The Teen Tax

If you’re considering adding a teen to your auto insurance policy, a recent study from InsuranceQuotes.com uncovered some good news: The average price has dropped. Slightly. The report found that adding one teen driver to your insurance policy will cause your premiums to jump by an average of 78 percent, or $671. While that increase is still quite high, it’s actually lower than in recent years. Rates have been dropping since 2013, when the average increase in rates for adding a teen driver was a stinging 85 percent.

If you’re still struggling with that $671 figure, remember, that’s just the average. Adding a teen boy will typically make your premiums higher than adding a teen girl. And some states have higher premiums than others. Still, there are some ways to keep your premiums down after adding your tiny terror to the policy. Don’t buy a new car for your teen driver — rates are lower for used ones. As The New York Times reports, if you do buy a new vehicle, make sure your kid knows it’s the family’s car, that way it’s easier for you to enforce rules like a curfew and number of passengers in the car. The latter is especially important, as studies have shown that for each teen passenger added to a car, the risk of an accident also increases.

When considering what car to buy, Russ Rader — a spokesman for the Insurance Institute for Highway Safety — told Bankrate.com that you need to keep three words in mind: Big, boring and slow. Slower, bigger vehicles come with lower premiums. Also, take adding your kid to your insurance as an opportunity to talk money. If you’re buying a car, what maintenance will they be covering? What about gas costs? The more sense of responsibility that your teen has for the car, the more likely they are to take driving seriously. And that will inevitably save you plenty.