Attending college might be expensive on its own. Unfortunately, college students are also likely to face high costs for their car insurance policies. Some of the main factors car insurance companies use to determine rates often work against younger college students, potentially leading to higher rates.
Let’s answer some of the questions you probably have about car insurance for college students. We’ll then explore the methods you could use to make auto coverage for a student more affordable.
Why does car insurance cost college students more?
Car insurance companies determine the premiums for each policy using a long list of factors. Sadly, these factors that determine the premium might not favor college students. Instead, college students often face a high car insurance bill that may strain their finances.
Here are some of the main factors insurance companies use that could affect college students and their car insurance rates.
Students generally attend college immediately after high school. This puts most college students in their teenage years or early 20s. Unfortunately, data shows that younger individuals tend to have more accidents than older, more experienced drivers. This usually results in higher rates for younger drivers.
Driving history and experience
Insurers also look at your specific driving record and driving experience. Drivers with no traffic violations or auto accidents on record will likely have better premiums than those with these blemishes on their driving history. Additionally, receiving some forms of driver training might further lower your rates.
Still, insurers look at overall safe driving trends. If you received a driver's license when you were first eligible, you likely have more driving experience than someone who received their license when they turned 18. Still, college students have relatively little driving experience, often resulting in higher rates.
In areas where the law allows, many insurance providers use your credit history as a factor in your auto insurance rates. They may use data on your credit report to build an insurance credit score to determine your risk of filing a claim. Unfortunately, most college students don’t have an extensive credit history, which could increase their car insurance premiums.
The permanent address you keep your car at and where you drive could impact your rates. Some areas have higher crime rates and may have more car break-ins. This may result in more claims and, therefore, may increase your own car insurance.
College campuses tend to have more inexperienced drivers in one location. This may also result in more claims in the area due to accidents, increasing your insurance rates.
How and when you use your car could impact your premiums. Students who rarely drive a vehicle and mostly keep it at home, away from their school, may receive a discount. Others that drive often and keep their car at school may have to pay more.
If your insurance company uses a driving tracking tool via a mobile app, this could help or hurt your rates. If you only drive during daylight hours, practice good driving habits, and keep mileage to a minimum, rates may improve.
However, a student who works as a server and often drives in the early morning hours after closing a restaurant may pay higher rates. Insurance companies view these hours as riskier times.
Your gender may also play a factor in your rates. Data shows that males are riskier drivers and file more claims than female drivers. This leads to male drivers having higher premiums overall.
How can a college student save on car insurance?
A college student may be able to get cheap car insurance by taking advantage of the car insurance discounts they qualify for. Thankfully, auto insurers often offer a handful of discounts that could make a big difference in the average cost of car insurance.
Here are a few to ask about when you’re getting a car insurance quote or when you’re reviewing your policy for ways to lower your rates.
Good student discount
You may qualify for a good student discount depending on your grades and your insurance company. Check with your insurance agent to see whether good grades could get you a potential school discount.
For instance, GEICO offers good grades discounts for students with B-average grades. Allstate, Progressive, and State Farm also offer discounts for certain grade point averages. You likely must be under a certain age and be a full-time student to qualify for these discounts.
Good driver discount
Good drivers are often rewarded with lower rates, regardless of whether they’re in college. By avoiding traffic violations and accidents, you show insurance companies you are a lower risk to them.
Insurance companies often give you a good driver discount to reward you for lowering your risk. The exact details of qualifying for this discount may vary by insurer. GEICO’s discount kicks in after driving for five years with no accidents.
Away from home discount
Students who attend school more than 100 miles away from home and do not have a car with them may qualify for a discount designed for a student away from home. The reason behind this discount is that you’re less likely to return home and drive a family vehicle, which decreases the risk of a claim.
Multiple policy discount
Insurers offer discounts if you have more than one type of insurance policy with them. As a college student, you might not be able to bundle car and homeowners insurance. But you could use renters insurance if you don’t live at home. Combining your auto insurance policy with a renters insurance could help you unlock this lucrative multiple policy discount.
Occasional driver discount
Some insurance companies may offer a discount if you only occasionally drive the vehicles on the policy. Asking about this discount makes sense if you’re still on your parents' policy, but not if you’re the sole driver on your own policy.
If you drive less than 25% of a car’s mileage on a family insurance policy, inquire with your insurance company to see whether it offers this discount.
Organization affiliation discount
Auto insurers team up with organizations to provide discounts to their members. As a college student, you may qualify for this discount through a fraternity, sorority, or honor society membership. If you aren’t a member of one of these organizations, ask your insurer for a list of affiliation discounts to see whether you qualify under any other organizations they work with.
Can parents help a college student save on car insurance?
Parents could help college students save money on car insurance. Parents could help their teen drivers learn how to look for the best coverage by shopping around for multiple quotes and comparing policies. This may be overwhelming for a first-time student driver and your experience might make finding the cheapest car insurance seem less daunting.
Parents could also compare the price of keeping a college student on the parents’ car insurance policy versus getting their own insurance. If it’s cheaper to keep them on the parent's policy, the student could pay the difference between what it would cost with and without them on the policy.
Parents may be able to qualify for further discounts if they keep a college student on their policy. Ask your insurer whether they offer discounts for students going to school more than 100 miles away from home. Another discount to check for is the occasional driver discount if they rarely drive the cars on the policy.
Do college students pay less insurance for older cars?
College students may be able to save money on car insurance by driving older cars, especially if they’re paid off in full. Older cars typically aren’t worth as much money as newer cars. If you get in an accident, the lower car value may result in a smaller payout by an insurance company. This could mean lower rates.
If you own a car outright, including an older car, you have another option to save money on your car insurance. Car lenders generally require you to have collision and comprehensive coverage to cover the cost of damage to a vehicle that has a lien on it. That’s how the lenders make sure they’re paid or the collateral for their loan is paid.
Without the car loan, you no longer have to carry expensive collision and comprehensive coverage. In fact, Consumer Reports recommends that you drop collision and comprehensive coverage when the annual premium equals or exceeds 10 percent of your car’s cash value.
However, you may want to keep this insurance coverage if you’d need help fixing or replacing the car should something happen to it. You’re just not obligated to have it if your car is fully paid off.
Why do car insurance companies ask about education?
Some car insurance companies may use education as one of the factors in their formula to determine auto insurance premiums. People with more education might present a lower risk to auto insurance companies.
How to find the best car insurance for college students?
Finding the best car insurance for college students requires getting multiple car insurance quotes and shopping around. This process allows you to search for the best coverage at the most affordable price.
You could get car insurance quotes individually at each company. Alternatively, you could learn about the best car insurance companies to make a list of the ones you’d like to receive an insurance rate from.
Why is car insurance so expensive for college students?
The reason car insurance could be expensive for college students depends on the factors insurance companies use to determine rates. These companies are trying to determine the risk and potential costs of a claim you may file and set their premiums accordingly.
Young drivers, including traditional-age college students, might not have as much driving experience. This might be linked to a higher frequency of claims, so the rates for students are usually higher.
Sadly, higher insurance rates for college students are a fact of life due to the many factors working against them. However, you could earn several types of insurance discounts to save money. Additionally, you could reduce your insurance cost if you don’t need full coverage.
You might save money on car insurance by shopping around and getting multiple quotes. If you found a better deal with a different company, make sure you know how to switch car insurance. You could also learn more ways to lower your car insurance, including defensive driver education, showing that you’re a safe driver, and more.