Tips on How to Get Cheap Car Insurance for College Students

Does the term “broke college student” hit home? It’s not uncommon with the high cost of tuition, plus room and board, for college students to struggle financially. On top of those costs, college students have to worry about car insurance, which according to AutoInsurance.com can cost between $1,114 - $2,233 a year.

Fortunately, there are ways to lower car insurance rates, even for college students.

4 ways college students can save on car insurance

Before shopping for any discounts an insurance company may offer, consider these tips to lower car insurance for college students.

Keep your student on your insurance

If your child drives a vehicle you own (your name is on the title), you can add them to your car insurance policy. Adding a young driver to your policy is usually much cheaper than having them purchase a policy on their own.

Car insurance companies base their premiums on the risk a driver poses. Since younger drivers are higher risk because they don’t have experience, insurance companies generally charge them higher rates. If the adult drivers in the house have a good driving record, your college student can benefit with lower premiums if you add them to your policy.

Lower coverage on older cars

If your college student drives an older car, they can save money on car insurance in several ways.

• 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, which may mean lower rates.
• If your student doesn’t have a loan on the vehicle, they aren’t required to carry collision and comprehensive insurance on it. Consumer Reports recommends dropping collision and comprehensive coverage when the annual premium equals or exceeds 10 percent of your car’s cash value.

Take a higher deductible

The car insurance deductible is the amount you’re responsible for paying before your insurance company will pay anything on a claim. If you take a higher deductible, aka take more financial responsibility, the insurance company will charge lower premiums.

I don’t recommend taking a deductible you can’t afford, but if you have enough money in savings to afford a slightly higher deductible, it can lower the monthly premium cost. This can be a good idea if your college student didn’t take a car to college, or doesn’t drive much while at college.

Take driver’s education courses

In addition to the basic driver’s education course your student took to get his/her license, many insurance companies offer more educational opportunities in exchange for lower premiums. For example, State Farm offers a program called Steer Clear® to help young drivers improve their driving skills, and Geico offers a defensive driving course for further discounts.

Discounts for car insurance for college students

After ensuring you’ve done everything to lower your child’s car insurance premiums, here are some discounts that may apply.

Qualify for the good student discount

Each insurance company has a different definition of a “good student.” Ask your insurance company what they require to get the good student discount to determine if your college student qualifies.

For example, GEICO offers a good student discount for a B-average, while State Farm, Allstate, and Progressive base the discount on a minimum GPA that they don’t disclose. The student must be under 25 to qualify.

Qualify for the good driver discount

Insurance companies often reward good drivers with lower rates, regardless of whether they’re in college. By avoiding traffic violations and accidents, you show insurance companies you pose a low risk of accidents or moving violations.

The exact eligibility details for the good driver discount vary by insurer. For example, GEICO’s discount kicks in after driving for five years with no accidents, and State Farm requires only a 3-year period without accidents.

Apply for the student away 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. Insurance companies offer this discount because you won’t be driving as much, so there’s a lower risk of you filing a claim.

Take advantage of the multiple policy discount

Insurers offer discounts if you have more than one type of insurance policy with them. College students on their parents’ policy may take advantage of the home and car insurance bundle discount. Even though most college students don’t own a home, if they are on their own policies, they may be eligible to bundle car and renters insurance.

Ask about any organization affiliation discounts

Auto insurers team up with organizations to provide discounts to their members. College students may qualify for this discount through a fraternity, sorority, or honor society membership. If your student isn’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.

Why car insurance is more expensive for college students

If you’re like me, you probably wonder why insurance companies would put more financial stress on college students when getting a college education is expensive enough.

Unfortunately, it comes down to the risk factors college students pose, most of which they cannot help. This is why finding as many discounts and ways to lower insurance premiums as possible is important.

Here are some of the main factors insurance companies use that could affect college students' car insurance rates.

Age

College students may feel all grown up, but according to insurance companies, they are still young and at risk. It is this way until drivers hit the age of 25, which is when most insurance companies drop their premiums. For example, Progressive drops insurance rates an average of 9 percent when a driver turns 25 years old.

Driving history and experience

Young drivers don’t have much of a driving history, so insurance companies can’t determine if they are a high or low risk to them. By the time most students hit college age, they have at least a few years of driving experience and may qualify for a good driver discount. However, if within those few years they’ve driven, they had moving violations or caused an accident, it can cause the premiums to stay high.

Credit

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.

Location

The permanent address where your student keeps their car and where they drive could impact their rates. Some areas have higher crime rates and may have more car break-ins which may result in more claims and, therefore, may increase the premiums.

In addition, college campuses tend to have more inexperienced drivers in one location which may result in more claims, increasing your insurance rates.

Car usage

How and when a student uses his car could impact the premiums. For example, students who rarely drive a vehicle and mostly keep it home away from school may receive a discount. Others who 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, it may help your college student’s rates if he only drives during daylight hours, practices good driving habits, and keeps mileage to a minimum.

On the other hand, a student who works as a server and often drives in the early morning hours or after a restaurant closes may pay higher rates because insurance companies view these hours as riskier.

Gender

Your child’s gender may also affect your rates. Data shows that males are riskier drivers and file more claims than female drivers, leading to higher premiums overall. In some states, like California, gender may not be included in rate calculations.

FAQs

Bottom line

Unfortunately, higher insurance rates for college students are a fact of life due to the many factors working against them. However, there are several things you can do to lower the premiums, as well as apply for applicable discounts.

It’s also a good idea to shop around and get multiple quotes. Your student can always switch car insurance, or take advantage of other ways to lower car insurance premiums.