Auto warranty options serve as an ideal accompaniment to a newly purchased vehicle for teenagers, many of whom are usually low on dough, still being in school. Due to the recession, though, new-car purchases among young people have diminished for several years now.
However, teens are finally getting back in the drivers' seat, thanks to improved job growth and the U.S. economy being back on the mend.
For the first time in almost 10 years, teenagers are returning to the roadways in increasing numbers, according to a newly released study from the Highway Loss Data Institute. In 2006, a couple of years prior to the Great Recession, the rate of teen drivers across the nation slipped. The diminishing trend was largely in line with growing unemployment, said Matt Moore, HLDI vice president.
"Nearly 1 in 3 accidents involve a teenage driver."
Researchers came to this finding after analyzing the number of rated drivers who were on the road between 2006 and 2014. For purposes of the study, a "rated driver" is auto insurance terminology that refers to the person on a policy who is most likely to be involved in an accident. According to several studies, motorists between 16 and 19 years tend to be in more accidents than their older peers. Nearly 1 in 3 accidents involve a teenage driver. This is mainly due to inexperience.
Over a six-year period, the number of rated drivers dropped consistently, HLDI reported. The number fell among other age groups, but not by as much. However, since 2013, there's been a shift. The study found that while the number of prime-age drivers continued to fall, the number of teens did the opposite.
Teenagers need to drive to get to work
Moore said that the return of teenagers to the roads and the steady improvement in the country's employment situation is not a coincidence.
"It seems like many teens really do want to drive after all, and much of the earlier decline in driving was due to the disproportionate effect of the economy on teen employment," Moore explained. "When teenagers have jobs, they have more of a need to drive, along with money to help pay for it."
Unemployment rate cut in half
"The jobless rate reached 10 percent in October 2009."
When the recession was at its worst in October 2009, the unemployment rate was north of 10 percent, according to data compiled by the U.S. Department of Labor. Since 2008, however, the unemployment rate has been halved to just under 5 percent. In February, the economy added 242,000 jobs. The growth in employment wasn't enough to influence the jobless rate, which remained at 4.9 percent.
Sales are strong among new and used vehicles. In addition to automakers and third-parties providing extended auto warranty quotes to buyers, more people are financing. Low interest rates helped fuel an increase in car sales last year.