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Owning a car can be expensive for college student drivers, with costs for maintenance, gas and auto insurance, plus a possible car loan. Budgeting is often necessary to ensure money lasts from semester to semester. Understanding why students pay more for car insurance than other age groups can help you prepare for the costs. Bankrate also provides ways college students can save money on insurance, as well as gas and maintenance costs.
- The highest risk of car accidents is attributed to drivers between ages 16 and 19, according to the CDC.
- Students can carpool with other students and take advantage of savings programs for maintenance costs as ways to save on car ownership.
- Car safety features and pay-as-you-go auto insurance are other potential ways to save on college student car insurance.
Why do students pay more?
College students are often quoted higher car insurance rates than older drivers, mainly due to the added risk.
According to the CDC, teens between the ages of 16 and 19 are at the highest risk of a motor vehicle accident. In addition to general inexperience on the road, alcohol is a significant concern for teen drivers. According to the National Highway Transportation Safety Administration (NHTSA), more than a third of all fatal alcohol-related accidents involved drivers between 21 and 24 years of age. The Substance Abuse and Mental Health Services Administration (SAMHSA) also reports that 31.4% of college-aged adults are considered binge drinkers, with the same age group showing 37% used illicit drugs in the past year, both of which impair driving. Additionally, younger drivers lack the experience of older, more experienced drivers.
Insurance companies know that college students are more likely to have an incident on the road and file a car insurance claim, so they account for that added risk in their rates.
Ways to save on driving
Driving is expensive, especially so for college students on tight budgets. Keeping transportation costs low can help students afford to keep their cars and insurance on the vehicle. Here are some ways to save on gas, maintenance and the cost of car insurance.
How to save on gas
- Choose a car with good gas mileage. College students commute a lot between home and school, so a car with excellent gas mileage can easily save hundreds of dollars each year. Cars like the Hyundai Ioniq, Toyota Prius, Honda Civic and Mitsubishi Mirage are all vehicles known for great gas mileage — and there are plenty more out there.
- Keep cash on hand. Paying with cash can keep gas costs down. Cash payments eliminate fees and surcharges commonly attached to credit card transactions. Many gas stations encourage cash sales and even charge a lower price for gas that is paid for with cash.
- Utilize public transportation. Public transportation can almost entirely eliminate transportation expenses. Buses, trains or subways are a fraction of the cost of driving and are usually accessible at most colleges or universities.
- Invest in a bicycle. A bicycle can be an even better substitute for public transportation, especially for students in urban areas. Using a personal bicycle is free after purchase, and there are also typically lots of options for low-cost bike sharing or rentals in more populated areas.
- Carpool with your classmates or colleagues. If you must drive, consider setting up a carpool or car-sharing arrangement with classmates or colleagues who live along your route. They will probably appreciate the opportunity to save money and it gives you the added benefit of some company during the commute.
How to save on maintenance
- Find car deals for new graduates. Many car manufacturers offer special purchase deals for current college students or recent graduates to buy a new car. There may also be short-term leasing specials available for students for those not ready to purchase a new car.
- Ask about student savings programs for oil changes. Another potential place to save is regular oil changes. College students can burn through many miles and require more frequent oil changes, but many of the larger chains, such as Jiffy Lube, offer students discounts.
- Utilize free tire and air fill-up services. To save extra money on diagnostic and professional services, check your tire pressure yourself. Most gas stations offer free or cheap stations to check tire pressure and add air if necessary.
Research DIY repairs. There are several basic car repairs that can be done at home. Learning how to do essential maintenance can save money on parts and high labor costs. It will also save time to repair the car on your own schedule. These basic repairs are easy to learn and can save hundreds of dollars:
- Change the battery.
- Change the oil.
- Change your spark plugs.
- Replace tail lights or headlights.
- Swap out windshield wipers.
Many car insurance companies offer discounts designed specifically for college students, such as:
- Good student discount: Earning good grades in school demonstrates to insurers that you are responsible, making it more likely that you are a responsible driver and often earning you a discount.
- Driver’s education discount: Another way to save money on car insurance is to complete a driver’s education course. For example, drivers with a Geico insurance policy could save by completing a defensive driving course to refresh their memory on the rules of the road.
- Distant college student discount: You could save money by leaving your car at home when you are away at school. Most car insurance carriers will discount your total insurance premium, prorating your premium to reflect the months you are away at school and not using your vehicle.
- Safe driver discount: Students can often save by demonstrating their safe driving practices through insurance programs designed for young drivers. For instance, there are savings programs like American Family’s Teen Safe Driver, for drivers under age 21, and State Farm’s Steer Clear program, for young drivers up to age 25. After completing the program, drivers could get a discount on their car insurance.
Affiliation discounts for students
Many insurance companies also offer discounts for students who participate in certain organizations or associations, such as:
- Sororities, fraternities or honor societies: Geico offers car insurance discounts for fraternities, sororities and even honor societies, along with an extensive list of other organizations.
- University and alumni discounts: Like Geico, Liberty Mutual is another company that offers discounts for many universities and alumni policyholders. Students at the University of Maryland, University of Pennsylvania, Drexel University and more may save extra money on their car insurance.
- Military discounts: If a parent is a veteran or military member, you might save extra money on your car insurance through military discounts. As a military-only provider, USAA is one option for military discounts for your car insurance, but a few other companies offer military discounts, too, such as Geico, The General and Liberty Mutual.
Other ways to save
In addition to affiliation discounts, there are other ways college students can help lower car insurance premiums using these additional savings programs:
- Lower your mileage. When you spend less time on the road, there’s a much lower risk of incident, so many carriers will offer lower car insurance premiums to drivers who rack up fewer miles.
- Drive a used car. Newer cars are typically more expensive, so damages usually cost more to repair. A used car is generally cheaper to fix and may qualify you for lower car insurance premiums than a new car. Driving a vehicle with extra safety features is another way to potentially earn lower premiums, so explore models with safety features like anti-lock brakes, electronic stability control, forward-collision warnings and automatic emergency braking.
- Explore pay-as-you-go insurance. Instead of paying full-price for car insurance, you might be able to sign up for usage-based insurance, which monitors your driving habits and charges your car insurance accordingly. It’s a popular option with several car insurance companies: Allstate offers its Milewise program, Nationwide has its SmartMiles program, and Progressive offers its Snapshot program.
Car additions. Some additions and upgrades may make your car safer and save extra money on car insurance premiums.
- Dash cams: Dash cameras could help reduce car insurance rates by reducing the likelihood of crime involving your vehicle and also protecting you against false liability claims that could cost your insurer money.
- Navigation systems: A GPS navigation system can help keep you feel more prepared when driving, helping you drive slower and more safely.
- Anti-theft device: A car alarm or other anti-theft device may earn you extra discounts by lowering the risk of theft or vandalism.
How much can you save?
Using Quadrant Information Services data, Bankrate regularly analyzes car insurance trends for younger drivers and college students. The national average cost of car insurance for full coverage is $1,771 per year. However, for an 18-year-old male driver on their parent’s policy, the average annual cost is $3,506. For a female the same age, the average cost is $3,198 annually. While the rate seems high, it can be even higher for 18 year olds who take out their own auto policy. The average annual cost for an 18-year-old driver on their own policy is $5,694 for a male and $4,946 for a female.
Fortunately, by the time a driver has turned 25, they can typically expect a lower rate due to having a longer history of driving experience. On average, 25-year-old male and female drivers pay $2,247 and $2,106, respectively, per year.
No matter where you live and what you drive, you should always shop and compare car insurance rates to see which company is the best for you. Every company offers different savings programs and coverage options that can have an enormous impact on what you spend. When in doubt, speak with a licensed insurance expert to find out what will work best for you.
Car insurance for college students is a necessary expense, but it does not have to be exorbitant. Car insurance companies know that life is expensive for college students and offer some great discounts. A thrifty college student can use their savvy to keep their other car expenses down, too — and maybe splurge on a meal other than ramen noodles once in a while.