Car insurance for college graduates

Graduating college is exciting, but it can also be expensive — especially when adding car insurance to the mix of student loan debt. When shopping for insurance, college graduates face unique challenges than other age groups. It is possible to find more affordable and better insurance solutions for college graduates by understanding the factors that affect their insurance quotes.

What is the cost of car insurance for college students?

Bankrate’s 2021 study on auto insurance premiums quotes shows that the average cost for full coverage car insurance is $1674 per annum, or $140 per monthly. Although this may seem reasonable, college students should be aware that their rates are likely to be higher than the average. The higher rates of college graduates being in an accident are due to their younger age. According to Centers for Disease Control and Prevention (CDC) data, 25% of all distracted drivers involved in fatal crashes in 2018 were aged 20 – 29. With the many are these determining factors in how affordable their auto insurance will be, but college graduates may also be impacted by the following:

  • Geographic location: If your college was outside of the state you live in, it may result in higher car insurance rates. According to Bankrate’s 2021 study of quoted annual auto insurance premiums, Louisiana, Florida, New York, Michigan and Nevada are the nation’s most expensive states for car insurance.
  • Credit score: Students who have student loan debts tend to either build their credit or manage a lower credit score. Although timely payments can improve your credit score and help you save money, a low credit score could result in a higher quote (for those states that allow credit to be a rating factor). You may notice rate increases if you’re working to rebuild your credit.
  • Driving record: Young drivers may benefit from learning safe driving habits early. Insurance companies use your driving record to assess your risk profile. Your provider will most likely take a greater degree of financial risk if you have a poor driving history. This can result in a higher premium.
  • Annual mileage: College students are eager to find work in their chosen field, regardless of the distance. The more miles you drive, the more likely you are to get into an accident. Insurers will be more inclined to file a claim if you have more than one car. Car insurance could cost you more if you drive more.

College graduates get cheap car insurance

There are many factors that can impact the cost of college graduates’ car insurance, but there are some steps you can take that will help to reduce the financial burden. If you are a resident of a state that allows credit to be rated, it is possible to improve your credit score by making timely student loan payments.

A clean driving record for at least five years is more likely to get you lower rates than someone who has been convicted of multiple traffic offenses. The best way to get the best car insurance rates for college graduates is to thoroughly research the providers in your area. You might find it beneficial to compare rates from different providers and get multiple quotes.

College student discounts

College students may be eligible to receive special auto insurance discounts depending on their academic performance and location. To help college students save money on car insurance, many insurance companies offer good student discounts and distant student discounts. Students who are 18-22 years old and have a minimum B average can get good student discounts. Here are some insurance companies that offer savings based upon student performance and geographic location:

There are other ways college graduates can save money on their car insurance

College graduates can save money by using these additional methods:

  • Compare vehicles: Some vehicles may be considered more risky than others by insurance companies. Consider researching whether the vehicle you are planning to purchase is high-risk by your provider before purchasing it.
  • Increased deductible: While you’ll need to pay more in an insurance claim, a higher deductible could mean that you can save money on your premium and be able to allocate funds for the unexpected.
  • Bundle your insurance: If you own or rent a house after graduation, it might be worth bundling your homeowners’ or renters’ insurance policy with auto insurance. It could save you significant money, depending on the provider.

Recent college graduates should be aware of the following coverages

College graduates should consider not only the cost of insurance but also the coverage that their carrier offers. These are some of the optional coverages college graduates might want to add to their car insurance policies.

Assistance on the road

Roadside assistance is an optional option offered by many insurance companies. If your car is experiencing an unexpected breakdown, you can add it to your policy.

Glass insurance

Some insurance companies offer specific policies for glass in vehicles. It can be costly to replace windshields or car windows. This policy may be the best option. Glass insurance coverage is important, especially if you live near a high crime rate.

Auto protection guaranteed

Gap insurance can help you pay off any car loan debts if your vehicle is totaled in an accident. Your car’s value begins to decline as soon as you leave the lot. Gap insurance allows you to claim the difference between what your vehicle is worth and the amount you owe on it. This will prevent you from paying a large sum for a totaled vehicle.

Questions frequently asked

Do I need to stay on the policy of my parents?

It is up to you to decide whether to stay on the policy of your parents. Many insurance companies offer discounts to multiple policies. It may be financially advantageous for you both to keep the policy if that is the case with your parents’ insurance provider. Your parents may not offer the coverage you require or penalize high-risk groups too harshly. You might consider looking for other providers if that is the case.

Is there a cheaper car insurance policy for college graduates?

College graduates will find the cheapest car insurance provider based on their specific circumstances. College graduates generally pay more than the average national annual cost of car insurance. Higher rates may be available for students who are good, distant, safe drivers, policyholders with high credit scores, and policyholders with excellent credit scores. The cost of insurance policies can also be affected by where you live. Consider shopping around for the best coverage in your area.

Which is the best type of car insurance for college students?

Finding the best car insurance for college graduates means doing thorough research. There are many carriers that offer different coverage options and rates. Some may be more suitable for your needs than others. Although a provider may appear affordable and reliable, they might have low financial strength or poor customer satisfaction. To make an informed decision, research the providers in your local area.

Why is college-educated car insurance so expensive?

Their age is the biggest factor that impacts car insurance affordability for college graduates. The highest risk drivers aged between 20 and 29 are those who were distracted driving victims. This makes them especially difficult to insure. Rates may be higher for these drivers than their more experienced, older counterparts.