You're officially out in the world — and responsible for a lot more.
On average, drivers younger than 25 pay more for car insurance than do drivers in any other age bracket. While there isn’t a set age for recent grads, many do fall in within 21-to-25 cohort. Let’s explore the cheapest car insurance companies for recent graduates and review some helpful policy information worth being aware of.
According to The Zebra's insurance rating methodology, USAA is the cheapest car insurance provider for drivers between the ages of 22-25. At $655 for a standard six-month policy,USAAis $404 cheaper than the group average.
If you’re not a military member — or related to one — consider GEICO. At $747, GEICO's average rate is $312 cheaper than the group average. Although this isn’t representative of every recent graduate driver, you can enter your ZIP code below to find personalized rates.
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.
Telematics are in-car devices which 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:
Below are some common discounts you could expect from popular providers in the US.
Average of $130
Average of 10-25%
State Farm Drive Safe & Save
Up to 15%
Up to 40%
Liberty Mutual RightTrack
Average of 5-30%
Consider bundling renters or homeowners policy with your auto insurance on the same company. This will simplify the payment process and potentially provide a discount. On average, you can save $56 by bundling your home and auto policies.
For more information regarding bundling, see our additional content:
Insurance companies use personal attributes correlated with risky driving tendencies. As it relates to your post-grad life, insurance companies actually see a driver with more education as more responsible. This is why greater educational attainment may lead to lower auto insurance rates.
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 $710 more per policy period for auto insurance. If you have student loans after you graduate, be sure to keep up with them to avoid any increases to your premium.
|FICO Credit Tier||6-Month Premium|
|Very Poor (300-579)||$1,364|
|Very Good (740-799)||$769|
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’releasingyour vehicle or have aloanon the vehicle. If your car is bought and paid for and the value of the vehicle greater 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.
A big factor to consider after you graduate is the idea of relocation. Whether that means returning to your hometown or getting a job elsewhere, moving can have big impacts on your driving life for a couple of reasons. Let's explore.
Insurance is state-regulated and zip code specific — meaning every state has its own laws regarding their insurance coverage. 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 would be moving to.
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:
Your vehicle is registered with your state DMV department 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 straight forward. You will need the following ready:
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.
Unlike health insurance, you cannot age out of an insurance policy. However, leaving your parent’s address and taking a car with you can make you ineligible. Because car insurance is zip code specific, your policy needs to priced for the garaging address the vehicle is the majority of the time.
If you get a job in another city and move, you will need an insurance plan for your new residence. Bear in mind, your parent’s can still pay for it - an insurance company doesn’t care who pays the bills.
Once you graduate from college, it’s likely you will have a roommate or two — it's cheaper than living alone, and, depending on the roommate, it can be fun. Your insurance company understands living with other people, but they do have some concerns that can complicate your relationship with your insurance company.
As you and your roommate are sharing a space, your insurance company worries that you will share vehicles. Unless you share a policy with your roommate, your insurance company isn’t pricing your premium to cover an additional driver.
If you and your roommate will be sharing vehicles, you should add them to your policy. This will not only ensure any damage they cause to your vehicle or others is covered, but it can come with a multiple-driver discount. This will 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 for them to be added to your policy. Your insurance company might require they be excluded from your policy because they’re living at your address. An insurance company will request you to exclude a driver if they’re worried they could potentially be using the vehicle without being a chargeable driver. In the event the excluded driver causes damage, they could refuse to provide coverage.
The important takeaways for car insurance after you graduate is to shop for a new plan every six months. If you’re a young driver, each birthday will lower your insurance premium by hundreds of dollars. Enter your ZIP code to start comparing rates today.
If you're looking for more specifics regarding ways to save on car insurance, see our additional articles here
How should I handle my daughters’ car insurance when they’re in college?
Our daughters are still shown as living with us even though they are in college and the vehicles are with ...
Should I register my vehicle in the state I attend college in?
Should a college student who has a residency in a different state register his car to the state he goes ...
Would moving 19 year old child who is in college onto her own policy a smart move?
My husband and I are considering moving our 19 year old daughter onto her own policy. She is a responsible ...
Can my parent’s be sued if I don’t have enough coverage after an accident?
I am 24 year old. I live at home, I’m a student, owns her car/pays for car insurance, no assets. ...
Well, we’ve done it again. We’ve gone and gotten super curious about how car insurance is impacting the 250 million...
Car sharing services like Zipcar and Car2Go allow city dwellers to forego car ownership without losing all of the perks....
This past May, I took a road trip from Rhode Island to West Virginia to attend a friend’s wedding. Despite...
No broken windows. No lengthy process of wedging the door open. No hotwiring, no alarm, no concerned passerby dialing 911....
You get in an accident or your car is pummeled with hail. You need to figure out how to get...
“What you don’t know can’t hurt you…” … is an entirely false statement in the world of auto insurance. Car...
Today, The Zebra debuted the Insurability Score™, a personalized calculation which reveals to drivers what is affecting their insurance risk,...
Let’s get one thing out there. No one is especially psyched to get car insurance. You get it because it’s...
Today The Zebra announced that we closed a record-breaking $40 million Series B funding round, led by Accel Partners. As...
Anyone who has ever owned a “lemon” (a car that’s a dud) knows how stressful and costly car repairs can...
In nearly every conceivable scenario, if you’re driving around in a motor vehicle, there is no reason why you should...
If you don’t live in a flood plain, making sure your car insurance covers flood damage might be low on...
Wells Fargo is now finding themselves in hot water over the recent reports that they charged over 570,000 customers for...
Moving to a new state can be an exciting adventure. As with most moves, it requires a bit of paperwork...
It’s not uncommon for your friend to share your clothes, your skillet, or your favorite movie. And for those types...
You know you need good credit to take out a loan, a mortgage, or your friend with expensive taste. But...
Of course there are many reasons you might want to lease your car. Perhaps you like the idea of driving...
If you’re one of the 250 million drivers in the United States, you’re required by law to have car insurance....
When searching for an insurance policy, it’s important for consumers to do their due diligence and compare quotes before choosing...
Some senior stats for you: By 2030, one in five Americans will be over 65. The first of the baby...
You probably already take care of your banking errands on your phone (thanks, mobile check deposits!). You may have shown...
You might be familiar with a few scenarios that could make your auto insurance rates change: You bought a new...
Buying a new (or new-to-you) car can be an overwhelming process. First, you need to research all your options to...
Rental cars offer tremendous convenience. Whether you need a vehicle to help you explore a vacation destination or get you...
A driver’s license is more than just permission to take to the open road. To many, including first-time drivers, it...