The day has finally come to hand your teenager the keys to the car. Your new driver is ecstatic, but you’re slammed with sticker shock, courtesy of your insurer.

Data from CarInsurance.com shows that adding a 16-year-old girl to your policy will increase your premium, on average, by 125 percent. And adding a boy will boost your rates by 160 percent.

So what can you do? Actually, more than you might think. With a few secrets and a little legwork, you can seize some major discounts. Here’s how to save money on car insurance for your teen.

OPT FOR THE FAMILY PLAN

Yes, adding your teen to your auto policy sends your rate through the roof. But what about getting your kid a policy of his own?

Turns out, it’s even worse. The average rate for a 16-year-old on a one-person policy is nearly $4,000 a year. And even then, your child will likely need a parent to co-sign on the policy, implicating you financially.

In nearly every case, the cheaper option is including your teen in your family’s coverage. Whether you pay the added cost or ask your teen to foot the bill, you’ll wind up paying less out of pocket for protection.

CHECK YOUR DRIVER ASSIGNMENT

By default, some insurers assign the highest-risk driver — usually your teen — to the most valuable car on your policy. Since premiums tend to be higher on cars with greater resale cost, the combination means supersized premiums.

Review your policy documents or check with your agent about your driver assignment. You’ll want to ensure your teen is assigned as the primary driver for the car he's actually using. And, opting for a reliable car with all the safety features over, say, the sports car he’s been eyeing can also translate to a discount. If he’s only occasionally driving a car you primarily use, ask whether he can be referenced as a secondary driver instead.

BRAG ABOUT YOUR TEEN’S GOOD GRADES

Surprisingly, good grades do predict good driving habits. So drivers under 25 can capitalize, with most carriers, on a good student discount. Discounts range from 10 percent all the way to 25 percent.

Check with your insurer to learn how your teen can qualify. Common criteria include a B average in school, placement on the honor roll or scores in the top 20 percent on common standardized tests.

ADVERTISE YOUR DISTANT LEARNER

If your young driver is headed off to school — and isn’t taking the car — you may qualify for a student away discount. He’ll still be covered when he’s home to use the car, but you’ll enjoy a discount of 10 percent to 30 percent off your coverage.

Talk with your insurer about how to nab your discount. Some carriers require your child to attend school at least 100 miles from home in order to qualify.

SEND YOUR KID TO CLASS

Enrolling your teen in a driver education class is a great way to boost his driving skills and benefit from a sweet insurance discount. A program that meets with your carrier’s approval will generally save you around 10 percent on your premiums.

Review approved courses before you sign up. Your teen may be able to take an online seminar, attend classroom training or log some hours on the road with a certified instructor.

Don’t assume the insurer you have now will still give you the best rate when you add a young driver.

REDUCE YOUR PREMIUMS EVEN FURTHER

When adding a teen driver to your policy, you’ll want to explore every avenue for savings. So try these techniques for minimizing costs. (Bonus: They work even if you don’t have a young driver on your policy.)

  • Amp up your deductibles. Higher deductibles translate to lower insurance premiums. One study from CarInsurance.com found that boosting your auto deductible from $250 to $500 can save you 12 percent on premium costs, while increasing to $1,000 can save you 23 percent.
  • Drop unnecessary coverages. As your car diminishes in value over time, your collision and comprehensive coverages may eventually cost more than they’re worth. Use the 10 percent rule as a guideline for determining if it makes financial sense to drop those coverages and put the savings into a new-car fund instead.
  • Stick with a single insurer. Your auto insurer craves your business. And it’s willing to bribe you to carry homeowners or renter’s insurance with them. Expect a multi-policy discount to give you a 10-percent to 25-percent savings.
  • Shop around. Don’t assume the insurer you have now will still give you the best rate when you add a young driver. Get a handful of quotes, and see whether switching carriers is the right way to go.
  • Get a “good driver” discount. While your teen won’t be eligible for this for several years, if you have been accident- and traffic violation-free for five years, you could save as much as 25 percent on your premiums.
  • Pay upfront for coverage. Sure, you can pay your premiums in installments. But covering the bill for the entire policy period typically qualifies you for a paid-in-full discount that can go as high as 10 percent.
  • Improve your credit history. Depending on your state and how long you’ve been a customer, your insurance premiums can be dramatically affected by your credit history. Check with your insurer to see what impact you’ll see from improving your credit score. Then, put a plan in motion to make it happen.

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