Some American teens are having to delay getting their driver’s licenses as the result of an uneven economic recovery and rising prices, a new Nationwide Mutual Insurance Company survey shows. The poll, conducted online by Harris Interactive on behalf of Nationwide, surveyed 1,483 parents of driving age teens (15-19 year olds) between December 10, 2010 and January 5, 2011.
With high unemployment, concerns over rising gas prices and inflation, plus the cost of auto insurance for young drivers, the expense of getting a teen behind the wheel is greater than ever.
“Our survey found that households with teen drivers shell out an average of nearly $3,100 each year to allow their teens to drive,” said Larry Thursby, Vice President of Auto Product & Pricing at Nationwide Insurance. “After analyzing Nationwide’s four million auto policies, we found nearly a half percentage decrease in policies with teen drivers, from 5.8 in 2008 to 5.4 in 2011. While other factors are involved, the cost of having a teen driver is a major one.”
Parents of driving age teens worried of costs
Today, in this time of economic uncertainty, parents of teens are primarily concerned about the costs associated with their teen driving (second only to distracted driving). On average, parents of teens pay or will pay nearly two-thirds or more of all costs associated with their child driving, ranging from their teen’s car insurance to gasoline. Further, 41 percent of parents will pay for all of the costs associated with their child driving, while 32 percent will share these costs with their teen. Only one in six parents of teens say that their teen will pay for all of the driving expenses.
Of all the parental concerns associated with the costs of teen driving, auto insurance tops the list with 66 percent of parents noting this as a top concern. Also, 55 percent of parents noted increasing insurance costs if their teen gets into an accident as a top concern. The price of gasoline was third in line with 54 percent. Insurance concerns are notable as 70 percent of parents of teen drivers insure their child on their auto insurance policy, experiencing a yearly average increase of approximately $800.
“Today, households with teen drivers are paying a substantial amount of money each year to allow their teens to drive,” said Thursby. “And, as such a large number of parents taking the financial hit for their teens driving, many families of teens are realizing that, as a result of the economic downturn, adjustments and sacrifices are necessary to help allow their teens to drive.”
Nationwide Insurance also found that 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), eating out (38 percent) or vacation expenses (35 percent).
The survey also found that one-third of parents of teen drivers say that their child has been forced to get a job to pay for driving expenses due to the economic downturn. Around two in 10 parents say that their child will have to use a family car instead of getting their own (21 percent), or they are not purchasing a car for their teen as originally planned (15 percent).