The thrill of knowing your son or daughter is capable and licensed to drive can be rewarding, but when he or she gets a first car, you may be wondering about the financial side of things. After all, your teen driver is inexperienced and, even without any tickets, your child is a risk to insurance companies. When it comes to auto insurance, who should own the car? Should you allow it to remain in the name of your son or daughter or, as a parent, should you maintain the ownership?
Be Honest About Ownership and Use
One key thing to remember as you consider car insurance for your teen driver is what is truthful. If your teen driver will assume all responsibility for the vehicle and it is no longer your responsibility, he or she should own it. Further, whatever you list for ownership at the DMV should carry over to your auto insurance plan. And, no matter who owns the vehicle, be sure to be honest about the usage of it. In short, if your teen is driving the car, you should communicate that information to the auto insurance company. It may help you save money, but also help smooth out the claims process if an incident arises in the future.
What if You Own It?
As an adult, there may be several key benefits to you if you maintain ownership of your teen's vehicle. For example, if the vehicle is yours and in your name, it may be bundled into your other insurance plans. This bundling with other car insurance, home insurance or other plans you have from the same insurer can reduce the costs significantly.
Additionally, teen drivers are some of the most expensive to insure. Over time, their rates often come down. However, it is very important for parents to monitor the costs associated with car insurance. You may find that it is best to maintain ownership of the vehicle to keep costs affordable.
Be honest and upfront with your insurance company about who is operating the vehicle, what he or she will use it for and who accurately owns it. Chances are your agent can help you save money with an affordable auto insurance plan.
Get a quote today. Call Hill & Stone Insurance at 847-295-3030 for more information on Illinois auto insurance.
Do you have a teen who recently began driving? Feel free to share your experiences (or tips for other parents!) in the comments section below.