Your age is just one factor in the cost of your car insurance — but it can be a damning one.
That’s because insurance companies are looking at data like this: Drivers between 15 and 20 years old comprise 6.7 percent of the driving population, but they’re involved in 20 percent of all crashes, according to Safe Roads Alliance.
Statistically, younger drivers are riskier drivers to insure. Although finding affordable car insurance for college students is a challenge, it’s possible.
4 ways to find discounts on car insurance for college students
Auto insurance companies are wary of customers with less driving experience. But that doesn’t mean you have to pay more.
Assuming you already have a car — hopefully one that’s less likely to have higher premiums — here’s how to pay less to insure it.
1. Score a discount for being a good student
Believing that high-performing students make for safer drivers, many insurance companies like Allstate and Geico offer discounts for students with good grades.
It’s wise to compare company discounts when determining your overall cost for insurance. State Farm, for example, quotes a 25 percent discount for good students. But a similar break at another company might be more worthwhile if its rates are much lower.
To qualify for these discounts, you typically need to:
- Be 25 or younger
- Be enrolled full-time at a high school, college, or university
- Maintain a 3.0-grade point average, or be on the honor roll or dean’s list
- Prove your scores via a report card or letter from a school administrator
- Show other accepted proof of good performance (if home-schooled)
If you might qualify for this sort of discount, ask your current (or prospective) insurer about its offering. While you’re at it, ask about other discounts that apply to all drivers. For example, you might qualify for a discount for taking driver education courses.
2. Drive less and consider pay-as-you-go coverage
The best car insurance for college students is really just the best car insurance for you. It depends on how often you drive.
Limiting how much you drive is the solution that’s easier said than done. It’s not always possible to design your campus life around walking, biking, and public transportation.
If it’s possible to avoid getting behind the wheel often, you might consider usage-based insurance (UBI). UBI uses your driving data (primarily, miles driven) instead of your personal information (such as a credit score) to price your insurance. The less you drive and the safer you drive, the lower your premium.
State Farm, Progressive, and Metromile are among insurance companies with usage-based plans. Consider the pros and cons of pay-as-you-go options before committing to one.
3. Choose the right amount of insurance
If driving more often is a necessity, your first step should be to ensure you meet your state’s minimum coverage requirement. While shopping rates, find insurers in the state of your university by checking the National Association of Insurance Commissioners’ map.
Next, confirm that company policies meet the minimum requirements outlined in your state’s laws. In Texas, for example, drivers must have a liability policy with at least $115,000 in coverage. In Nevada, the number is $55,000.
Once you’ve met the minimum, ask yourself if you need more. If you drive a valuable car, for example, you might elect to add on collision insurance to cover potentially costly repairs. If you park on a campus known for theft or vandalism, you might consider opting for comprehensive insurance, which also protects you in the event of extreme weather.
If you’re an extremely safe driver, you can increase your deductible, which is the amount of money you’ll pay out of pocket before your coverage kicks in. Increasing your deductible can lower your insurance premiums.
Whether you’re going off to college for the first time or are in the midst of grad school, remember that you can save by reducing the coverage on your student car insurance plan. Just be aware of the risks involved.
4. Stay on your family’s plan
About 52 percent of college students leave their car at home when they go off to school, according to a 2016 U.S. News & World Report survey. Even if you’re in this group, you might consider being added to (or staying on) your mom and dad’s auto insurance plan.
Just as keeping your family smartphone plan intact saves everyone money, so does keeping your name on a multicar auto insurance plan. In fact, if you don’t have your car at school, your parents could drop you down to an “occasional” driver on the policy, decreasing the premium while keeping you protected.
The average teen could save as much as $5,096 by snuggling up to mom and dad. Although, the parent’s premium would increase by $2,593, according to consumer research firm ValuePenguin*.
Some insurers might refer to this as a “resident student discount” or “student away at school discount.” This, specifically, is a cost-saver for students attending school full-time more than 100 miles from home.
To stay on your parents’ plan, all that might be required is that your family’s home is still your permanent address.
Whether you take your car with you to school, there are ups and downs to consider. The plus for you, as a younger, less-experienced driver, is that you can ride the coattails of your parents for a lower premium. The downside for your parents would be that they’d be on the hook for rising premiums if you were to get into an accident.
It’s important to have this discussion with your parents to see what works best for all parties involved.
Shop around before choosing student car insurance coverage
Finding affordable car insurance for college students is like seeking student loans. You can save by chasing discounts, taking out only as much as you need, and receiving help from mom and dad.
There’s one more similarity: shopping rates. Compare premium quotes from companies the way you would compare APR quotes from lenders.
Once you find the right coverage at the right cost, you can focus on reducing other school expenses, like tuition, books, and, yes, even your student loans.
*ValuePenguin is an affiliate of LendingTree, Student Loan Hero’s parent company.
Interested in a personal loan?Here are the top personal loan lenders of 2019!
|Lender||APR Range||Loan Amount|
|1 Includes AutoPay discount. Important Disclosures for SoFi.
2 Includes AutoPay discount. Important Disclosures for Payoff.
3 Important Disclosures for FreedomPlus.
4 Important Disclosures for Citizens Bank.
Citizens Bank Disclosures
5 Important Disclosures for LendingPoint.
6 Important Disclosures for LendingClub.
All loans made by WebBank, Member FDIC. Your actual rate depends upon credit score, loan amount, loan term, and credit usage & history. The APR ranges from 6.95% to 35.89%*. The origination fee ranges from 1% to 6% of the original principal balance and is deducted from your loan proceeds. For example, you could receive a loan of $6,000 with an interest rate of 7.99% and a 5.00% origination fee of $300 for an APR of 11.51%. In this example, you will receive $5,700 and will make 36 monthly payments of $187.99. The total amount repayable will be $6,767.64. Your APR will be determined based on your credit at the time of application. The average origination fee is 5.49% as of Q1 2017. In Georgia, the minimum loan amount is $3,025. In Massachusetts, the minimum loan amount is $6,025 if your APR is greater than 12%. There is no down payment and there is never a prepayment penalty. Closing of your loan is contingent upon your agreement of all the required agreements and disclosures on the www.lendingclub.com website. All loans via LendingClub have a minimum repayment term of 36 months. Borrower must be a U.S. citizen, permanent resident or be in the United States on a valid long term visa and at least 18 years old. Valid bank account and Social Security number are required. Equal Housing Lender. All loans are subject to credit approval. LendingClub’s physical address is: LendingClub, 71 Stevenson Street, Suite 1000, San Francisco, CA 94105.
†Per reviews collected and authenticated by Bazaarvoice in compliance with the Bazaarvoice Authentication Requirements, supported by anti-fraud technology and human analysis. All reviews can be reviewed at reviews.lendingclub.com
**Based on approximately 60% of borrowers who received offers through LendingClub’s marketing partners between January 1, 2018 to July 20,2018. The time it will take to fund your loan may vary.
7 Important Disclosures for Earnest.
8 Important Disclosures for Avant.
*If approved, the actual loan terms that a customer qualifies for may vary based on credit determination, state law, and other factors. Minimum loan amounts vary by state. Funds are generally deposited via ACH for delivery next business day if approved by 4:30pm CT Monday-Friday. Avant branded credit products are issued by WebBank, member FDIC.
** Example: A $5,700 loan with an administration fee of 4.75% and an amount financed of $5,429.25, repayable in 36 monthly installments, would have an APR of 29.95% and monthly payments of $230.33
* Important Disclosures for Upgrade Bank.
Upgrade Bank Disclosures
** Accept your loan offer and your funds will be sent to your bank via ACH within one (1) business day of clearing necessary verifications. Availability of the funds is dependent on how quickly your bank processes this transaction. From the time of approval, funds should be available within four (4) business days.
|5.47% – 17.67%1||$5,000 - $100,000|
|5.59% – 35.99%||$1,000 - $50,000|
|7.99% – 35.89%*||$1,000 - $50,000|
|5.99% – 24.99%2||$5,000 - $35,000|
|5.99% – 29.99%3||$7,500 - $40,000|
|6.79% – 20.89%4||$5,000 - $50,000|
|9.99% – 35.99%5||$2,000 - $25,000|
|6.95% – 35.89%6||$1,000 - $40,000|
|5.99% – 17.24%7||$5,000 - $75,000|
|9.95% – 35.99%8||$2,000 - $35,000|
Need a student loan?Here are our top student loan lenders of 2019!
|* The Sallie Mae partner referenced is not the creditor for these loans and is compensated by Sallie Mae for the referral of Smart Option Student Loan customers.
1 = Sallie Mae Disclaimer: Click here for important information. Terms, conditions and limitations apply.
2 Important Disclosures for College Ave.
College Ave Student Loans products are made available through either Firstrust Bank, member FDIC or M.Y. Safra Bank, FSB, member FDIC. All loans are subject to individual approval and adherence to underwriting guidelines. Program restrictions, other terms, and conditions apply.
(1)All rates shown include the auto-pay discount. The 0.25% auto-pay interest rate reduction applies as long as a valid bank account is designated for required monthly payments. Variable rates may increase after consummation.
(2)This informational repayment example uses typical loan terms for a freshman borrower who selects the Deferred Repayment Option with a 10-year repayment term, has a $10,000 loan that is disbursed in one disbursement and a 8.35% fixed Annual Percentage Rate (“APR”): 120 monthly payments of $179.18 while in the repayment period, for a total amount of payments of $21,501.54. Loans will never have a full principal and interest monthly payment of less than $50. Your actual rates and repayment terms may vary.
(3)As certified by your school and less any other financial aid you might receive. Minimum $1,000.
Information advertised valid as of 9/3/2019. Variable interest rates may increase after consummation.
3 Important Disclosures for Discover.
Discover's lowest rates shown are for the undergraduate loan and include an interest-only repayment discount and a 0.25% interest rate reduction while enrolled in automatic payments.
4 Important Disclosures for CommonBond.
Offered terms are subject to change and state law restrictions. Loans are offered through CommonBond Lending, LLC (NMLS #1175900).
5 Important Disclosures for Citizens.
|3.25% – 10.65%*,1||Undergraduate and Graduate|
|3.70% – 11.98%2||Undergraduate, Graduate, and Parents|
|3.37% – 11.87%3||Undergraduate and Graduate|
|3.52% – 9.50%4||Undergraduate and Graduate|
|3.24% – 11.50%5||Undergraduate and Graduate|