Is car insurance cheaper for students than the employed? Auto insurance typically costs more for younger drivers, including younger students, than for more experienced drivers. But comparing rates and looking for discounts can help you pay less.
One of the reasons auto insurance companies tend to charge young drivers more is because they are believed to be at a higher risk of a car accident. According to the Centers for Disease Control and Prevention, drivers ages 16 to 19 are nearly three times more likely than drivers ages 20 and older to cause a fatal accident.
But even if you’re a student, you may be able to lower your auto insurance premium. So before you start school, here are three things to know when considering your insurance options and possible ways to save on coverage.
1. Students can stay on parents’ policy
One way to keep your auto insurance rates low is to stick to parental policies. This may even be possible if you attend school out of state, as long as one of your parents is listed on the title of the car you are driving. But if you have your car and you’re the only person named on the title, you’ll probably need to get a separate policy, which usually costs more.
If you plan to live at home while you attend college, you may be able to remain on your parent’s policy if you do not own the vehicle you will be driving. But if you’re going to live on campus or rent an apartment during the school year, check with your insurance company to find out if you need to buy their coverage.
Even if you don’t drive to college, it’s usually a good idea to stick with your parents’ insurance so you’re covered if you ever have to drive home during breaks. Your dad may even get a discount on his policy if you plan to keep your car at home while you’re in school, as long as that dad owns the car. Staying on a parent’s auto policy can also help you avoid coverage shortfalls, which can increase your rates when you buy their insurance policy in the future.
2. Students pay more for car insurance as younger drivers
While insurance companies often charge younger drivers, such as students, higher auto insurance rates, the amount you pay depends on many factors. But remember: If you can stay on a parent’s policy, you’ll usually pay less.
If you need a car at school and staying on your parent’s policy isn’t an option, buying your policy can be expensive. Here are some of the factors that can affect your rates.
- Location – Auto insurance companies set rates based on the location of the car. If your vehicle is in an urban area, the rates may be higher than if it were in the suburbs or rural areas.
- Age – In general, the younger you are, the higher your rates will be. Insurance premiums tend to drop significantly after you turn 25 if you have a decent driving record.
- How Much You Drive – In general, the more you drive, the higher your insurance premium will be because the more likely you are to have an accident. If you don’t plan on driving a lot while you’re in school, a pay-per-mile policy can save you money.
3. Students can get discounts on car insurance
While you can’t control some factors that affect rates, such as your age, there are things you can do to lower your costs. Many companies offer a variety of auto insurance discounts that you can take advantage of. These are some examples, although they may vary by insurer and state.
- Resident Discount: If you go to school but plan to keep your car at home and stay on parental policy, your parents can get a discount because you won’t be driving much.
- Good student discount: If you make it through the books and maintain a certain GPA (this may vary by the insurance company), you may qualify for a good grade discount.
- Discount on multiple policies: Insurance companies often offer discounts to people who purchase more than one policy, such as a car policy and renters insurance.
- Anti-theft device discount: If you take extra measures to protect your car against theft, such as installing a car alarm, you may qualify for a reduced rate.
- Driver training discount: If you are under 21 years of age and are taking a safe driving course or driver training course, you may be eligible for a discount.
- Member Discount for Organizations: Some auto insurance companies offer discounts to members of certain fraternities, sororities, honorary societies, or other student organizations.
Be sure to ask any insurance company you are considering about any discounts they offer such as those listed above or any other relevant discounts. For example, Erie Insurance offers a young driver discount to single students under the age of 21 who live with their parents. If you attend school in the state and don’t plan to live on campus, it might be worth checking out.
6 Ways You Can Save Money On Your Student Car Insurance
Having a car as a student is a real bonus, but being a student doesn’t come cheap, with tuition, housing costs, and all those books you have to buy. Auto insurance may not be high on your list of priorities, but if you own a car, you are required by law to insure it. So to stretch your student loan as much as possible, here are 6 ways you can save money on your student car insurance.
1. Find cheap student car insurance
When you’re trying to cut costs as a student, you’re probably looking for cheap car insurance. Unfortunately, as a young driver with less experience, your auto insurance is likely to be more expensive, but there are ways to keep costs down.
The first place many people go to is a car insurance comparison site. When shopping for auto insurance, it’s tempting to look for the cheapest deal available, but remember to always check what’s covered.
2. Check the insurance group when you want to buy a car
When you first start looking at cars, it’s important to get some insurance quotes first. Each car is placed in a car insurance pool; In general, the lower the group number, the cheaper the insurance. Checking the cost of auto insurance before buying will help you choose the right car for your budget.
3. Make your car as safe as possible
Student housing isn’t always in the best area of the city. Living in an area with a high crime rate can affect your auto insurance premium. It may be a good idea to look for a car with an immobilizer and alarm as it can help lower your premium.
4. Choose low mileage car insurance
When applying for car insurance, you will be asked how many kilometers you drive per year. This is because, statistically speaking, the less you are on the road, the less likely you are to file a claim. Choose how many policy miles you need: 6,000, 8,000, or 10,000 miles. Low mileage car insurance can be a good option for you if you are a student who cannot drive very far or very often.
5. Add a named controller
It may be cheaper to add an older, more experienced driver to your policy as a designated driver. However, this is very different from driver coping, which is when you are the primary driver of the car but take out an auto insurance policy with a more experienced driver as the primary driver and you as the designated driver to reduce the top quality. This is illegal and can leave the car uninsured in the event of an accident. This would expose the policyholder to the possibility of having to cover the costs of an accident themselves, in addition to a driving conviction.
6. Drive Safely
The black box measures your driving behavior, such as speed, total kilometers, and how smoothly you drive. Positive driving can earn you up to 100 bonus miles each month, and collecting them throughout the year can save you money on renewal.
Is Car Insurance Cheaper For Students Than The Employed?
Student car insurance costs are generally higher than average, as most student drivers are under the age of 25 and are considered riskier on the road than older drivers. Students are also more likely to be new drivers, meaning they have not been able to get a discount without claims.
If you’re going to college, check with your parents’ insurance company or agent to find out if you’re covered under their policy while you’re in school and if the rate will change to maintain coverage.
If you don’t qualify for coverage under your parents’ policies, shop around to find good affordable auto insurance that fits your needs. Ask about all the available discounts and compare quotes from multiple providers to make sure you get the best auto insurance policy for your situation.