The words “affordable” and “insurance” really should not be used together, specifically when trying to find the best insurance rates for teenagers. Because it’s not cheap, let’s familiarize you with a few of the factors that determine auto insurance premiums, and see if you can take the sting out of your next policy.
Figuring out which company has the cheapest car insurance rates for teenagers will take a little more work in order to find the most economical policy. Each insurance company uses their own method to set their prices, so let’s take a look at the car insurance companies that tend to be cheaper in Detroit, MI.
Find the Cheapest Car Insurance for Teens
|Rank||Company||Cost Per Year|
|7||Pioneer State Mutual||$1,488|
|18||Auto Club Group||$2,391|
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USAA may offer some of the best car insurance rates in Detroit at around $987 annually. This is $1,406 less than the average premium paid by Michigan drivers of $2,393. GEICO, Safeco, MetLife, and Chubb also rank well as some of the lowest-priced Detroit, MI insurance companies.
As the rates illustrate above, if you currently have coverage with Chubb and switched to GEICO, you might realize a yearly price reduction of in the vicinity of $393. Customers with MEEMIC could save as much as $401 a year, and Pioneer State Mutual insureds might lower prices by up to $495 a year.
Understand that those policy prices are averages across all ages of drivers and types of vehicles and do not factor in a specific location for teenagers. So the company that can offer you the best rate may not even be in the top 30 companies in the list above. That is why you need to get quotes using your own driver and vehicle profiles.
One of the many criteria that determine car insurance rates is where you live in Detroit. Areas with more people or higher crime rates tend to pay slightly more, whereas areas that tend to be more rural benefit from lower rates.
The next table ranks the highest-priced areas in Michigan for teenagers in which to purchase auto insurance. Detroit ranks #1 with an annual rate of $4,813 for the average policy, which is around $401 each month.
|11||St. Clair Shores||$2,736|
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Rates are approximated as specific location information can modify auto insurance rates noticeably.
The vehicle model that needs insurance is probably the largest consideration when comparison shopping for the best cheap coverage for teenagers. Vehicles with average performance, an excellent safety record, or a track record of few liability claims will cost quite a bit less to insure than fast, unsafe models.
The next list features coverage rates for the cheaper automobiles to buy coverage for.
|Make and Model||Estimated Cost for Full Coverage|
|Hyundai Elantra GLS Touring Station Wagon||$17,112|
|Honda Accord LX-P 4-Dr Sedan||$17,121|
|Honda CR-V EX-L 4WD||$17,268|
|Ford Escape Limited 4WD||$18,308|
|Chevrolet Silverado LS Regular Cab 4WD||$19,095|
|Dodge Grand Caravan SE||$19,250|
|Volkswagen Jetta 2.0T Station Wagon||$19,500|
|Ford Edge Limited 2WD||$20,136|
|Honda Odyssey EX||$20,142|
|Chevrolet Impala LS||$20,136|
|Jeep Grand Cherokee Laredo 4WD||$20,291|
|Chevrolet Equinox LS AWD||$20,301|
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Data assumes single female driver age 16, no speeding tickets, no at-fault accidents, $1,000 deductibles, and Michigan minimum liability limits. Discounts applied include claim-free, and safe-driver. Premium costs do not factor in specific Detroit, MI garaging location which can impact prices noticeably.
Based upon these rates, we can expect vehicles like the Hyundai Elantra, Honda Accord, and Honda CR-V should be a few of the cheaper vehicles to insure for teen drivers. The price for an auto insurance policy will trend higher just because there is more inherent risk for teenagers, but generally speaking those vehicles will probably have the best insurance prices possible.
Get discounts on Detroit auto insurance
Insurers that offer quotes for teenagers may also give you price discounts that could reduce prices by 35% or more if you are eligible for them. Large car insurance companies and some of their more popular discounts are outlined below.
- State Farm has discounts for safe vehicle, student away at school, multiple autos, defensive driving training, passive restraint, and driver’s education.
- Nationwide policyholders can earn discounts including anti-theft, Farm Bureau membership, multi-policy, business or organization, defensive driving, and good student.
- GEICO offers premium reductions for five-year accident-free, multi-policy, anti-theft, federal employee, seat belt use, membership and employees, and multi-vehicle.
- AAA may offer discounts for AAA membership discount, education and occupation, pay-in-full, anti-theft, and multi-car.
- 21st Century discounts include theft prevention, driver training, automatic seat belts, homeowners, defensive driver, anti-lock brakes, and teen driver.
- The Hartford may have discounts that include driver training, bundle, air bag, anti-theft, good student, and vehicle fuel type.
The diagram below compares insurance costs with and without some available policy discounts. The data is based on a female driver, no claims or driving violations, Michigan state minimum liability limits, full physical damage coverage, and $100 deductibles.
The first bar for each age group shows the average rate with no discounts. The second bar shows the rates with passive restraint, anti-theft, paid-in-full, paperless filing, continuous coverage, and vehicle safety discounts applied. When drivers take advantage of discounts, theaverage amount saved on car insurance for teenagers is 28% or $1,328.
Bad driving habits will cost you more
The easiest way to find affordable car insurance rates in Michigan for teen drivers is to be a careful driver and not have accidents or get tickets. The example below highlights how traffic violations and fender-benders can drive up yearly insurance costs for different ages of insureds. The data assumes a single male driver, full coverage, $250 deductibles, and no discounts are applied to the premium.
In the example above, the average cost of an auto insurance policy in Michigan per year with no accidents or violations is $3,603. Get one speeding ticket and the average cost surges to $4,061, an increase of $458 each year. Then include two accidents along with the one speeding ticket and the annual cost of car insurance for teenagers increases to an average of $8,023. That’s an increase of $4,420, or $368 per month, just for not keeping your driving record clean!
Difference between full coverage and liability only rates
Saving on car insurance is probably important to most people, and one easy way to save on the cost of insurance for teenagers is to buy only liability coverage. The chart below shows the comparison of car insurance costs with full physical damage coverage compared to only buying liability only. The rates are based on a clean driving record, no claims, $100 deductibles, single marital status, and no other discounts are factored in.
On average, physical damage coverage on your policy costs $3,933 per year over having just liability coverage. Many people question if it’s a good idea to buy full coverage. There isn’t a written rule to delete full coverage on your policy, but there is a general school of thought. If the yearly cost of comp and collision coverage is more than about 10% of replacement cost minus your deductible, then it may be the right time to buy liability only.
For example, let’s assume your vehicle’s replacement cost is $5,500 and you have $1,000 deductibles. If your vehicle is destroyed, the most your company would pay you is $4,500 after you pay the deductible. If you are paying more than $450 a year for comprehensive and collision coverage, then it might be time to consider dropping full coverage.
If you have questions and prefer to get some professional advice when shopping around for cheaper insurance for teenagers, the insurance agencies listed below can help you determine which auto insurance policy fits you best.
To find a Detroit insurance agency closest to you, click the button at the bottom or click here to compare prices now.
L.A. Insurance Agency 150
14701 Mack Ave – Detroit, MI 48215 – (313) 884-8888
Detroit Auto Insurance
620 Woodward Ave – Detroit, MI 48226 – (517) 618-1693
Diebold Detroit Insurance Agency
1420 Broadway St #101 – Detroit, MI 48226 – (313) 964-3750
Midwest Underwriters Insurance
19640 Harper Ave – Grosse Pointe Woods, MI 48236 – (313) 884-8600
Kim-One Insurance Agency
11000 W McNichols Rd – Detroit, MI 48221 – (313) 397-4198