few thousand now for safety features and less maintenance cost. Going with a CR recommended car and 5 star top safety pick. Idea is this will get him through college and be the only car we buy him (we hope!)
Get the collision. You the car for this new driver will be the newest in the family fleet.
I will say, in the Thumper family, the parents got the new cars and the kids got the hand me downs. But then, a hand me down in this family was something like a 10 year old Volvo with 175,000 miles on it…that worked just fine. Parent got a new Volvo.
If you’re buying outright and can afford to replace the new car if totalled, why worry about the cost of collision?
Newer cars are not what makes a car safe® or not. It’s how they’re constructed, how they survive a crash and protect the people inside. Volvo is a great example.
Seems you’re driving the 150k+ cars, you do trust them, no? Try to distinguish between the generous gift of a nice used car vs what’s really “enough.” Imo.
We have full coverage on all our cars as required by the insurance company to get 1M in liability. D has her 3 year old car garaged in CA (where she attends college) and her policy went up to 4K per year! yikes. It was 2.4K in MA. Supposedly it should go down next year after having driving for 3 years. We have full insurance on our 4 other cars ranging from 10 years old to 3 years old and the policy runs around $900 per year. We carry a large liability policy for other reasons but it does effect what we need to carry for auto.
@lookingforward – one of the 150k cars is driven by my daughter and the other by my husband. We talked about giving his car to our son and him getting a new car, but it’s a Honda Fit and we both decided it’s not great choice for a new driver – too small and tin can like. Plus, he likes his zippy commuter car and is totally fine hanging on to it. He really just doesn’t care about cars which is evident by the mess he makes/keeps in it!
For the record, even after this purchase I’ll have the nicest car in the family – love my still somewhat new Honda CR-V!
However, increased buyer attention to safety and marketing by the IIHS of its crash test and other test results has incentivized car companies to increase some safety aspects of design in newer designs over the last few decades.
Don’t have the energy to read through all responses to see if this has been addressed, but this is a no-brainer to me. Get a quote from GEICO, they don’t price up for younger drivers. Put whomever in the family had has the least accidents/tickets on the most expensive cars as the primary driver. Don’t think I would put him on as a primary driver, unless I had to.
Unless GEICO has changed their policy, I’ll bet it halves your cost. They don’t jerk you around, either.
I think if they have a car per person in the family, this boy will have to be a primary driver on one of the cars.
When our son got his license, it more than doubled our car insurance because we had a third car…and three drivers. I almost choked. I called the insurance company, and they politely told me that even with drivers ed, honors student discount and the like, teen boys who have a car are pricey.
I’m hoping Geico has changed because when we called for comparative pricing it was almost the same cost per year.
The good news was when we added the teen female driver three years later, the cost increase was very minimal…we had four drivers, and three cars, so she wasn’t assigned as a primary driver on any car.
@thumper1 , I don’t recall if they made us put a kid on one of our cars as primary. However, since GEICO doesn’t price up based upon age, I don’t think it matters very much. All I know is that we had USAA for 25 years, and the price they quoted us was about DOUBLE of what GEICO did, so we switched.
When I asked USAA to match, they said they couldn’t, and GEICO was their primary competition.
“Newer cars are not what makes a car safe® or not. It’s how they’re constructed, how they survive a crash and protect the people inside. Volvo is a great example.”
How cars are constructed is an important factor, but there are others. My younger daughter drives a car that has blind spot detection and rear cross traffic detection (Mazda 3). My older daughter, who was at high risk of distracted driving early on, drives a Honda Civic that warns if she drifts out of her lane, and has emergency braking in case of impending collision. Those features aren’t available on older cars, but are more likely to be useful to a green driver than to me.
Echoing @busdriver11 , our insurance halved when we switched to Geico from Allstate. It’s almost embarrassing to admit how much we were overpaying, but oh well. I hate to sound like a commercial, but it’s pretty amazing.
And at one point, ours nearly halved when we changed to one of the AAA insurers. Plus, we were adding our daughters and also got a better deal on homeinsurance by bundling that in.
Geico is cheap…and not fun to deal with if you ever have a claim.
Anecdotally…I live in a super high insurance state and my premium barely went up with liberty mutual when we added him on. We allowed them to switch us to their credit based rating system, which saved us a fortune. The state doesn’t allow them to switch everyone over automatically, but when we gave permission the rates were awesome (of course, if you don’t have good credit it won’t help).
I’m surprised a state caps a deductible at $1k. That’s ridiculously low.
My son’s truck was liability only, owned by his grandfather and he was taking care of insurance. He totalled his truck last night, thankfully he is fine, but now his only option is my parents old 1996 buick, at least it’s something.
@CIEE83 – that’s exactly why we’re targeting a Mazda3 touring for my son, as a matter of fact.
This NYT article changed my thinking about cars for new drivers. It recommends moving away from the advice of an older, bulky car for a new driver and instead focusing on safety features and crash test results.
We can get a 2014 or 15 Mazda3 with brake assist and blind spot monitoring for around $12k which I think is a pretty good deal. So rather than getting my husband a new car (that would likely have those features) and passing down his old car w/o those features to our son, hubby will keep driving his old car (which he also likes) for a few more years. Realize not everyone would make same choice!
We have USAA. Interesting about Geico possibly being lower.
@HeartofDixie – sorry about your son’s accident but so glad he’s ok!