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Car insurance for college graduates

Updated Mar 27, 2024
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How much is car insurance for college graduates?

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Key takeaways
  • 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.

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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Bankrate Insight

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.
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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.

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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.

Advertising Disclosure
This advertisement is powered by Coverage.com, LLC, a licensed insurance producer (NPN: 19966249) and a corporate affiliate of Bankrate. The offers and links that appear on this advertisement are from companies that compensate Coverage.com in different ways. The compensation received and other factors, such as your location, may impact what offers and links appear, and how, where and in what order they appear. While we seek to provide a wide range of offers, we do not include every product or service that may be available. Our goal is to keep information accurate and timely, but some information may not be current. Your actual offer from an advertiser may be different from the offer on this advertisement. All offers are subject to additional terms and conditions.

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."

Frequently asked questions

Methodology

Bankrate utilizes Quadrant Information Services to analyze 2023 rates for ZIP codes and carriers in all 50 states and Washington, D.C. Rates are weighted based on the population density in each geographic region. Quoted rates are based on a 40-year-old male and female driver with a clean driving record, good credit and the following full coverage limits:

  • $100,000 bodily injury liability per person
  • $300,000 bodily injury liability per accident
  • $50,000 property damage liability per accident
  • $100,000 uninsured motorist bodily injury per person
  • $300,000 uninsured motorist bodily injury per accident
  • $500 collision deductible
  • $500 comprehensive deductible

To determine minimum coverage limits, Bankrate used minimum coverage that meets each state’s requirements. Our base profile drivers own a 2021 Toyota Camry, commute five days a week and drive 12,000 miles annually. 

These are sample rates and should only be used for comparative purposes.

Age: Rates were calculated by evaluating our base profile with the ages 18-60 (base: 40 years) applied. Depending on age, drivers may be a renter or homeowner. Age is not a contributing rating factor in Hawaii and Massachusetts due to state regulations.

Gender: The following states do not use gender as a determining factor in calculating premiums: California, Hawaii, Massachusetts, Michigan, North Carolina, Pennsylvania.

Written by
Grace Kim
Insurance Contributor

Grace Kim has two years of experience in writing for finance and insurance domains such as Bankrate and Reviews.com. She has written about auto, homeowners, renters and life insurance. She has spent most of her professional experience writing about finance and tech topics.

Edited by Editor, Insurance