College is a time of transition for most students: you’re finally leaving home and will be living on your own. Being independent of your parents brings freedom but also responsibilities, so you’ll have to learn to budget, pay your own bills, and shop for necessities as they arise.
There are some important things you and your family need to consider:
Will you need a car in your new college town? How easy is it ot get around without one? Forget just auto insurance costs – student parking is no joke.
Is it best to stay on your parent’s policy or get your own?
How much insurance should you carry?
We checked with some of the top insurer’s and even with Good Student Discounts (you’d better keep that B average), the cost of car insurance for you as a college student is between $200-$250 a month.
Making the decision
One of the biggest steps towards independence is owning your own vehicle as well as the responsibilities that car ownership entails: not just keeping the gas tank filled but also regular maintenance such as oil changes and tire safety, repairs as they arise, and keeping your auto registration and insurance up to date. Whether you’re just leaving home for college or a current student buying your first vehicle you may be feeling a bit overwhelmed at the last one, because in order to keep your vehicle legally registered you must have insurance.
If you’re like most teens you’ve probably been covered by your parents’ insurance policy when you were living at home, but moving to college means the rules of insurance may have changed. There are a lot of aspects to car insurance that can affect the policy rates and coverage of a student driver living independently and the specific details will largely depend on the state you live in. Here are the main points you should cover when you’re shopping for car insurance as a college student:
Cheapest Cars to Insure for College Students
Car insurance rates can vary widely and one of the biggest factors is the type of vehicle you’re driving. New cars that carry a loan usually require the owner to carry full coverage so the loan company doesn’t lose their collateral if you’re in an accident and the vehicle is totaled.
In 2016 the Honda Accord was the model of vehicle most often reported as stolen
Sports cars are generally more expensive to insure as are the vehicles listed as most often stolen. For example according to USA Today in 2016 the Honda Accord was the model of vehicle most often reported as stolen, followed by the Honda Civic and Ford pickup trucks.
Car shopping? Read here:
If you’re in the process of buying a car your best bet is to narrow your vehicle choices down to four or five and get insurance rate quotes on each. Check with three to five insurance companies to get a good starting point for establishing the range you’ll pay for insurance rates before you decide which car you purchase.
Although it may be tempting to buy an older car to avoid high insurance rates keep in mind older vehicles usually require more maintenance so you may not save in the long run. You won’t be saving if you have your car in the repair shop every other month, and you’ll still have to make your monthly loan and insurance payments whether you’re driving or not.
Your best bet is to consider all factors when purchasing a car:
Initial cost
Monthly loan payment
Estimated monthly insurance rates
Reliability
Safety
Estimated maintenance costs of the model you plan to buy
That way you’ll have a good idea of the whole overall cost of vehicle ownership before you commit to the purchase.
Types of Vehicle Coverage
When it comes to actual insurance it’s a good idea to have an overall understanding of the types of coverage available. Your type of coverage will determine your insurance rates and how much you’ll be paying every month.
Most states have specific requirements for the minimum insurance you need to legally drive your car; because you must have insurance in order to purchase your car registration and license plates you’ll need to have your insurance policy before you can hit the road.
Here’s a brief overview of the most basic types of coverage; check the requirements of the state you live in to find the exact types of coverage you’ll need. Each state has a minimum amount of coverage for each type of insurance they require.
Liability: Liability insurance covers damage to property as well as injuries to others if you’re in an accident.
Uninsured Motorists: Uninsured motorist insurance covers your injuries if you’re in an accident caused by an uninsured driver or in a hit-and-run accident. Uninsured motorist insurance usually only covers personal injuries and does not vehicle or property damage.
Medical: Medical insurance covers injuries that occur in an accident; if you have health insurance this will only cover the part your health insurance doesn’t pay. If you’re covered under your parents’ health insurance or a school policy this coverage will pay for any deductibles and copays your health insurance doesn’t cover.
Collision: Collision insurance covers the cost of damage to your vehicle if you’re in an accident, even if the accident was your fault or caused by a hit-and-run driver.
Comprehensive: Comprehensive insurance covers damage from causes other than a vehicular accident. Examples are theft, hitting an animal, fire, vandalism, and damage from falling objects.
How to Save as a College Student
Again, your best bet on saving is to check with at least three insurance companies before you leave for school or purchase your car. If you’ve been driving while living at home you’re most likely on your parents’ policy; depending on the city and state you’ll be attending school in you may be able to stay on your parents’ policy. This would give you the lowest rates as your parents most likely have multiple discounts. Some states allow students to claim their parents home as their permanent address for insurance, some require you attend school within 150 miles of your parents’ home in order to remain on their policy.
If you plan to have your own policy and keep your vehicle at school your insurance rates will be determined by a combination of factors. Here are the main points that will affect your policy rates:
The crime rate of the area and city in which your college is located:Basically, the higher the crime rate, the higher your policy cost will be – this can sometimes be lowered by purchasing an anti-theft device or alarm.
Your personal driving record:If you have a good driving record you’ll get the best rates. If you’ve gotten tickets for speeding or other moving violations your policy rates will be higher./h3>
Distance traveled:Basically, the more you plan to drive, the more you’ll pay in insurance rates.
Student discounts
Once you have basic estimates from three to five insurance companies on these factors you can go back to each company and see what discounts they can offer you as a college student. These discounts can vary quite a bit from company to company, so don’t cut corners on this part of your insurance homework. Here are some examples of discounts offered by car insurance companies. It’s a good idea to use the list as though you’re interviewing the insurance agent; if she doesn’t offer a specific discount don’t be afraid to ask about it or to mention that another company offers a similar discount.
Good Grade Discount: Most insurance companies will give you a discount if you keep your grades above a certain level; usually there’s a cutoff age of 25. Make sure and ask what verification they’ll require and whether they’ll send you a reminder to submit the information.
Student Away at School Discount: If you’re keeping your vehicle at your parents’ home while attending school you may get a discount if you only plan to use the car on breaks and vacations at home.
Driver Training Discount: That’s right, if you completed a driver training course before you got your license you may receive a discount on your insurance rates!
Safe Driver Discount: If you’ve driven for a certain number of years without a ticket or accident you may get a discounted insurance rate as a reward. Some companies offer a class or program you can take to get this type of discount if you haven’t been driving very long.
Membership Discounts: If you’ve joined a sorority or fraternity you may be eligible for a discount.
Honor Society: If you’ve made the honor roll it could pay off with a discount on your auto rates, too. Check with other student groups to see if there’s an insurance discount available for members.
Associations: Joining some school organizations may make you eligible for an insurance discount. Examples are alumni associations as well as student, college, or university organizations.
Anti-theft devices: If your car has an alarm system or anti-theft device you can usually get a discount on your rate.
Good Credit: Once you get a credit rating established keep it in good order and you can get an insurance rate discount as a reward.
Multiple policies: If you get renters insurance or life insurance you’ll get a discount for having multiple policies with the same company.
College Student Discount Car Insurance
Car insurance companies work with college students in a wide range of ways. They know that students are beginning their transition into independence and they also know you’ll be buying insurance for the rest of adulthood. Most insurance companies try to be flexible with college students purchasing their first insurance policy because the company knows students are usually on tight budgets and the main concern is the rate they’ll have to pay. Here are some ways insurance companies will work with you as a new car owner at college:
Flexible payments: Most companies will allow you to make payments every month, every three months, or pay the entire amount up front.
Optional deductibles: Basically, if you get in an accident you’ll usually have to pay a deductible before the insurance company pays for the damages. Most companies will offer a higher deductible at a lower policy rate.
Discounts: Besides the discounts listed above your insurance company may offer other ways to lower your insurance rate. Make sure to ask each company to check for other discounts before you decide on a company to buy your policy from.
Coverage options: Your insurance estimates should clearly tell you different coverage so you know the bare minimum required to register your vehicle as well as a recommended list of coverage you can afford.
Personal or parental: Each insurance company you get an estimate from should also tell you whether they recommend you put the vehicle title in your name and get individual coverage or whether you’re allowed to put the car in your parents’ name and still drive under their insurance.
Final Tips
If you haven’t bought your car yet check the insurance rates from three to five companies before you buy. Make sure you check the requirements for the state you live in, and if you’ll be attending college out of state check the requirements for that state, too.
Try not to scrimp too much on coverage just to get a lower rate. If you’re not sure about extra types of coverage above and beyond the state minimum ask a parent or other insurance savvy person to help you decide.
Ask for discounts, both when you initially purchase your policy and each time you renew it. This can save a bundle on your monthly rate, so check for special student discounts and keep your grades up to save even more. If you’re renting an apartment ask for a multi-policy discount, too.
Keep your driving record clean. Drive safely, don’t speed, and never get behind the wheel when you’ve been drinking. The longer your driving record is spotless, the cheaper your car insurance will be.
