Best car insurance discounts for students

Car insurance discounts for students

Nearly all major car insurance companies offer some form of discount for students. The discount options may vary depending on whether the student has their own policy or is listed on someone else’s policy. Discount eligibility and amount may also vary greatly between providers.

Good student discount

Students who earn good grades might qualify for cheaper car insurance through a good student discount, generally reducing total costs by 10 to 25%. This is one of the more common student discounts and usually can apply to students with their own policy or as additional drivers on their parents' policy. Typically, drivers must be full-time students who earn a 3.0 GPA or higher — or the equivalent to a "B" average — and be under a certain age to qualify. Students may need to periodically send a report card or transcript to their insurance company to maintain eligibility.

Driver's training discount

In addition to the good student discount, many insurers offer discounts for completing a defensive driving course. Given that students and young drivers statistically have a higher accident risk, completing this course demonstrates a commitment to safe driving, prompting car insurance providers to offer discounts as a reward. Depending on the contents of your driver's education program, you may already be eligible for this discount, but contacting your provider is likely the fastest way to determine your eligibility.

Distant student discount

Students in college who are living away from home may be eligible for extra savings depending on where they are living and if they have access to a vehicle. Students away at college without their vehicle may earn a distant student discount, considering that their risk of an accident is likely much lower without regular access to a car. Sometimes also known as a “student away at school” discount, many carriers have their own unique eligibility requirements, such as residing over 100 miles away from home or maintaining full-time enrollment status. Again, speaking to your provider will likely be the fastest route to learning whether or not you qualify for this discount.

Affiliation discounts for students

As students head out into the world and become members of organizations and workplaces, they may have more opportunities to save money on their car insurance premiums. An affiliation discount is usually negotiated by a college, business or organization on behalf of its members or employees. Affiliation discounts are typically exclusive and may include special insurance features and perks on top of the discount. Below are some of the more common types of affiliation discounts.

University and alumni

Many larger organizations, including universities, have their own discounts with select insurance carriers. These discounts may be extended only to staff, or they may be more widely available to alumni associations and enrolled students. Check with your university to see what partnerships and alumni discounts they may have with car insurance companies.

Sorority, fraternity and honors societies

Larger sororities, fraternities or societies sometimes have their own negotiated discounts. It seems that Geico advertises these types of discounts the most, but they may be available from other carriers as well.

Military

Students who are also in the military may earn additional discounts. Some auto insurers recognize military members by offering a military discount on their car insurance. Even if a military discount is not offered, reduced coverage and additional savings might be available for vehicles in storage while military members are away from home for extended periods. Some insurers also offer an extra discount for policyholders who are deployed or for those who garage their vehicle on base.

Telematics discounts for students

Telematics programs are becoming increasingly popular with many insurers. These programs use an app or in-car device to monitor your driving habits in real time. You may earn discounts for demonstrating safe driving habits, but note that some carriers may penalize you for poor driving habits with increased premiums. One popular telematics program is State Farm's Steer Clear, which is designed specifically for drivers under the age of 25. It includes a training course that young drivers take to improve their driving skills, and driving hours can be recorded on the mobile app.

The cost of car insurance for college students

One of the most eye-opening stats about young drivers is that the fatal crash rate per miles driven for 16- to 19-year-olds is almost three times the rate for drivers ages 20 and over, according to the IIHS.

This is just one of the many statistics that support the reality that young drivers, including teenagers and college students, are more likely to cause severe car accidents. Many factors can be attributed to this, such as inexperience or distracted driving. But the fact of the matter is that car insurance companies must offset this risk with more expensive car insurance premiums.

Fortunately, students can reduce this financial burden by remaining on their parents' car insurance policy throughout their school years rather than getting a policy of their own.

Below, we’ve compiled average full coverage rate data from Quadrant Information Services for students listed on their parents' policy with good student and driver's training discounts applied to compare against the cost of a student on their own policy. Note that your rates may vary based on your location, carrier and other personal rating factors.

How much can I save with student discounts?

The exact amount students can save using discounts will usually vary by provider. For example, State Farm advertises a good student discount of up to 25%, while Geico caps theirs at 15%. Doing this research prior to purchasing your policy can help ensure you’re maximizing your savings potential.

However, discounts aside for a moment, one of the best ways to lower your car insurance costs as a young driver is to stay on your parents’ policy instead of buying your own. As displayed in the table from the previous section, insurance providers are willing to substantially reduce the price of your premium by remaining on your parents’ policy. In theory, you will potentially have more guidance, more financial backing and better coverage options by staying on your parents’ policy, which makes providing you coverage less risky in the eyes of the insurance provider.

You should remain eligible for inclusion on your parents’ policy if you live at home or are living at college while pursuing your degree.

Cheapest car insurance companies for students

As each company sets its own premiums using proprietary rating algorithms, each also offers its own suite of available discounts with different savings opportunities. Although some companies might have higher overall base rates, they could still be competitive if they provide more young driver discounts than other carriers.

The table below showcases some of the cheapest companies for students listed on their parents’ policy. Although these average full coverage premiums include the good student and driver’s training discounts, it’s important to note that discount availability may vary by state. For a complete list of student discounts from various insurers, you should get in touch with the company directly.

Average cost of car insurance for a student by state

Each state sets its own car insurance minimum requirements and has its own risk factors, so rates may vary considerably based on where you live. For instance, drivers in states that require no-fault insurance tend to pay higher premiums. Additionally, states that are at higher risk for weather-related disasters or have a higher population density (leading to heavier traffic and more accidents) may have higher-than-average rates.

In the table below, you’ll find average full coverage premiums in each state for students of various age groups listed on their parents' policy with student discounts applied.

Other discounts for students 

Students can also save money by utilizing more general discounts that are not as dependent on age or academics. Chances are, you've heard about some of these discounts through those catchy — sometimes annoying — insurance commercials, but we figured that we should share them with you anyway. Here are some of the most popular policy and vehicle discounts available:

• Bundling: Providers will typically offer you a discount on your total premium if you also purchase renters or homeowners insurance alongside your auto insurance policy.
• Safe driver: Insurance companies tend to reward policyholders with a discount for avoiding car accidents and traffic tickets.
• Safety technology: Newer vehicles with accident prevention technology, such as anti-lock brakes and advanced driver assistance systems, can qualify for discounts.
• Safety ratings: Vehicles with higher safety ratings have a better chance of preventing injuries during a car accident, which is highly valued by insurance providers — so much so that they are generally willing to offer a discount.
• Security equipment: Equipping your vehicle with an anti-theft system, or even just routinely parking your vehicle in a secure location, is typically rewarded by insurance providers with a discount.
• Low-mileage discounts: If your driving frequency is low or limited to local routes, you might qualify for a discount based on your annual mileage.

Frequently asked questions

Methodology

Bankrate utilizes Quadrant Information Services to analyze April 2024 rates for all ZIP codes and carriers in all 50 states and Washington, D.C. Rates are weighted based on the population density in each geographic region. Quoted rates are based on a single, 40-year-old male and female driver with a clean driving record, good credit and the following full coverage limits:

• $100,000 bodily injury liability per person
• $300,000 bodily injury liability per accident
• $50,000 property damage liability per accident
• $100,000 uninsured motorist bodily injury per person
• $300,000 uninsured motorist bodily injury per accident
• $500 collision deductible
• $500 comprehensive deductible

To determine minimum coverage limits, Bankrate used minimum coverage that meets each state’s requirements. Our base profile drivers own a 2022 Toyota Camry, commute five days a week and drive 12,000 miles annually.

These are sample rates and should only be used for comparative purposes.

Age: Rates were calculated by evaluating our base profile with the ages 16-21 (base: 40 years) applied. Depending on age, drivers may be a renter or homeowner. Age is not a contributing rating factor in Hawaii and Massachusetts due to state regulations.