Cutting Insurance Costs in College

a group of students study together

Being a young college student (or a parent of a soon-to-be college student) is crazy! Between homework, tests, and the busyness of everyday life, who has time to research student car insurance? So, let us do the legwork for you. We’ll walk you through how to decide if it’s time for separate policies for the family and the student, and we’ll reveal factors that can help lower a young driver’s rate. With this info in hand, you should have no trouble finding cheap car insurance for college students.

Why is car insurance more expensive for students?

When a teen first receives their driver’s license, they may be considered a “high risk” driver right out of the gate. In fact, compared to their parents, teen student drivers are often in a different risk category and have different insurance needs altogether. There are several reasons for this, including the fact that teens are less-experienced drivers with little to no established credit history. Sometimes parents can add their teen to their existing auto insurance policy, but this may not always be the best option. Although it may mean purchasing policies from separate carriers, high-risk car insurance companies often provide a more affordable and effective solution for teen drivers.

Can college students stay on their parents’ car insurance? Should they?

One of the biggest auto insurance questions facing soon-to-be college students and their families is whether it’s time for separate policies or time to remove a child from a policy. Can a college student stay on their parents' coverage? Should they? Here’s a quick breakdown.

Can you stay on your parents’ policy?

It depends. If you’re renting temporary housing but still use your parents’ home as a permanent address, you might be able to. Another major consideration is who holds the title for the car. If the car is in your parents’ names, there’s a good chance you can stay on your family’s policy. However, if the car is in your name, there’s a good chance you’ll need your own car insurance policy.

What if the student isn’t taking a car to college?

If your child isn’t taking a family vehicle to college and they will not be driving, it might be worth checking into whether they need to be listed on your policy. Removing them could save you significant money. However, they will not have any coverage and won’t be able to drive when they come home for breaks.

Is it better to have separate policies with college students in the family?

It all depends on your wants, needs, and premium amounts. Younger drivers are often seen as riskier to insure, and they’ll typically pay more for coverage. So, as a college student, you might not find as affordable of a plan on your own. As a parent, you might not want to pay more than you need to insure your children. They’re becoming independent, and you might feel it’s time for them to purchase their own policy. However, your child might be able to save you significant money if they’re a good student and can score you a discount on your premium. 

The best thing you can do to get clarity on these potential situations is to call your insurer. They can answer any questions and help you do cost comparisons.

5 ways to cut car insurance costs in college

Whether you’re on your own policy or on your parents’ policy, there are some basic factors that shape your auto insurance rates in college. Here are five tips to help you keep your costs low as a young driver.

Rethink your parking situation

Where do you normally park your car overnight? This is what insurance companies like to call your "garaging address." Drivers with garaging addresses in big cities and urban areas tend to pay more for car insurance than those in rural areas for two reasons:

  • Rates of theft and vandalism are often higher in big cities
  • Auto repair and labor costs can be higher

From a car insurance company's perspective, you're also more likely to need your coverage in the city than in the suburbs/country. There are more cars, more people, and greater chances that something could go wrong on the road! If you live in a major city, parking in a secure, covered garage can help prevent theft or vandalism, as well as investing in a car with the latest anti-theft technology. 

Note: If you’ll be parking your vehicle outside, you might want to pay extra for comprehensive coverage. This way you’ll be protected from vandalism, theft, or weather damage. 

Change up your ride

What do you drive? The car you drive plays a major role in determining if you can get cheap car insurance or not. Newer cars and trucks tend to cost more than older ones to insure, along with sports cars with high-performance vehicles.

We know you may not be able to change the car you drive, but it's worth considering. Could you let your mom or dad drive your sports car while you're in school? And you take their fuel-efficient sedan to campus until graduation? If you can, consider going with a safer car with fewer bells and whistles. It'll pay off in cheap car insurance while you're in college!

Build healthy credit

Many car insurance companies now use your credit score or insurance credit score to help determine your risk factor as a driver, and to help ensure that you're not overpaying for your car insurance. However, if you have bad credit or no credit history, you could pay higher premiums for your policy and some companies could choose not to insure you.

Check your credit report to see where you stand. Then, do your best to build strong credit. Pay your bills on time, avoid borrowing the maximum amount on your credit accounts, and don't open a bunch of credit cards and accounts at the same time. This could signal to lenders and others that you're headed for financial distress.

Drive with care

Have you ever gotten into a fender bender, only to see your car insurance premium go up when it's time for renewal? It can happen. If you have a driving record that's filled with serious accidents and traffic violations, you can usually expect to pay more for student car insurance than another student with a clean record and the same amount of driving experience.

Do your best to drive defensively to avoid trouble on the road because safe driving could help you score a discount. Use public transportation and carpool when possible because the less you drive, the fewer chances you have of getting into an accident!

Qualify for a good student discount

The easiest way to save on student car insurance in college? Stay in school and work hard in the classroom! If you have an insurer like Direct Auto that offers a Good Student Discount*, you may qualify if you're unmarried, a full-time student, and maintain a "B" average or better.

Call Direct Auto for student car insurance

Qualify for a Good Student Discount with Direct Auto Insurance, and you could save up to 10% on your car insurance. Even if you don't qualify for this discount, we may be able to help you find other ways to save. Stop by a Direct Auto location near you or call 1-877-463-4732 today to see how affordable student car insurance can be!

*Insurance is produced by Direct Auto Insurance for affiliates in the National General Group, Winston-Salem, NC and is only offered in states where we are licensed to do business. You can find this information on our website: directauto.com. All coverages, features, discounts and pay plans are subject to terms and conditions and may not be available in all companies, states, or distribution channels. Price may vary depending on how you buy

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