Many or all of the companies featured provide compensation to LendEDU. These commissions are how we maintain our free service for consumers. Compensation, along with hours of in-depth editorial research, determines where & how companies appear on our site.
Car insurance for college students can be an expensive proposition, especially for young drivers. The average college student pays much higher rates than older drivers, as statistics show that younger drivers tend to get into more accidents.
This can make finding high-quality, cheap car insurance for college students a challenge. Read on to learn more about why car insurance for college students can be so costly—and how you can find the cheapest car insurance available.
- Best Car Insurance Companies for Students
- Car Insurance Costs for College Students
- Finding Cheap Car Insurance
Best Car Insurance Companies for Students
If you are on a limited budget as a college student, you will need to prioritize saving money on car insurance. One way to do so is by picking car insurance companies that offer discounts for students.
- State Farm insurance is not generally known for having cheap car insurance—but they do offer a 25 percent discount for college students who get good grades. This is a substantial incentive to help you excel at school and be rewarded with a large rate reduction for doing so. In addition, State Farm offers programs for young drivers to learn about safe driving, with an additional 15 percent discount for completing the course and maintaining a safe driving record.
- Farmers offers students who get good grades a 24 percent discount—a great bonus for doing well in school. In addition, Farmers gives parents of students whose children go to school a certain distance away another discount, called the Distant Student Discount.
- Nationwide also offers a Good Student Discount of between 16 and 24 percent for students with a B average or higher. You just need to provide some proof of your academic accomplishments, which can include SAT or ACT scores.
- Allstate also offers a Good Student Discount of up to nine percent. While this is much smaller than other insurance companies’ discounts, it can be combined with other discounts, such as the Resident Student Discount. This allows parents of students going to school at least 100 miles away to save up to 35 percent on car insurance for their child.
If you need cheap car insurance as a college student, exploring a variety of options will help you get the best deal on what can be an expensive proposition. Understanding what drives the high rates and how you can get a better deal is critical to saving money as you go through this process.
Car Insurance Costs for College Students
For any driver, the cost of car insurance depends on a number of factors, such as the type of car, location, how often the car is driven, and who is driving. For example, a relatively new car with a lot of safety features may be cheaper to insure than an older car without the same safety features.
For college students, these same factors are taken into account when determining a car insurance rate. However, there is one overarching factor that will likely be the biggest influence on the expense of car insurance for college students: age.
On average, younger drivers pay more for car insurance than any other age group. An 18-year-old driver will be quoted $4,055 for the same car insurance that a 23-year-old will get for $1,743 (a 40-year-old may get closer to $1,000). The reason is simple, younger drivers tend to get into more accidents and engage in more risky behavior than older drivers. For that reason, insurance companies charge more.
Breakdown of the Contributing Factors
- Location – The more urban or densely populated your location, the more you will pay for insurance. The reason is that statistically speaking, if there are more cars on the road, there are more likely to be accidents—hence the higher rate.
- Type of car – Sports cars will cost more than bulkier sedans and compact cars, because drivers usually go faster in them and have a higher rate of wrecks.
- Credit history – Insurance companies will examine applicants’ credit history as a predictor of the likelihood of getting into an accident. Because many college students don’t have a credit history—or they don’t have good credit—this may increase the cost of their insurance.
- Amount of driving – If you are a commuter, it will raise your insurance premiums.
- Driving record – Just being young is already a risk factor—if you add a speeding ticket or another infraction, it will increase the costs even more. Keeping your record clean as a college student will help you lower your insurance rates.
Finding Cheap Car Insurance for College Students
If you are in college, there are a number of ways to get a discount on car insurance—starting with your parents. One of the best ways to get a substantial break on your car insurance cost is by staying on your parents’ policy. While this isn’t possible for all students, being on your parents’ policy instead of on a separate policy can save thousands of dollars a year.
As long as other members of your family have clear driving records, being on the family insurance will be cheaper because your parents will likely have a longer credit history and a relationship with the insurance company. This will give them access to better rates. They may also be eligible for multi-car discounts. However, if you get into a car accident, be aware that you could be responsible for raising the rates for your parents—so be sure to be cautious behind the wheel.
Another option to explore is discounts for driving less when you are at school. As mentioned in the previous section, many insurance companies offer special rates for students who are at college more than 100 miles away from home. They can potentially even be removed from the policy entirely, with allowances for driving during winter and spring breaks, giving your family a further premium reduction.
However, if you will be driving a car while at college, then you won’t be able to get this discount.
You could get a discount for getting good grades while at school. A number of insurance companies offer substantial discounts of up to 25 percent for maintaining good grades. They may even offer a percentage off of your insurance for taking safe driving courses.
Finally, be sure to comparison shop with both national and local companies, and explore options for how your rates will change based on how and where you drive and store your car. You may find that there is a substantial difference in the amount charged by different companies, and it is well worth the time to save hundreds or even thousands of dollars each year in premiums.
Author: Jeff Gitlen