Best Companies Offering Cheap Car Insurance for College Students

A lot of college students are often short on funds and look to save money in any way that they can. Spending most of their time in class and studying leaves little time to work, and the jobs they do pick up don’t always pay much. If you own a car when you’re in school, then car insurance is likely your biggest bill — well, aside from tuition. Getting cheap car insurance quotes can help you lower that bill and save a little cash.

According to the Centers for Disease Control (CDC), young people between the ages of 15 and 24 make up approximately 14% of the total population, but the drivers in this age group account for 30% of the total costs of injuries caused by motor vehicles for males and 28% for females. While teenagers are the riskiest drivers, college students are still riskier than older adults.

Reviewing Your Options

Car insurance for college students is more expensive than for older age groups. This has to do with inexperience along with the distracted driving common among college-age people. While you may be a responsible driver with a clean driving record, you’re still considered a high risk because of your age group. This is reflected in your car insurance premiums.

Fortunately, many car insurance companies offer opportunities for college students to find affordable coverage. You’re not doomed to paying astronomical rates until after graduation — unless your driving record warrants it. Take a look at some of the insurance companies that offer cheap car insurance for college students along with information to help you get the lowest rates possible.

USAA

USAA is one of the top insurance providers, but it’s often not present in the ranks among other companies because it’s only available to members of the military and their families. If you qualify for USAA insurance, then you can expect competitive rates and top-notch customer service. If you complete a driver training course, you can qualify for a discount on your premiums. If you’re getting your own car insurance policy with USAA and a parent also has USAA car insurance, then you can get up to a 10% discount. With accident forgiveness, you don’t have to worry about your rate going up after your first at-fault accident.

State Farm

State Farm offers several opportunities for college students to lower their rates. Good grades can save you as much as 25% on your car insurance premiums. Additionally, drivers under the age of 25 can complete the Steer Clear Safe Driver Program for other discounts. This program furthers your driver education because it refreshes safe driving tactics and helps you set safety goals. Complete this course for an additional 15% discount.

American Family

American Family might be a lesser-known and smaller car insurance company, but it offers 16 different discounts to help you lower your rates while you’re in college. One uncommon discount that this insurance provider offers that others don’t is the Young Volunteer discount. If you volunteer with a non-profit organization for 40 hours per year, then you can lower your premiums. Likewise, if you get good grades, drive fewer than 7,500 miles per year and avoid accidents or traffic violations, it helps you get even cheaper rates.

Amica Mutual

Amica Mutual is a small car insurance company, but it ranks highly in terms of customer satisfaction. Whether you’re on your parents’ policy or seeking your own policy, you’re eligible for several discounts. The company offers online driver’s training, defensive driver and accident prevention classes to help improve your driving skills and also give you a discount. If you’re under the age of 30 and have been under a family member’s policy, then you qualify for the legacy discount. Alternatively, if you’ve been loyal to another company for several years before switching to Amica Mutual, you qualify for the tenure discount.

Cost of Car Insurance

The cost of car insurance varies from person to person. Several factors, as mentioned below, go into determining your rate. Location is a factor that affects people equally across the board. Nationwide, the average cost for a young male driver with coverage just above the state minimum is $5,411 per year. The table below lists the average annual premiums for young drivers in each state.

State Annual Premium
Alabama $4,692.00
Alaska $3,144.00
Arizona $4,468.00
Arkansas $6,792.00
California $6,177.00
Colorado $4,792.00
Connecticut $7,964.00
Delaware $8,716.00
Florida $4,278.00
Georgia $4,732.00
Hawaii $900.00
Idaho $3,309.00
Illinois $6,279.00
Indiana $3,330.00
Iowa $4,248.00
Kansas $4,680.00
Kentucky $9,807.00
Louisiana $11,176.00
Maine $3,188.00
Maryland $9,252.00
Massachusetts $4,076.00
Michigan $11,271.00
Minnesota $3,366.00
Mississippi $3,978.00
Missouri $3,784.00
Montana $4,656.00
Nebraska $3,927.00
Nevada $7,208.00
New Hampshire $4,335.00
New Jersey $9,048.00
New Mexico $5,504.00
New York $6,216.00
North Carolina $1,953.00
North Dakota $5,244.00
Ohio $3,352.00
Oklahoma $7,464.00
Oregon $5,024.00
Pennsylvania $10,208.00
Rhode Island $8,000.00
South Carolina $2,752.00
South Dakota $4,320.00
Tennessee $4,092.00
Texas $4,068.00
Utah $4,827.00
Vermont $3,432.00
Virginia $3,471.00
Washington $6,000.00
West Virginia $6,088.00
Wisconsin $7,227.00
Wyoming $3,738.00

When comparing car insurance quotes, be sure to evaluate what each company offers. The coverage required varies from state to state, so be sure to learn your state’s minimums before selecting a policy. Additionally, some insurers offer services such as roadside assistance or locksmith services. These come in handy if you’re far away from home. Companies that offer these services can help you get more for your money.

Factors Affecting the Cost of Car Insurance

In order to find affordable car insurance, you need to know what factors insurance companies consider when they determine your rates. In doing so, you can shave a few dollars off of your premiums. Age and gender are two factors that insurance companies consider and are two that you have no control over. The others that you have a little more flexibility with are your location, the type of car you own, your credit history, your annual driving distance and what’s on your driving record.

Location

Location plays a huge role in how much you pay out for car insurance. If you opt to go to a school in a small town or a rural setting, then you may see lower rates than if you choose to go to school in an urban area or big city. The reason for this is that there are simply more cars on the road in a city, so there’s a greater chance that you get into an accident — even if it’s not your fault. From the chart, you can see how car insurance rates vary greatly from state to state. Those rates vary even more when looking at individual cities within each state.

Type of Car

The type of car you choose also greatly affects the rates you can expect to pay for car insurance. Sports cars look nice and are fun to drive, but they also have the highest claim history of all the car types. For this reason, the premiums are much higher. Additionally, luxury, foreign or other expensive cars that are costly to repair also carry higher rates. Large cars, such as minivans or SUVs, with sturdy construction and more safety features often have lower premiums.

Credit History

While it may not seem like your credit rating has much to do with your driving record, insurance companies do take your credit score into consideration when they determine your rate. Insurance companies use your credit score to predict your likelihood of getting into an accident and how likely you are to pay your premiums. If you have good credit, then you can expect a lower rate. If you have bad credit, be prepared to pay higher premiums. Unfortunately, many college students don’t have much of a credit history at all. Depending on the insurance company, this is often on the same level has having poor credit.

Driving Distance

How far you drive and how often you drive are two factors that insurance companies use to determine your rate. If you spend a lot of time on the road, then you have a greater chance of getting into an accident. If you can prove to your insurance company that you only drive a short distance each day or don’t drive on a daily basis, then you might qualify for a lower rate.

Driving Record

Last, but definitely not least, is your driving record. This is the factor that insurance companies weigh pretty heavily. If you frequently get traffic citations or have been in a fender bender, then your rates are going to be higher — a lot higher, actually. This type of reckless driving puts you in a high-risk category, which makes your insurance rates skyrocket. Unfortunately, the driving records of your peers even play a role. Even if you’re 20 years old and a very responsible driver, other people in the same age group tend not to be as responsible. Your insurance rates may still be higher than someone in an older age group, but if you keep your driving record clean, you can see the rates decrease over time.

Discounts for Car Insurance

While college students tend to have higher car insurance rates than older adults, they also qualify for a few discounts to help bring those costs down. The exact discounts available to you as a college student depend on the company that you choose to insure your vehicle, but there are a few common types. Some companies offer more discounts than others.

Good Student Discount

Spending your time studying not only ensures that you do well in school but can also yield lower insurance rates. You can snag this discount as a high school or college student if you maintain certain grades in school. Likewise, if you spend more time studying, then you spend less time out on the road. As a result, you’re less likely to get in an auto accident, which also helps with your insurance rates. That’s a good reason to hit the books.

Safe Driver Discount

If you maintain a clean driving record for a certain amount of time, then your insurance company is likely to cut you a break on your rates. Avoid citations for speeding, obey traffic laws and avoid getting into an accident to have your insurance company classify you as a safe driver. If you have a car with certain safety features or take driving classes, you may be eligible for this discount.

Distant Student Discount

Some colleges don’t allow freshmen to have cars on campus. While this might seem like a pain, it can help you get a lower rate. If your car stays parked at home while you’re at school and you only get a chance to drive it when you’re home on a break, then you’re considered a distant student or a resident student. Because there’s a lower chance that you might get into an accident, many insurance companies cut you a break on your premiums.

Should You Get Your Own Car Insurance Policy?

When you shop for car insurance, you should consider whether you should shop around for your own policy or sign up under your parents’ policy. You can find cheaper rates if you remain on your parents’ policy for as long as possible. Multiple cars and drivers on the same policy often yield lower rates, but there are a few criteria that you must meet in order to remain on your parents’ policy. These criteria include:

  • Be under 25 years of age
  • Attend a school within 100 miles of home
  • Attend a school over 100 miles from home, but only drive during school breaks

An additional benefit of remaining on your parents’ policy is that it helps you establish insurance history at a lower rate. Just like with your credit, when you have a solid insurance history, it makes you less of a risk. When you do eventually move over to your own policy, you can take this history and the lower rates with you.

There are a few factors that can cause an insurance company to remove you from your parents’ insurance policy and subsequently require you to obtain your own coverage. First and foremost, you must be a dependent. Most college students that are fresh out of high school are still dependent on their parents; this is not often the case when you get closer to graduation. Additionally, if the insurance company considers you a high-risk driver, the insurance company may require you to obtain your own insurance coverage. Factors that can result in your removal from your parents’ insurance policy include:

  • Establishing financial independence
  • Getting married
  • Multiple accidents
  • DUI charges

Conclusion

Although college students are considered high-risk drivers, they don’t have to pay ridiculously high rates for car insurance. While drivers in this age group tend to pay more than older drivers, many companies offer discounts and opportunities to lower rates and make them affordable even on your college student budget. Shopping around and obtaining quotes from different companies can help you find the cheapest car insurance for your situation so you can stay safe on the road.

You can trust that we maintain strict editorial integrity in our writing and assessments; however, we receive compensation when you click on links to products from our partners and get approved.
Published September 6, 2016
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