College students are more likely to eat ramen (pre-packaged dried noodles three times a day, not fancy restaurant-style ramen). College life is costly and you don’t have a lot of flexibility in your income. It is expensive to rent a room and board, as well as books and other materials that can be used.
Students need to be careful about their spending, especially since car insurance for students can be so expensive. The right car insurance is not easy to find with the high rates for teens and college drivers. However, it’s possible to get it if you are a young driver .
Before purchasing or renewing auto insurance, there are important points college students need to know.
Why are students paying more?
Students are often offered higher rates for car insurance than those who drive older cars, due to the increased risk.
The CDC states that teens aged 16-19 are most at risk for a motor vehicle accident . Teen drivers are at high risk due to their inexperience and alcohol consumption. The National Highway Transportation Safety Administration, (NHTSA) reports that more than a third fatal alcohol-related crashes were caused by drivers aged 21-24 years. According to the Substance Abuse and Mental Health Services Administration, 37% college-aged adults were binge drinkers. 18% admitted to driving while under the influence. Younger drivers also lack the experience of more experienced drivers.
Insurance companies recognize that college students are more likely than others to be involved in an accident and to file a claim for car insurance. Therefore, they include that risk in their rates.
How to Save Money on Driving
Before we get into the details of how college students can afford decent car insurance, let’s look at other ways that they can keep their transportation costs down when they have a tight budget.
How to Save Gas
- Good gas mileage is a must. Students who commute to college often need to save hundreds of dollars every year by choosing a car that has excellent gas mileage. The Toyota Prius, Hyundai Ioniq and Honda Civic are just a few of the vehicles that are known for their great gas mileage. There are many more.
- Cash is always handy. Cash payments can help to lower gas prices. Cash payments are free from the fees and surcharges that credit card transactions often entail. Cash sales are encouraged by many gas stations. Some even offer lower prices for gasoline if it is paid with cash.
- Use public transport. Transport expenses can be almost eliminated by using public transportation. You can usually access most colleges and universities by bus, train or subway.
- Buy a bike. For students living in urban areas, a bicycle is a better alternative to public transport. A personal bicycle can be used for free once it is purchased. There are many options for bike sharing and rental in densely populated areas.
- You can carpool with your colleagues or classmates. Consider forming a carpool with your classmates and colleagues who live near you. You will be able to save money, and you’ll have company while on the commute.
How to save money on maintenance
- You can find car deals for recent graduates. Many car manufacturers offer special deals to recent college graduates. Students may be able to lease a car for a short term if they are not ready to buy a new vehicle.
- Ask your student about oil change programs. Regular oil changes are another way to save. Students can travel a lot and need to have their oil changed more often. However, many larger chains like Jiffy Lube offer discounts for students.
- Get free air and tire fill-ups. You can save money by checking your tire pressure yourself. Many gas stations provide free or inexpensive stations that can check your tire pressure and add air, if needed.
- Do it yourself repairs are possible. You can do basic repairs at home. You can save on labor and parts costs by learning how to perform essential maintenance. You will also be able to fix your car at your own pace, which can save you time. These simple repairs can save you hundreds of dollars.
- Change the battery.
- Change the oil.
- Change your spark plugs.
- Replace the tail lights and headlights.
- Change windshield wipers.
Insurance discounts
Most car insurance companies offer discounts. However, some discounts may be more beneficial for college students or younger drivers.
You can get discounts
Many car insurance companies offer discounts for college students such as Nationwide or State Farm.
- Student discount: Good grades in school can show that you’re responsible. This makes it more likely that your driver’s license will be issued to you.
- Driver’s education discount. Another way to save money when you insure your car is to take a driver’s training course. Drivers with a Geico policy can save up to $200 per year by getting a refresher course on the rules.
- Distant college student discount Car insurance companies will reduce your total premium by prorating your premium to reflect the time you’ve been away from school.
Students get discounts on affiliations
Students who are members of certain associations or organizations, such as:
- Geico offers discounts on car insurance for sororities, fraternities, and honor societies.
- Discounts for alumni and students: Liberty Mutual, like Geico, offers discounts to many alumni policyholders and universities. Students at the University of Maryland and University of Pennsylvania can get extra savings on their car insurance.
- Discounts for military personnel: A parent who is a veteran or a military member can get extra savings on their car insurance by taking advantage of military discounts. USAA is a military-only provider. However, there are many other companies that offer discounts for military personnel, including Farmers Insurance, Allstate and Esurance.
There are other ways to save
These additional savings programs, in addition to the affiliation discounts, offer other ways for college students to lower their car insurance premiums.
- Lower your mileage. You will be less likely to get in an accident if you drive less. Many carriers offer lower car insurance premiums for drivers who have driven fewer miles.
- Use a safe or used car. Damages to newer cars can be more costly because they are more expensive. An older car will usually cost less to repair and you may be eligible for lower car insurance premiums. You can also lower your premiums by driving a vehicle that has extra safety features. Look into models that have anti-lock brakes and electronic stability control.
- Explore pay-as-you-go insurance. You can opt for usage-based car insurance instead of paying full price. This monitors your driving habits, and charges you accordingly. This is a popular choice with many car insurance companies. Allstate has its Milewise program, Nationwide offers SmartMile, and Proactive offers Snapshot discounts.
- Car upgrades. You can make your car more secure and save money on your car insurance premiums by adding or upgrading.
- Dashcams A newer technology, dashcams can lower car insurance rates. They not only reduce the chance of vehicle theft but also protect you from false liability claims that could potentially cost your insurer money.
- Navigation systems: GPS navigation systems can be used to help you drive more safely and faster.
- Anti-theft device – A car alarm or another anti-theft gadget can help you get additional discounts, as it lowers the chance of theft or vandalism.
How much money can you save?
We regularly analyze trends in car insurance for college students and younger drivers using Quadrant Data.
Students can save an average $400 each year by taking advantage of student discounts. This is a significant saving. The average car insurance premium for college students is $5,335 annually, while the average driver will pay $1,555 per annum. This is almost $450 per month. The premium drops to $5,000 per year if the average 18-year old applies a good student discount.
It matters where you live. The average cost of car insurance varies greatly by state. Additionally, the average discount can vary quite a bit depending on where you live. Some states are more expensive than others. The average Florida premium is $7,128. However, you can save up to $6,500 if you take advantage of student discounts. Minnesota is home to one of the largest differences in discounted and undiscounted auto insurance. Premiums are 20% cheaper for a total cost of $32,26 annually instead of $3866 annually.
No matter where or what vehicle you drive, you need to compare car insurance rates and determine which company is best for you. Each company has different coverage options and savings programs that can make a huge difference in how much you spend. Talk to a licensed insurance specialist if you are unsure.
College students need car insurance. However, it doesn’t have to be expensive. Insurance companies offer great discounts to college students because they know how expensive life can be. The smartest college student can save money on their car insurance and eat out occasionally.
