How To Get Car Insurance Discounts if You’re a Recent College Grad

Although car insurance is generally more expensive for drivers in their 20s than for older drivers, recent college graduates may be able to lower their prices by taking advantage of various auto insurance discount opportunities such as bundling their policies or signing up for a telematics program.

Keep reading to learn more about car insurance for graduates such as how much you’ll typically have to pay for your own car insurance policy and what factors can impact the cost of coverage.

On This Page

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  How Much Is Car Insurance for College Graduates?

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  Can Being a College Student Impact Your Car Insurance Rates?

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  Do Car Insurance Companies Offer Discounts to Recent College Grads?

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  Which Car Insurance Companies Are the Best for College Graduates?

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  What Other Discounts Are Available for Students?

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  FAQs

How Much Is Car Insurance for College Graduates?

According to SmartFinancial’s in-house data, the average cost of car insurance as of May 2024 ranges from $192.82 to $233.58 per month for drivers between the ages of 22 and 25, which is around the age range when many students finish college. In general, young and inexperienced drivers are riskier to insure and tend to face higher car insurance premiums, so your rates will likely get steadily lower over time before going up again around the age of 75.^[1]

Keep in mind that various external factors can affect your auto insurance rates after you graduate from college such as new driving habits related to work. For example, you will likely pay less for coverage if you get a work-from-home job than if you get a job that requires a lengthy commute.

Can Being a College Student Impact Your Car Insurance Rates?

Being a college student can impact your car insurance rates in both positive and negative ways depending on the circumstances. Several insurance carriers offer discounts that specifically apply while you are in school, meaning the discounts may fade and your premiums could go up at the first policy renewal after you graduate.

Meanwhile, insurance companies in many states use a credit-based insurance score to calculate how much you should have to pay for a college student car insurance policy. As a result, a drop in your credit score triggered by a missed student loan payment can cause your car insurance prices to go up.

Another relevant factor is whether you stay in state for college or move out of state. Different states have different car insurance requirements, meaning you may need to buy more coverage or may be able to purchase a new auto insurance policy with less coverage depending on where you move.

Additionally, auto insurance premiums depend heavily on your location, so moving for school has the potential to raise or lower your premiums depending on the various risk factors associated with where your college is located and where you lived before college.

Do Car Insurance Companies Offer Discounts to Recent College Grads?

While auto insurance companies generally don’t offer specific car insurance discounts for college graduates, some insurers take your level of education into account when setting your car insurance premiums, which means you could be offered lower rates as soon as you finish your degree.^[2]

In addition, even though they aren’t exclusively for recent graduates, there are several other discounts offered by many insurance providers that new grads may be eligible for such as the following:

• Bundling: If you buy car insurance from the same company you get homeowners or renters insurance from, you may be eligible for a bundling discount.
• Telematics: Your auto insurer may offer you a discount based on your driving habits as measured by a telematics device or app if you sign up for a pay-per-mile car insurance program. You should note that enrolling in a telematics program can be a double-edged sword; while it can lead to lower rates if you drive infrequently and practice safe driving behaviors, it could instead cause your rates to go up if you drive frequently or have a tendency to engage in risky driving practices like speeding or braking sharply.
• Multi-car: If you still live with your parents after college, you may be able to stay on their car insurance policy and the policy may be eligible for a multi-car discount, meaning your share of the car insurance bill will be lower.
• Organization: Some car insurance companies offer discounts to all of the members of a certain organization. You may be eligible based on the company you work for or your university’s alumni association.
• Anti-theft: Installing an anti-theft device into your vehicle such as a kill switch or car alarm lowers your exposure to car theft and may be rewarded with a discount from your car insurance company.
• Safe driving: Several insurers also offer discounts to people who maintain a clean driving record or participate in programs designed to help them become better drivers. For example, State Farm’s Steer Clear program provides discounts for drivers under the age of 25 who have gone at least three years with no at-fault accidents or moving violations and have completed a driving-focused training course.^[3]

Which Car Insurance Companies Are the Best for College Graduates?

SmartFinancial’s in-house data shows that major insurers like Allstate, Farmers, State Farm, Travelers and USAA tend to offer auto insurance to 22-to-25-year-old drivers at below-average prices, making them among the cheapest car insurance companies for drivers who have just finished college. Keep in mind that you cannot purchase coverage from USAA unless you are an active or retired military service member or are closely related to one.

You may also be able to get cheap car insurance from insurers that offer lower rates to people with a higher level of education like GEICO and Liberty Mutual.^[2]

What Other Discounts Are Available for Students?

Many insurance companies offer discounts designed to help make coverage more affordable for college students. For example, Liberty Mutual offers a good student discount for students with a B average or better and a student-away-from-home discount for parents whose children are away at school and don’t regularly drive their cars.^[4]

Specialized discounts may also be available for younger students. For example, teenagers in several states who are covered by an Allstate policy can earn a discount by participating in the teenSMART driver safety education program, although they will have to pay around $70 up front to participate in the program.^[5]