When Junior is finally old enough to get his license it is an exciting time for him. He fills his head with endless possibilities that come with being able to get from point A to point B without relying on another person to deliver him. This excitement is not always shared by his parents, who often have to bear the financial brunt of this new-found independence. The question often becomes “what is the cheapest way to allow Junior to drive?”
While no option will be “cheap,” there are ways to reduce the costs to some degree. For those who have more than one vehicle and/or have a home, the best option may be to put Junior’s car in your name and add it to your policy, making him the primary driver of that vehicle. By doing this Junior’s car gets all of the benefits of the credits you receive. If your home and auto insurance are with the same carrier and you are receiving an account credit, then his car does as well. He will also benefit from the multi-car discount as well as any other policy-level discounts you currently enjoy.
However, there is a potential downside to this option. By having Junior’s car in your name, you are the legal owner and can inadvertently open yourself up to liability issues resulting from his actions with the car. An attorney can better explain these potential pitfalls, but there is the chance that you may be responsible for what Junior does behind the wheel. Another financial pitfall is that you may find that the costs associated with adding him to the policy may not affect his car, but yours instead. Most carriers apply the highest rated driver (in this case Junior) with the highest rated vehicle on the policy. So if you own a 2014 Nissan Maxima and you got Junior a 2000 Ford Focus, you may find that his vehicle is cheap to insure while your vehicle just increased by a couple thousand dollars.
If you would like to avoid the potential for being legally liable for Junior’s vehicular misconduct and do not want to see your vehicle’s premium increase as a result of his driving experience, then it may be best to put Junior’s vehicle in his name instead of yours. While this option may provide a small layer of insulation from a lawsuit, this option can be more expensive than the previous one. The reason is that, in many cases, the account credit and multi car discount cannot be applied to his policy as he does not own a home or more than one vehicle. Despite the added cost, this option makes it easier to divide the insurance cost or to have him pay the bill entirely without his driving experience and driving record being applied to another car on the policy that may be more expensive to insure.
The bottom line is that whatever you do, the increase in insurance cost is significant. How you handle adding him and his vehicle will depend upon your situation. Be sure to contact your agent to discuss these options so that you can be sure to make a choice that fits your needs and your budget.