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Car insurance for college graduates
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College graduation is an exciting time. It marks the transition into a new lifestyle. Graduates are expected to move out of student housing, find a job and start paying back student loans. Car insurance may be the last thing on your mind, but properly insuring your vehicle is more than just an obligation — it can save you some serious money in the event of a major accident. Help set yourself up for financial success by learning what impacts the cost of car insurance and how to shop for an affordable policy.
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Coverage.com, LLC is a licensed insurance producer (NPN: 19966249). Coverage.com services are only available in states where it is licensed. Coverage.com may not offer insurance coverage in all states or scenarios. All insurance products are governed by the terms in the applicable insurance policy, and all related decisions (such as approval for coverage, premiums, commissions and fees) and policy obligations are the sole responsibility of the underwriting insurer. The information on this site does not modify any insurance policy terms in any way.
- College graduates typically pay more for car insurance than older, more experienced drivers.
- On average, car insurance costs between $2,400 to $4,600 per year for full coverage for drivers ages 20 to 25.
- Factors such as age, gender, credit score, driving record, annual mileage and geographic location play a role in determining car insurance rates.
- Getting quotes from multiple providers and taking advantage of car insurance discounts may help lower the cost of premiums.
How much is car insurance for college graduates?
Data from Quadrant Information Services indicates that the average cost of full coverage car insurance is $2,014 per year, while minimum coverage averages $622. However, college graduates will likely pay more. Car insurance premiums for young adults are typically higher, as statistics show this cohort is more likely to be involved in an accident.
In most states, gender also plays a role in how insurance providers calculate rates. The cost of car insurance for males is generally higher than for females because research suggests men are more prone to risky driving behaviors.
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Each car insurance company has its own underwriting process, so oftentimes rates will vary. Shopping around can help you identify the right car insurance policy for your needs and budget. Get quotes from multiple providers to find the company that can offer you the best deal. When doing so, be sure to ask for the same coverage types, policy limits and deductibles from each insurer so that you can make an apples-to-apples price comparison.
Learn more: How much car insurance do you need?
How being a college graduate impacts car insurance
When searching for car insurance, keep in mind that a number of factors impact rates.
- Credit score: Depending on the laws in your state, your insurance-based credit score could be factored into your quote. Graduates with lots of debt or no credit may find that they face higher premiums. Building your credit history might help you earn lower rates over time.
- Driving record: Younger drivers (those under age 25) are viewed as the riskiest. With a higher likelihood of accidents leading to costly claims, insurers typically charge these drivers more. But if you can maintain a clean driving record — meaning no speeding tickets, accidents or DUI convictions — you may avoid even higher rates.
- Annual mileage: Driving long distances on a regular basis equates to more opportunities to be involved in an accident. If you make a point to drive fewer miles, you might save some money on car insurance.
- Geographic location: Where you live has a big impact on how much you pay for car insurance. For instance, drivers who live in big cities with dense populations, limited parking and higher-than-average crime will likely pay more. Living in a suburb and having access to garage parking may help you pay less.
Bankrate’s take: Car insurance rates vary by state, city and even zip code. According to Bankrate’s 2023 study of quoted annual auto insurance premiums, New York, Florida, Louisiana and Kentucky are the nation’s most expensive states for car insurance. When choosing where to live after graduation, college students may want to factor car insurance rates into an area’s cost of living if budget is a concern.
Cheap car insurance for college graduates
Finding affordable car insurance after graduating may be difficult, but it’s not impossible. Shopping around, driving safely and paying down debt are just a few ways you may be able to lower your car insurance premium over time. Here are a couple of other strategies.
Car insurance discounts
When considering different insurers, be sure to look into discount opportunities. You may be able to find discount information on a company’s website, but you’ll likely need to speak with an agent to determine which discounts you are eligible to receive. Common discounts include:
- Telematics discounts: Telematics systems in vehicles collect data on drivers, including driving habits, mileage and fuel usage. Some insurance companies offer discounts for drivers who receive consistent safe-driving feedback.
- Bundling discounts: If you own or rent a home following graduation, consider bundling a homeowners insurance policy or renters insurance policy with your auto insurance. Doing so could save you a significant amount, depending on which provider you select.
- Organizational/professional discounts: Several insurers extend discounts to certain organizations or professions like health care workers, teachers, military members, university alumni and more. Offerings vary widely, so you’ll need to do some research to determine how you may benefit.
How to pick a cheap car insurance policy
"Take the time to shop for auto insurance so you can compare costs and coverage levels,” recommends Mark Friedlander, director of corporate communications for the Insurance Information Institute.
“Get at least three quotes. Find out what discounts you may qualify for. Most importantly, focus on getting the most robust coverage that fits your budget so you are financially protected from at-fault accidents. If you need guidance, work with a local insurance agent."