College students know as well as anyone how expensive it can be to get an education.
Between tuition, room and board, and books, you probably don’t have much room in your budget. But one cost you might not be expecting is car insurance.
Student drivers could end up paying thousands of dollars each year in insurance premiums.
But if you’re looking for ways to save on car insurance, you’ve come to the right place. In this not-so crash course on car insurance, we’ll show you what most people pay and a few ways how smart, responsible college students might be able to save money.
How much is the average car insurance for a college student?
Student drivers can face sky-high insurance rates.
But just how expensive is it?
According to a study by ValuePenguin, college-age drivers pay between $4,000 and $7,000 each year in insurance premiums.
Take a look:
That’s more than some people spend on their first car!
Another way of looking at it? During four years of college, the average student driver will spend nearly $23,000 on car insurance. That’s almost as much as the amount of student loan debt the average student graduates with, according to Student Loan Hero.
Why is car insurance so expensive for college students?
Many auto insurers grade on a curve.
“Teenage drivers represent the highest risk segment of the population and are involved in more serious and fatal accidents than anyone else,” according to the Insurance Information Institute, an insurance industry association.
“From the insurance company’s standpoint, high risk requires a higher insurance premium.”
Even if you’re a responsible driver, you could still end up paying for other people’s bad habits behind the wheel.
“Motor vehicle crashes are the leading cause of death among teens. Immaturity and lack of driving experience are the two main factors leading to the high crash rate among young people,” the Insurance Information Institute reports.
The Insurance Information Institute adds: “Teens’ lack of experience affects their recognition of and response to hazardous situations and results in dangerous practices such as speeding and tailgating.”
How can I get cheaper car insurance?
Just because the average college student pays an outrageous amount for car insurance doesn’t mean you have to.
There are a few ways you might be able to save money.
Keep the family plan
You might be able to stay on your parents’ auto insurance policy when you go to college.
While piggybacking off their positive driving record could bring your rates down a bit, it will probably raise your parents’ rates.
According to the Insurance Information Institute, adding a teenage driver to a family’s auto insurance policy can increase rates by 50 percent to 100 percent.
“Generally, it is cheaper to put a teenage driver on the family policy,” the organization found.
But cheaper doesn’t necessarily mean low-cost.
So what if there was a way to show the insurance company you pose less of a risk than most college students because you’re a safe driver or don’t drive that often?
Could that lower your insurance premiums?
Ask for a discount
Some auto insurers offer discounts to responsible drivers.
For example, Metromile offers discounts for safe driving, including if you haven’t filed a claim in several years. These discounts are on top of what you save with pay per mile when you drive less.
Only pay for the miles you drive
If you don’t get behind the wheel regularly, it might make more sense to get a car insurance policy that charges you by the mile.
Pay-per-mile insurance companies like Metromile only charge you for the miles you actually drive.
The way it works is Metromile customers plug in a secure device in your car that counts how many miles you drive. You’ll pay a base rate that could be as low as $29 per month, plus a few cents for every mile you drive.
So the less you drive, the more you’ll save.
Here’s how much the average driver saves when they switch to Metromile:
7 reasons Metromile can help college students save money on car insurance
The average American drives 13,476 miles per year, according to the U.S. Department of Transportation.
But as a college student, you probably don’t drive nearly as often. So why pay an insurance company for all those miles you don’t drive?
Here are a few reasons why pay-per-mile car insurance might make sense for you:
- You’re taking classes remotely. If you’re living at home during the COVID-19 pandemic, you might not drive as much as you used to. With your spring break road trip canceled and no parties to attend, because of shelter-in-place or stay-at-home orders in your area, your car might start feeling lonely.
- You live on campus. You’re so close you can walk (or bike) to classes.
- You have a short commute. Even though you live off-campus, if you have a short drive to your classes, or take public transportation to school, you probably don’t put many miles on your car.
- You work near campus. Whether you work on campus as part of a work-study program or have a job nearby as a barista at a local coffee shop, unless your employer is 20 miles away, you probably aren’t putting many miles on your car.
- You can’t find parking. If parking spots are hard to come by in your college town, it might be easier to find another way to get around.
- You take rideshare when you go out. If you Uber everywhere, those are miles you’re not putting on your car.
- You’re a freshman. Some schools require first-year students to leave their cars at home, so they can get better acclimated to college life. If your car is parked in your family’s driveway, it’s not racking up miles.
What’s next?
If you’re tired of paying so much for car insurance when you barely drive, you might want to consider switching to a policy that only charges you for the miles you drive.
You can get a free quote from Metromile today to learn more.