Avoid These 3 Things to Keep your College Car Insurance Affordable

Avoid these three things to keep your college car insurance affordable: 1) Don’t drive expensive cars, 2) Don’t have too many credit cards, and 3) don’t drive excessively or put a lot of miles on your car. The most common reason university students receive the highest auto premiums is because of their age. While you can't control your age, you can follow our tips to keep your college auto insurance affordable and compare quotes online to find cheap coverage.

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Tonya Sisler has a Bachelor’s Degree from the University of South Carolina in Journalism and has worked for 15+ years in management. She has also completed a proofreading certification and is currently a professional writer.

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Brad Larson has been in the insurance industry for more than a dozen years. He started out as a claims adjuster for a national carrier. He has since switched to the agency side of the business. Brad is licensed in all P&C lines.

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Reviewed by Brad Larsen
Licensed Auto Insurance Agent

UPDATED: Oct 31, 2020

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You should avoid these 3 things to keep your college car insurance affordable: expensive cars, too many credit cards and excessive mileage. One or more of these factors can keep your costs high or worse, increase your rates exponentially.

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The most common reason college students receive the highest auto premiums is because of their age. The automobile insurance industry places those under the age of 25 in the highest risk category and bases their rates on their inexperience behind the wheel. Since there is nothing that can be done about your age, it is wise to pay attention to other ways to keep your rates low.

Of course, there are a multitude issues that surround young drivers and the number of motor vehicle accidents that occur annually and according to the National Highway Traffic Safety Administration the majority revolve around inattentive driving, including talking or texting on cell phones.

However, extensive study has shown other pitfalls can lead to an increased automobile insurance premium and they may be things you never even considered.

Driving Expensive Cars

Today, many graduating seniors receive cars as presents and sometimes, depending on the financial stability of the families, these vehicles can be quite expensive. After all, college bound kids often require reliable transportation and what better way to ensure security on the road than to purchase a brand new car, filled with the latest gadgets and luxuries.

Unfortunately, when combined with a lack of experience behind the wheel, an expensive car can mean huge insurance premiums. On average, a college age student between 18 and 21 can expect to pay anywhere from 15% to 25% more than older, more experienced drivers.

While purchasing a brand new, expensive vehicle may be a wonderful gesture, it should be balanced with prudence and wisdom. This is especially true when a new driver is more likely to have minor scrapes and scratches while they learn to navigate the roads.

If you want to purchase a vehicle for your college age son or daughter, look for a new-used vehicle with low mileage and a good CARFAX report. This is an excellent resource you can draw from because it will help you to determine all types of issues before you make your purchase. Including, the number of collisions, mileage and any other problems associated with the vehicle’s history.

Ultimately, purchasing an expensive vehicle for a student may wind up costing you more than just the sticker price.

If an unfortunate situation occurs, like a motor vehicle collision, you will also have to bear the expenditure of a deductible, plus any extra expenses, like a rental car while their vehicle is being repaired.

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Having too Many Credit Cards

As a student, one of the main enticements you can expect is credit card offers and while the CARD ACT of 2009, has placed stipulations on the way predatory lenders can go after students, it has not stopped them from reaching the mass population.

This means you can still apply for a credit card if you show financial means, by way of specific income or if your parents assume responsibility by signing and acknowledging the obligations. Again, many parents may provide their children with their first credit card while in college to pay for items such as books or even registration fees.

However, if you are unable to curtail your spending and the charges get out of control you can begin building a negative reputation at an early age. This is not limited to obtaining additional credit cards. Since many car insurance companies are beginning to consider credit ratings as a way to determine their rates, this can backfire and cause you to pay more each year.

Additionally, your information can remain in their database for a specific period of time, making it virtually impossible for you to leave them and go in search of better prices. It is better for you to avoid the perils of credit card debt until you graduate from college and begin your career.

Once you have established a secure type of income and become part of the workforce you will begin to grow and mature financially. At that time, you should be able to make the decision as to whether you want to apply for a credit card.

Excessive Mileage

Racking up excessive mileage is one of the worst things you can do if you want to keep your college car insurance rates affordable. Virtually every car insurance provider will ask specific questions when applying for coverage and one of the most common questions always surrounds how you will use your vehicle.

In other words, will you only use your car on certain occasions? Or, do you plan to drive everywhere? If you become the designated driver for your friends and classmates, you increase your odds of becoming involved in an accident or motor vehicle violation substantially. If this happens, you can definitely expect to see an increase in your rates.

Since most college campuses allow bikes, you should invest in a quality bicycle and choose to leave your car at home. Not only will you save money on gas, but you will also decrease your chances of seeing a change in your premiums. You may even qualify for a discount if you remain below the average mileage for a single year. This is something car insurance companies are promoting nationwide.

Discounts Available for College Students

The car insurance industry recognizes how many young people between the ages of 18 and 21 are on the road today and because of this, most offer some type of discount specifically for students.

Depending on your provider, you may qualify for a discount of 10% to 20% annually. You must, of course meet certain requirements.

  • Maintain a certain GPA or Grade Point Average – Most car insurance companies mandate that the students maintain at least 3.0 average or better.
  • Honor roll or Dean’s List – To receive the highest discount, you should have made the Dean’s List or honor roll during the past semester.
  • Reaching the top percentile – If you reached the top of your class and remained within the 20th percentile, you can also look to receive exceptional student discounts.
  • Completed Student Driver Course – Most U.S. high schools offer a variety of student driver courses during senior year. If you participated in any of these classes and passed with an acceptable score, be sure to present this information, along with the supporting documentation to your insurance company.

If you belong to an auto club or roadside assistance club, you may also qualify for discounts. Many college age students may not think to purchase this type of coverage, but it is generally very inexpensive and can save time and money if or when your vehicle suffers any type of mechanical breakdown, or simply runs out of gas. Be sure to mention your membership during the application process.

College students who are not involved in any traffic violations for the first couple of years may actually qualify for good driver discounts. This is because the car insurance companies generally place them in such high risk categories that they prefer to reward those who obey the laws of the road and are very careful drivers.

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Work with the Industry and Remember to Shop Around

Just because you are an inexperienced driver does not mean you will automatically have to settle for the prices you are quoted. As with older, more experienced drivers, you need to do your homework. If your parents cannot add you to their car insurance policy, do your own shopping and get at least three quotes before you make up your mind.

Start by asking your parents why they chose their current provider and go from there. Find out how they treat their customers and what type of offers they can provide you. Remember, just because your parents are pleased with their service, does not mean they will suit your individual needs.

Ask some of your friends who they use and why, as well. They may be able to give you some very helpful tips. Once you have a short list to draw from, get started on your investigation. Look for consumer complaints by going directly to the Better Business Bureau. While not every company is obligated to report to them, those that have nothing to hide will gladly be members.

Also, check their ratings with places like JD Power to see how they rank among the other competitors. You can find a lot of useful information when you start digging. At the very least, you will be able to determine who is not suitable and who to avoid.

Make your Choice Based on Sound Research

After you have completed your research, it is now time for you to make a decision. Hopefully, you have located the perfect company that has a combination of integrity, financial stability and a number of qualifying discounts.

Be sure to read all of the fine print and ask as many questions as possible. Try to avoid signing up online unless you are absolutely sure of the terms and conditions.

You should, however select the online bill-payment option and reminders once you have your new policy. This will keep you aware of any changes that affect your policy and help you to make timely payments. During the year, if you have any questions about your policy, or if you see anything that looks odd, feel free to contact your car insurance provider and raise a few questions.

As the end of your first year draws near, it is important for you to reflect on how this company has treated you and responded to your inquiries. If you feel that they are not meeting your expectations, begin your research again and locate another provider.

Be sure to let your current car insurance company know of your plans to cancel and why. If they want to retain you as a customer, they may make you an offer you cannot refuse. If not, remember to thank them for their time and courtesy and move on.

During your college years, you may need to make several changes and research more than one automobile insurance company before you land the right one. Always know that you have the right to choose and never leave under negative circumstances.

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