Savanna Hoffman
Car insurance for students can be expensive, with drivers between the ages of 16 and 25 paying more than any other age group. The average cost of car insurance for students varies depending on several factors, including age, location, driving record, and whether they are on their parents' policy or have their own separate policy. Students who maintain good grades may qualify for good student discounts, and those who drive less may benefit from usage-based insurance plans or pay-per-mile programs.
| Characteristics | Values |
|---|---|
| Average monthly cost for students | $200 to $275 |
| Average annual cost for students | $2,400 to $3,300 |
| Average annual cost for students with full coverage | $3,775 |
| Average annual cost for 18-year-old students on parents' policy with student discount | $2,968 to $4,446 |
| Average annual cost for 21-year-old students on their own policy | $4,137 to $4,931 |
| Average annual cost for parents with 18-year-old students on their policy with a good student discount | $4,709 |
| Average increase in premium per month for adding a teen driver to a policy | $100 |
| Discounts | Good student, distant student, safe driver, multi-policy, bundling, multi-car, safety features, paperless billing, online payments, defensive driving course, driver education course, pay-per-mile insurance, telematics |
| Factors affecting insurance cost | Driving record, credit history, DUI/DWI, driving experience, age, residence, type of car, safety ratings, number of drivers, number of policies, deductible, miles driven, education |
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What You'll Learn
Student discounts
Car insurance for students can be expensive, with drivers between the ages of 16 and 25 paying more than any other age group. However, there are several ways for students to save money on car insurance. One way is to stay on their parents' policy, which is usually more affordable as the cost is split. Most states allow out-of-state college students to stay on their parents' car insurance if their primary address is still their parents' residence. Additionally, some insurers offer discounts for parents who have college students on their policy, including students who are away at school.
Students who are good drivers can also take advantage of discounts offered by many insurers. These include safe driver discounts, good student discounts, and multi-policy discounts. For example, GEICO offers a good student discount for full-time students who maintain a "B" average or better. Another way to get a discount is to enrol in a defensive driving course, which can enhance your driving skills and qualify you for lower insurance rates.
Telematics is another option for students to save on car insurance. Telematics is a technology that analyzes your driving habits and reports them back to your insurer. This can lead to discounts for safe driving. Usage-based insurance plans, such as pay-per-mile insurance, can also save money for infrequent drivers.
Finally, students can save money on car insurance by choosing the right car. Safe and reliable vehicles are usually cheaper to insure than high-performance or luxury cars. Additionally, students can consider raising their deductible, which is the amount they pay before insurance kicks in, to lower their premium. However, it is important to ensure that the deductible cost can be afforded.
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Choosing the right car
The average monthly cost of car insurance for students is around $200 to $315. This can vary depending on factors such as age, driving record, location, and the type of car. To reduce insurance costs, students can maintain good grades, choose a safe and reliable vehicle, and explore various discounts offered by insurers.
When choosing the right car as a student, there are several factors to consider:
Budget
Start by assessing your savings and budget to determine how much you can afford to spend on a car. This will help you decide whether to buy a new or used car and if you need to take out a loan. Consider not just the cost of the car but also the ongoing expenses such as insurance, registration fees, gas, and parking permits. If you need to take out a loan, be prepared to demonstrate a steady source of income, a good credit score, or have a co-signer.
Safety
Safety should be a priority when choosing a car. Look for vehicles with high safety ratings and features such as blind-spot monitoring, rear cross-traffic alert, lane departure warning, lane-keep assist, and adaptive cruise control. These features can help prevent accidents and keep you safe on the road.
Reliability and Reviews
Opt for a reliable vehicle with good reviews. Research the make and model you're considering and seek feedback from friends, family, and online customer reviews. Pay attention to both positive and negative comments to get a well-rounded perspective. Check the cost of replacement parts and labour to get an idea of potential repair costs down the line.
Fuel Efficiency and Environmental Impact
Consider the fuel efficiency of the car, especially if you plan to use it for longer commutes or frequent trips. A more fuel-efficient vehicle can help you save on gas costs. Additionally, explore options like plug-in hybrid or electric vehicles if you want to reduce your environmental impact.
Space and Utility
Think about the amount of cargo space you need, especially if you plan to move or transport larger items. Some vehicles offer more spacious interiors or cargo areas, which can be beneficial for students who need to transport their belongings or equipment.
By considering your budget, prioritising safety, opting for reliable options, and evaluating fuel efficiency, space, and other features, you can make an informed decision when choosing the right car as a student. Remember to also explore insurance discounts and maintain a good driving record to keep your insurance costs manageable.
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Safe driving
Car insurance for students can be expensive, with drivers under 25 paying more than any other age group. The average monthly cost of car insurance for teens is $315, or $3,775 per year for full coverage. However, there are ways to reduce insurance costs. Students can stay on their parents' insurance policy, which is usually more affordable, as long as they haven't moved out permanently and keep their parents' home as their permanent residence. Many insurers also offer discounts for young drivers who are good students, with a B average or better.
To ensure safety on the road and maintain a clean driving record, which plays a big role in insurance costs, here are some safe driving tips:
Defensive Driving
Practicing defensive driving can help you avoid crashes and lower your risk on the road. This involves anticipating other drivers' actions, maintaining a safe speed, keeping a safe distance from other vehicles, and watching the road ahead for possible risks and hazards.
Avoid Distracted Driving
Distracted driving includes talking or texting on your phone, eating, drinking, talking to passengers, adjusting the stereo, or performing any other tasks that take your attention away from the road. Driving requires your full attention and quick instincts, so it's important to stay focused and avoid distractions as much as possible. If you need to use your phone, exit the roadway and find a safe place to park first.
Obey Speed Limits
Speeding puts you, your passengers, and other road users in unnecessary danger and increases the risk of more severe injuries in a crash. Always obey speed limits and adjust your speed as needed for road conditions, such as bad weather or low visibility.
Buckle Up
Wearing a seatbelt is one of the best ways to protect yourself in a crash. It's also the law in most states, with fines for not wearing a seatbelt ranging up to $200. Make it a habit to buckle up as soon as you get into the car.
Get Enough Sleep
Drowsy driving can be just as dangerous as impaired driving. Make sure to get enough sleep and be mindful of your energy levels before getting behind the wheel. If you take medication, understand its potential effects on your driving ability and adjust your schedule or arrange alternative transportation if necessary.
Limit Passengers
For young drivers, the risk of a fatal crash increases with each additional passenger. Limit the number of passengers in your vehicle to reduce distractions and lower your risk. Encourage your passengers to wear seatbelts and remind them of the importance of safe driving practices.
Choose a Safe Vehicle
Opt for a newer vehicle with advanced safety features. Cars manufactured in the last three years are likely to have better safety standards and protection in a crash, including advanced airbag systems. Additionally, choose a vehicle with high safety ratings to help lower your insurance costs.
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Telematics
Car insurance for students can be expensive, with drivers between the ages of 16 and 25 paying more than any other age group. The average monthly cost of car insurance for teenagers is $315, or $3,775 per year for full coverage. However, students can save money on car insurance by maintaining good grades, choosing a safe and reliable vehicle, and taking advantage of discounts for students and safe drivers. One way for students to obtain significant savings on their car insurance is through telematics.
While telematics can lead to significant savings on car insurance, it also raises privacy concerns. Students considering telematics should carefully weigh the potential savings against the trade-offs in data privacy. Additionally, it is important to note that not all insurers offer telematics discounts, and some students may be hesitant to have their driving so closely monitored.
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Staying on parents' policy
Students can often get a better deal on their car insurance by staying on their parents' policy. This is usually allowed if the student is a full-time student and still lives at their parents' address, or if they are a full-time student living away from home but still using their parents' address as their permanent residence. In the latter case, some states and insurers may require the student to take out a separate policy if they are attending an out-of-state college.
Students who remain on their parents' policy are usually covered when driving their parents' cars. If the student has their own car, it may be possible to insure it on their parents' policy, depending on the state and insurer. However, this will likely increase the premium.
Staying on a parent's policy can help students avoid a lapse in coverage, which can cause insurance payments to rise when buying insurance in the future. It is also more convenient, as it is easier to manage a single policy than two. Additionally, many insurers offer discounts for parents with college students on their policy, especially if the student maintains good grades.
However, keeping a student on their parents' policy can lead to increased costs, especially if the student develops a poor credit history or gets a DUI/DWI. If the student moves out of the house permanently—and not just for school—they will likely need to seek their own insurance policy.
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Frequently asked questions
The average cost of car insurance for students varies depending on several factors, including age, location, driving record, and whether they are on their parents' policy or have their own policy. On average, parents with 18-year-old students on their State Farm auto policy pay $4,709 per year with a good student discount. The average annual cost for an 18-year-old on their parents' policy with a student discount is $4,446, while the average cost for a 21-year-old driver on their own policy is $4,931. USAA and State Farm offer the cheapest average rates for college students, ranging from $200 to $275 per month.
Students can reduce their car insurance costs by maintaining good grades, choosing a safe and reliable vehicle, and taking advantage of discounts such as safe driver, good student, and multi-policy discounts. Students can also consider usage-based insurance plans, which charge based on the number of miles driven, or pay-per-mile insurance, which is ideal for infrequent drivers. Additionally, students can explore defensive driving courses, bundle policies, or increase their deductible to lower their premium.
It depends on the student's situation. If the student lives at home or within the same city and uses the family car, it is more cost-effective and convenient to stay on their parents' policy. However, if the student has moved out permanently and keeps their car at their own residence, they will need to obtain their own policy. In some cases, out-of-state college students may be required to have their own policy or may find it more affordable to do so.
