Ways to Save Money on College Student Auto Insurance

You’ve been accepted to the university of your dreams, your dorm kit is in the trunk and your sights are set on Phi Beta Kappa. But before you drive away, there’s one more thing you need to think about: car insurance!

Yeah, that’s right. Before you rush a sorority or join a club, you need to think about your college student auto insurance needs. Are you going to be driving? Are you living on campus or commuting? Are you staying in state? Do you plan on getting good grades or partying till dawn? (The first—please.)

All these things and more will play a part in what kind of car insurance you need and how much it’ll run you.

How Much Does Auto Insurance Cost as a College Student?

Because students are young, car insurance for college students is always a lot more expensive than policies for more mature drivers. Teens and young people tend to make worse decisions and take more risks when driving (like texting or speeding), so insurance companies view them as a higher risk (aka more likely to get in a crash and file a claim). In fact, 18- and 19-year-old students face the highest risk of getting in an accident than they will ever again.¹

Premiums can range from a little more than $2,500 a year all the way to over $7,000 depending on your personal details and where you buy your car insurance. Talking to an independent insurance agent is a good way to make sure you get the best deal.

Can a College Student Stay on Their Parents’ Auto Insurance Policy?

Pretty much the best way to save money on auto insurance as a college student is to stay on your parents’ policy—you can usually save 60–70% this way according to Zander Insurance. You might be thinking, Great, sign me up! But hold on—not every student qualifies to stay on old Dad’s policy.

Basically, it comes down to where your primary residence is.

The easiest way students stay on their parents’ auto insurance policy is by living at their parents’ address. Yeah—no frat house, and no college dorm that hasn’t seen a vacuum in three semesters. There are a lot of good reasons to commute to college and this is just one of them (the insurance savings, that is—although avoiding a frat house also sounds nice).

If you’re really dying for that dirty dorm experience, you could also qualify if you list your parents’ address as your primary residence even though you’re living at school. This move has to be temporary though. And not every insurer is cool with this arrangement, so make sure to check.

Another way to stay on your parents’ policy is if you don’t drive at all while living at school. This would work if you chose a university in a big city with good public transportation. And by staying on your parents’ policy, you’d be able to drive when you return home on holidays and avoid a lapse in coverage (which could drive up your premiums later).

Keep in mind, moving permanently immediately disqualifies you from staying on your parents’ auto insurance. You can’t stay on your parents’ policy if your permanent address is different from your parents.

Pros and Cons of Staying on Your Parents’ Auto Insurance Policy

Pros	Cons
Save more money	We couldn’t find any
Can live at home or at school
Can share cars
More convenient (For your parents. One insurance policy is hard enough to manage—who needs two?)

Thankfully, there’s no age limit for how long you can stay on your parents’ insurance, so if you decide to go back to school at 28, you can still save that cash and put it toward your master’s in puppet arts (but we can’t guarantee your parents will be on board).

Money-Saving Tips for College Student Auto Insurance

The college price tag is already high and keeps getting higher. No parent or student needs to pay more than they have to for auto insurance too. Let’s go over the do’s and don’ts of saving on college student auto insurance.

Look for discounts.

We’ll go over these in detail in a minute, but there are a few out there just for students and parents of students, so don’t skip this!

Compare quotes.

Always shop around when you’re looking for car insurance for a college student. The more quotes you get, the more likely you are to find a cheaper option. The easiest way to make sure you’ve got the best deal in town is to use an independent insurance agent. They’ll do all the shopping and bring you the goods.

Consider pay-per-mile or usage-based insurance.

If you’ll be living at college but only plan on driving occasionally, a good option could be pay-per-mile insurance. Insurers will track your mileage and bill you for every mile you drive. You’ll also have to pay a base rate too. Typically, the minimum base rate is $30 a month.

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With usage-based insurance, the company will use a telematics device to track your driving. It’ll record things like hard braking, your mileage, and what time of day you drive and give you a discount if you qualify (many companies offer discounts up to 15%). This is only a good idea of you’re a really good driver—if not, it could backfire and make your premiums go up.

Pause your policy.

If you plan to relocate without your car for a summer internship or study abroad trip, you can save money by switching over to storage coverage. This kind of protection is basically just comprehensive coverage (protection from vandalism, weather and theft).

Because this coverage doesn’t include liability, your car will have to stay parked. You should also check state laws around owning a registered vehicle without liability insurance. Some states don’t allow you to keep the registration and tags if you don’t have liability coverage.

Tell your insurer your situation.

This tip is more for the parents: You can look into removing your student from your policy if they’re only going to drive during summer and winter break. When they come back to fill up on Christmas ham or summer sun, you can add them back on. Not all companies allow this move though—check with your insurer to make sure they’re good with this.

Don’t get temporary auto insurance.

Temporary car insurance really isn’t a thing. If you do see it offered, it’s probably a scam—reputable insurers don’t offer it. If you find yourself needing coverage for just a few weeks or a month, you can pay for a six-month policy, then cancel it when you’re not driving anymore. The company should reimburse you for the portion you didn’t use.

Don’t let your coverage lapse.

Letting your coverage lapse as a student can result in higher rates later when you go to get insurance again. But if you’re a parent, you might need to take your kid off your policy. It’s not the end of the world, and it may save you enough money to be worth it. Just make sure it’s actually your best option.

Don’t drive uninsured.

Even if it’s just for five days at Thanksgiving, driving without insurance is not a good idea—and it’s also illegal. Talk with an independent insurance agent to find your cheapest option instead.

Discounts on College Student Auto Insurance

While car insurance for college students just is going to cost more, you can take the edge off with these discounts.

Defensive driver discount

Shave off a few dollars by taking a defensive driving course. Many insurers offer a discount for this, but check with your company first to make sure they do—and that the course you have your eye on qualifies.

Good student discount

Many insurers offer a discount if you keep your grades up. What are good grades? Good question. Usually, getting B’s and up or staying in the top 20% of your class will get you the discount. (See? One more reason to pay attention during lectures.)

Grades aren’t necessarily the only way to prove your smarts. Some insurers accept academic awards and scholastic achievements like making the dean’s list, president’s list or honor roll. If you haven’t started classes yet, your score from a national standardized test could get you a discount if you ranked in the top 20%.

Don’t just go with the biggest discount you can find though. It could be that another company with a smaller good student discount is still the cheapest option overall.

Away-at-school discount

Here’s one for parents looking to keep their kid on their policy: Some insurance companies give a “student away from home” discount if your kid isn’t driving and lives at a university more than 100 miles away. You’ll probably have to provide proof that they’re living away from home, like a severed thumb or utility bill. (Just kidding about the severed thumb—thumbs don’t prove residency. But we’re glad to see you’re paying attention.)

Bundling discount

No, this isn’t just for students who freeze their butts off attending University of North Dakota. It actually has nothing to do with bundling up in coats and scarves. It has everything to do with bundling up your car policy and another policy! If you can buy insurance for two or more things (like car and renters insurance or even a car and another car) from the same company, you can usually get a discount.

Anti-theft device discount

University parking lots and garages are notorious for car thefts. Just Google cars stolen at universities and the results should be enough to convince you getting an anti-theft device is a good idea. Insurance companies will often give a discount if you install devices like a remote disabling system, a GPS tracker or even an alarm. Some states even require insurance companies to offer this kind of discount.

It’s Not All About Saving

It feels good to save money—but what feels even better is knowing your kid is covered. While you try to sort out the cheapest option for your college student’s car insurance, remember to also make sure they’re getting all the coverage they need. After all, this is your kid, and at this age they’re more likely than anyone else to get into a fatal car crash.²

Connect With an Auto Insurance Pro

There’s a lot to think about and do as your kid heads off to college—whether they’re moving a thousand miles away or commuting to a local school. Sorting through auto insurance quotes for your student doesn’t have to be one of them.

Pass the legwork off to a RamseyTrusted insurance pro today—it’s not cheating, it’s being smart. And it’ll give you more time to spend with your kid before they get buried under a pile of textbooks.

Talk with an independent insurance pro today!

Frequently Asked Questions