Amid high unemployment and rising gas prices, car insurance rates are a top concern for parents of teen drivers, with one in seven parents saying they will delay letting their child drive, according to a new survey by Nationwide Mutual Insurance Co.
Nationwide analyzed its 4 million auto policies and found that policies with teen drivers dropped from 5.8 percent in 2008 to 5.4 percent of the company's car insurance policies in 2011.
"While other factors are involved, the cost of having a teen driver is a major one," Nationwide's Larry Thursby, vice president of auto product and pricing, said in a statement.
Parents worry about financial impact of teens driving
The survey found that households with teen drivers pay an average of $3,100 to allow their teens to drive. Parents of teens pay or will pay an average of almost two-thirds or more of the costs associated with their child driving, including car insurance and gasoline. Further, 41 percent of parents will pay for all of the costs associated with their child driving, while 32 percent will share costs with their teen. Only one in six parents of teens say that their child will pay for all of the driving expenses.
Most parents, 66 percent, say car insurance rates are a top concern, and 55 percent of parents are concerned about the increasing insurance costs if their teen gets into an accident. The price of gasoline was third in line with 54 percent. About 70 percent of parents of teen drivers insure their child on their auto insurance policy, experiencing a yearly average increase of approximately $800, according to Nationwide.
About half of the parents of driving age teens say they have made financial cutbacks to allow a child to drive, including:
- Cutting back on entertainment expenses, 40 percent
- Dining out, 38 percent
- Vacation expenses, 35 percent
The survey also found that one-third of parents of teen drivers say their child has been forced to get a job to pay for driving expenses due to the economic downturn. Twenty-one percent say their child will have to use a family car instead of getting their own, and 15 percent are not purchasing a car for their teen as originally planned.
The poll, conducted online by Harris Interactive for the insurer, surveyed 1,483 parents of 15- to 19-year-olds between Dec. 10, 2010, and Jan. 5, 2011.