Car Insurance for Recent Graduates
- Recent college graduates pay an average 6-month car insurance premium of $1,686 — significantly higher than the national average of $1,163
- Travelers offers the cheapest car insurance for college graduates, at just $1,098 for a 6-month policy.
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Best car insurance companies for college graduates
The best car insurance after graduation depends on your next chapter. You may be moving back home and rejoining your parents' policy, settling into an apartment with roommates, or relocating to a state with different insurance requirements.
Because rates for recent grads remain high, finding coverage that fits your situation is key. The ideal insurer offers affordable rates, strong coverage, and valuable discounts. But for many graduates, the best option is simply the cheapest one.
Here are the three companies with the lowest average rates for recent college graduates.
Travelers
- Cheapest company for recent grads
- Average 6-month premium of $1,098
- Often the cheapest provider across all demographics, so rates are likely to stay affordable
USAA
- Second-cheapest insurance provider at $1,188.
- Only available to military members and their families
- Frequently earns the highest customer service reviews from J.D. Power
GEICO
- $1,252 for a 6-month policy
- $434 cheaper than the national average
- Nationwide availability and no membership requirements
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How much is car insurance for recent graduates?
According to The Zebra's insurance rating methodology, recent college graduates pay an average 6-month premium of $1,686. This is much higher than the national average of $1,163 because while there is a slight correlation between educational achievement and lower insurance rates, recent grads tend to be young, and age has a much stronger relationship to insurance premiums.
Currently, Travelers is the cheapest car insurance companies for drivers between the ages of 22 and 25 who have a bachelor's degree. At $1,098 for a 6-month policy, Travelers is $587 cheaper than the average premium for this age group.
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| Company | Avg. 6 Mo. Premium |
|---|---|
| Travelers | $1,098 |
| USAA | $1,188 |
| GEICO | $1,252 |
| Progressive | $1,529 |
| Nationwide | $1,724 |
| Farmers | $1,758 |
| State Farm | $1,926 |
| Allstate | $2,267 |
Source: The Zebra
The Zebra’s Dynamic Insurance Rating Tool data methodology
The Zebra’s Dynamic Insurance Rating Tool for home and auto insurance rates utilizes the latest ZIP code-level rate filings from across the U.S., sourced from Quadrant Information Services and S&P Global. These filings, typically updated annually or biennially by insurers, are verified through Quadrant’s QA process and then integrated into The Zebra’s estimator.
The displayed rates are based on a dynamic home and auto profile designed to reflect the content of the page. This profile is tailored to match specific factors such as age, location, and coverage level, which are adjusted based on the page content to show how these variables can impact premiums.
For a comprehensive understanding, see our detailed methodology.
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Ways for college grads to save on car insurance
Although shopping around and comparing rates from different insurance providers is the best way to find cheap car insurance, there are other solutions worth keeping in mind. Car insurance providers offer a variety of discounts and insurance plan options that can help budget-conscious college grads lower their monthly premiums.
Consider a telematics program
Telematics are in-car devices that monitor the way you drive in order to more accurately determine your premium. With traditional auto insurance, non-driving-related characteristics are used to determine your rates. With telematics, your premium will be determined by driving habits, including:
- Braking
- Acceleration speed
- Time of day driven
- Overall speeds
Telematics discounts from popular carriers
Below are some common discounts you could expect from popular providers in the US.
| Insurer | Estimated Savings |
|---|---|
| Progressive Snapshot | Average of $130 |
| Allstate Drivewise | Average of 10-25% |
| State Farm Drive Safe & Save | Up to 15% |
| Esurance DriveSense | Varies |
| Nationwide SmartRide | Up to 40% |
| Liberty Mutual RightTrack | Average of 5-30% |
| Root Car Insurance | Varies |
| Lemonade | Varies |
| GEICO DriveEasy | Varies |
Bundle your renters or homeowners policies with your auto insurance
Consider bundling your renters insurance or homeowners policy with your auto insurance from the same company. This will simplify the payment process and potentially provide a discount. On average, you can save over $100 every 6 months by bundling your home and auto policies.
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Source: The Zebra
For more information regarding bundling, see our additional content:
Ask about educational discounts
Insurance companies use personal attributes correlated with risky driving tendencies to determine premiums. As it relates to your post-grad life, insurance companies actually see more educated drivers as more responsible. This is why greater educational attainment may lead to lower auto insurance rates.
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| Education | Avg. 6 Mo. Premium |
|---|---|
| None | $1,146 |
| High School | $1,139 |
| Bachelors | $1,127 |
| Masters | $1,126 |
| PHD | $1,126 |
Source: The Zebra
Maintain a good credit score
Your credit score is another non-driving rating factor used by car insurance providers to price your premium. On average, a driver with very poor credit (300-579) will pay almost $1,200 more than what someone with good credit would pay per six-month policy period. If you have student loans after you graduate, be sure to keep up with them to avoid any increases to your premium.
Updating data...
| Credit tier | Avg. 6 Mo. Premium |
|---|---|
| Poor (below 580) | $2,340 |
| Average (680-719) | $1,381 |
| Good (680-719) | $1,256 |
| Excellent (720+) | $1,061 |
Source: The Zebra
Keep in mind that certain states have made it illegal for insurers to consider credit score as a factor for determining a premium. That said, maintaining a high credit score can help you in countless other ways outside of influencing your auto insurance costs.
Learn more about how credit score impacts auto insurance rates.
Consider how much insurance coverage you need
If you have an older vehicle, consider whether having collision or comprehensive coverage is worth it. Unlike liability insurance, these coverages are only required if you’re leasing your vehicle or have a loan on the vehicle. If your car is paid off and the value of the vehicle is less than $4,000, you might benefit from reducing coverage. While the cost of coverage options will depend, they can account for half of your monthly payments.
Bear in mind, however, that by doing this you put yourself at risk if you're in an at-fault accident as comprehensive and collision protect your car. So, if you still want full coverage for your vehicle in the event of an accident, keep comprehensive and collision.
You can determine the value of your vehicle via Kelley Blue Book and NADA online. If your vehicle is worth more than $4,000, consider raising your deductible. Because your premium and deductible are inversely related, a high deductible will lower your monthly payments.
Unlike health insurance, you cannot age out of an auto insurance policy. If you move back to your parents' home after college, consider staying on their insurance plan while you work on starting a career. As more experienced drivers, your parents will likely receive a lower quote than you would for a standalone policy. Additionally, they may be able to take advantage of home and auto bundling discounts that you can't receive yet.
However, keep in mind that you can only stay on your family's insurance plan if you live in the same home as your parents. If you move, you'll need to start your own policy.
Drew Pitt, Insurance writer at The Zebra
Car insurance when moving out of state
Many college graduates move out of their parents house and to a different state after getting their degree. This relocation can have a major impact on the cost of car insurance, and the availability of coverage options and discounts.
State impacts to car insurance
Auto insurance is state-regulated and ZIP code-specific. Every state has its own laws regarding insurance coverage minimums, and every ZIP code pays a slightly different premium. When moving from one state to another, you need a policy that is written for the state and rated for your new ZIP code.
Registration and driver's license regulations
When you move to another state, you need to make sure you update your driver's license and your vehicle's registration information. In order to update your driver's license, you will need the following information:
- Identification: Your current license and additional forms of identification, such as your social security card
- Proof of residence at your new address: Usually two forms, such as utility bills or some kind of invoice
- A form of payment: There will be associated fees with this process
Your vehicle is registered with your state DMV (or similar body like a BMV, MVD, or MVA) so you will need to update it prior to moving. Be aware, you generally must register your car in your new state within a certain period of time. Usually, the process is pretty straightforward. You will need the following ready:
- Your identification and vehicle information: Your driver’s license and VIN
- Proof of ownership: Lien statement or title
- Odometer disclosure statement: This requirement varies by state
- Emissions disclosure statement: This requirement varies by state
- Bill of sale: This requirement varies by state
After gathering the documents your state requires, you will need to prove you have insurance, get the vehicle inspected, then complete the registration form. Some DMVs allow you to do this online; others require you to go to the DMV in-person. After completing your registration, you'll get your new state's license plates, tags, and registration papers.
Car insurance and roommates
After graduating from college, you may live with a roommate or two to save money on rent. However, having a roommate can add some complexity to your car insurance situation. Here, we've answered some questions that can help you effectively navigate how car insurance works when you have a roommate.
Yes, you can add a roommate to your policy as a covered driver, and you should if you plan to let them drive your car. By adding a roommate to your car insurance, you ensure that any damage they cause to your vehicle or others is covered and can even get a multi-driver discount. Keep in mind that this may cause your premium to increase — especially if your roommate has bad credit or a poor driving record.
If your roommate does not use your vehicle, there’s no reason to add them to your policy. Your insurance company might require you to list them as an excluded driver because you live at the same address. Just keep in mind that if your roommate does drive your car while being listed as an excluded driver, any damage caused in an accident may not be covered.
Ultimately, you should add your roommate to your car insurance policy if you ever plan to let them driver your car; however, you may not want to add them if they have a high risk profile that could sharply increase your premium. For more information on this subject, check out our guide to car insurance with roommates.
Final takeaway - Shop around to save on car insurance
The important takeaway for getting good, affordable car insurance after you graduate is to shop for a new plan every six months. As a young driver, each birthday can lower your insurance premium by hundreds of dollars, and you'll maximize that benefit by getting a quote as frequently as possible. Enter your ZIP code below to start comparing rates today.
Frequently asked questions: Car insurance for recent grads
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About The Zebra
The Zebra is not an insurance company. We publish data-backed, expert-reviewed resources to help consumers make more informed insurance decisions.
- The Zebra’s insurance content is written and reviewed for accuracy by licensed insurance agents.
- The Zebra’s insurance editorial content is not subject to review or alteration by insurance companies or partners.
- The Zebra’s editorial team operates independently of the company’s partnerships and commercialization interests, publishing unbiased information for consumer benefit.
- The auto insurance rates published on The Zebra’s pages are based on a comprehensive analysis of car insurance pricing data, evaluating more than 83 million insurance rates from across the United States.
