Cheap Car Insurance for College and Grad Students

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What is cheap car insurance for college students and recent grads?


College is synonymous with ramen noodles, IKEA-filled apartments, and, in general, not having lots of extra cash. Unfortunately, it's also a time you should expect to pay a lot more for car insurance. This is because insurance companies see younger drivers as more likely to receive a citation or cause an accident — all of which make them risky investments to insurance companies. And as we all know, a risky investment for a company based on reducing risk isn’t a good asset. Still, the circumstances of college and grad school as well as the price presents some unique ways to save some money.




In this article, we will discuss:


  1. How much do college and grad students pay?
  2. What are some common discounts and ways to save? 
  3. What to do with your car when moving out of state? 
  4. What about living with your roommates?



How much do college students and recent grads pay?


National Annual Average Premium for College and Grad Students

Age Group Avg. Annual Premium
18 $4,736
19 $3,197
20 $2,891
21 $2,243
22 $2,023
23 $1,869
24 $1,757
25 $1,462
Average $2,522

On average, college and grad students pay $2,522 per year for car insurance, or $1,261 per a typical 6-month policy. That’s about $1200 more than the national average. As we stated, this is because of the level of concern insurance companies have with young and less experienced drivers. And any time an insurance company has a risk, they will cushion themselves with additional premium. But don’t worry, we have a plan!





Here are some ways to save.


There are a number of discounts that can help soften the burden of paying for auto insurance that are specific to your age group. Let’s explore.


Good Student Discount

If you have the grades, typically over a 3.0, you might want to consider the Good Student Discount. Your insurance company would require proof, such as a transcript, every 6 months in order to qualify. This discount is restricted to students under 25, so not every grad student or college student will qualify.


Defensive Driver Discount

Another option is what’s called a defensive driver discount. Young drivers who have taken a professional driving course are less likely to receive a citation or get into an accident. The exact requirements and specifications for this discount vary, so consult your insurance company for details!


Distant Student Discount

This discount applies to college students who are on their parents plan and live more than 100 miles away from the primary residence — aka your parent’s house. The theory behind the discount is students who live further away are not going to be driving the car frequently, and thus the risk for them causing an accident is lessened. This discount is a good alternative to being dropped from your parent’s plan because you no longer live at that residence. In the insurance world, a long period without coverage can cause your premium to be higher when you get insured again.


Educational discounts


National Average Annual Auto Insurance Premiums by Level of Education

None High School Bachelors Masters PhD
$1,355 $1,342 $1,323 $1,320 $1,319

While the amount is small, the more education you receive the lower your premium will be! Insurance companies equate high levels of education with a less risky driver and thus reward you will a lower premium. Below is our analysis of educational level on car insurance premiums.


Multi-Policy Discounts

Consider bundling your renters or homeowners with your auto insurance on the same company. This will not only make payments easier, but give you a little discount.


National Average Annual Insurance by Homeowner Status

Renter Homeowner Renter with Multi-Policy Homeowner with Multi-Policy
$1,323 $1,292 $1,250 $1,181




Going to school out of state?


A lot of young adults chose to go to undergrad and graduate school out of the state they currently reside. Which, from an registration and insurance perspective, requires some changes to your policy. Let’s explore it.


Insurance


Insurance is state regulated and zip code specific — meaning every state has their own ways of handling things. So, if you’re moving from one state to another, you need to get a policy that is written for the state and rated for the zip code you could be moving to. Compare quotes for your zip code here.

Registration and Drivers License


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:

  1. Identification: Your current license and additional forms of identification such your social security card
  2. Proof of residence at your new address: usually two forms, such as a utilities or some kind of bill
  3. Money! Gotta pay for it.

Your vehicle is registered with your state DMV department so you will need 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 straight forward. You will need the following ready:

  1. Your identification and vehicle information: Your drivers license and VIN 
  2. Proof of ownership: lien statement or title
  3. Odometer disclosure statement: this requirement varies by state
  4. Emissions disclosure statement: this requirement varies by state
  5. Bill of sale: this requirement varies by state


After this, 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 the DMV in person. Then you will receive your new license plates for your new state!


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Car insurance + Roomies


Being in college and grad school, it’s very likely you will have a roommate or two and your insurance company understands this. Still, living with someone can complicate your relationship with your insurance company. As you and your roommate are sharing a space, they worry you will also be sharing vehicles. And, unless they’re on your policy, your insurance company isn’t charging your premium for that additional driver. Follow our handy guide to navigate the waters of insurance companies and roommates!


Should you share a car insurance policy with your roommate?


Together
Separate
Having your roommate and their vehicle on one policy can give you a multi-vehicle discount. Plus, you can speak with your agent or a customer service representative to have your bill evenly split by how much your company rates you as a driver (rather than just 50/50). If your roommate has a bad driving record, a bad credit score, or drives a fancy car, your premium can be impacted negatively as your insurance sees these things as risky. A bad driving record and credit score equate to a higher possibility for claims for an insurance company. Whereas a fancy car is harder to replace if anything happens to it.


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Summary


College and grad school can be very expensive time as a young adult. You’re not earning a lot of money (if any) and everything seems to be more expensive for you. That is especially true for auto insurance. More than any other age group of drivers, aside from 16-year-olds, college-aged students pay the most for auto insurance. Still, following our guidelines can help you save as well as help you navigate some of the uncertain times ahead of you.




Ready to start comparing car insurance? Start here.