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Best Auto Insurance for College Grads (Discounts & More)

Enter your zip code below to view companies that have cheap auto insurance rates.

Jeffrey Johnson graduated summa cum laude from the University of Baltimore School of Law and has worked in legal offices and nonprofits in Maryland, Texas, and North Carolina. He has also earned an MFA in screenwriting from Chapman University and worked in film, education, and publishing. His professional writing has appeared on sites like The Manifest and Vice, and he is the author of a novel ...

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UPDATED: Nov 26, 2021

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Key Takeaways

  • USAA offers the best auto insurance rates for college grads
  • You can combine discounts to lower your rates
  • Your rates depend on your highest degree

If you’re a recent college graduate, you might be getting an individual car insurance policy for the first time. So naturally, this might cause you to wonder how to find a company that provides cheap car insurance.

When comparing companies, you’ll find that USAA offers the cheapest overall coverage, and GEICO has the lowest rates for non-military members. Additionally, you can lower your rates by combining discounts and obtaining the highest possible college degree.

Learning more about the best auto insurance companies for college grads will help you find affordable coverage.

Before learning about the best auto insurance companies for college grads, enter your ZIP code to get free auto insurance rates in your area.

What are the rates from the best auto insurance companies for college grads?

Most people graduate from college between the ages of 22 and 25. This age group has the second-highest car insurance rates behind teenagers. Additionally, many recent college graduates are getting an individual policy for the first time and need affordable coverage.

Comparing rates from the best car insurance companies for college grads will help you find the right fit. The following chart shows the six-month average rates for drivers between 22 and 25 years old by company.

Best Car Insurance Companies for College Grads: Average Six-Month Rates for Drivers Between 22 and 25 Years Old by Company
CompanyAverage 6-Month Car Insurance Rates
Liberty Mutual$1,031
State Farm$1,224
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The average rate for these 10 companies is $977 for a six-month policy. USAA offers the cheapest coverage of these competitors, $319 less than the group average. However, the company only provides coverage to military members, veterans, and their immediate families.

GEICO has the cheapest coverage for non-military drivers. The company’s average six-month rates are $233 less than the group average.

While the cost of auto insurance is often a determining factor, there are other ways to choose a car insurance company. The Insurance Information Institute provides some tips on finding the best car insurance company for you.

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What car insurance discounts are available for college grads?

As previously mentioned, most people graduating college are in their early-to-mid 20s. As a result, these drivers will experience higher rates than older drivers with more experience. Fortunately, several discounts can help lower your rates.

The best way to save money is to know the best discounts. The first of these discounts is the telematics program. These are in-car devices that monitor the way you drive. Companies use these devices to decide what level of risk you present.

The telematics program will monitor several aspects of your driving to determine your habits. Some of these driving aspects include:

  • Braking
  • Acceleration speed
  • Time of day driven
  • Overall speeds

When you graduate college, you’ll either buy or rent a home. You will likely need either renters or homeowners insurance. Bundling your renters or homeowners insurance with your auto coverage provides savings of $149 annually.

Car insurance companies consider someone with a college education more responsible than those who didn’t attend college. Therefore, the higher your degree, the more you’ll save on your auto insurance.

The following chart shows the six-month savings based on your education level.

Best Car Insurance Companies for College Grads: Six-Month Savings Based on Education Level
Education LevelAverage 6-Month Car Insurance Rates
High School$1,159
Bachelor's Degree$966
Master's Degree$812
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In addition to the most common discounts for college grads, there are deals available for all drivers. Some of the saving opportunities from the best affordable car insurance companies for college grads include:

  • Defensive driving
  • Accident-free
  • Safe driver
  • Low mileage
  • Paid in full
  • Anti-theft
  • Anti-lock brakes

Combining as many of these discounts as possible will help you get the lowest rates.

What are some other ways to save on car insurance?

Comparing rates and combining discounts are the easiest ways to save on car insurance. However, there are some other ways that you can lower your rates.

Car insurance companies use various non-driving factors when determining rates. Knowing these factors will help you get the cheapest rates when you’re shopping for the best insurance for college students and grads.

One factor companies use to determine rates is your credit score. On average, someone with a poor credit score (300-579) will pay about $500 more every six months than someone with good credit.

So paying off your school loans on time is a great way to improve your credit score and get better auto insurance rates.

Another factor companies use to determine rates is the amount of coverage. Most lenders require that you carry full coverage until you pay off your loan. However, lessening your coverage when you pay off your car will result in lower rates.

Do car insurance companies allow you to stay on your parents’ or guardians’ plan after you graduate?

Unlike health insurance, you can’t age out of a car insurance policy. However, you must live at the address listed on the policy. For this reason, moving can cause problems if you want to stay on your parents’ or guardians’ plan after you graduate college.

Car insurance is ZIP code specific, and companies price each plan for the garaging address where the vehicle is most of the time. So leaving your parents’ or guardians’ home and taking your car will make you ineligible for their policy.

While you’re in school, your permanent address might still be your parents’ or guardians’ house, allowing you to stay on their plan. But if you move away for a job in another city, your policy will need to reflect your new residence.

However, your parents or guardians can still help you with the payments if they want. Insurance companies don’t care who pays the bills as long as someone makes the payments in full. But you’ll have to be on a separate policy.

What do you need to do when you move?

In addition to changing your address or getting a separate car insurance policy, there are additional steps you need to take when you move away. These steps include updating your driver’s license and vehicle registration information.

You can complete both of these steps at your local DMV and at the same time. To update your driver’s license, you’ll need the following:

  • Identification: This includes your current license and additional forms of ID, like your social security card.
  • Proof of residence at your new address: This usually includes two forms of evidence, like utility bills or some other kind of invoice.
  • Money: The process includes associated fees.

You’ll need similar information to update your vehicle registration information. To update your vehicle registration information, you’ll need the following:

  • Your ID and vehicle information: Driver’s license and VIN.
  • Proof of ownership: Lien statement or vehicle title.
  • Odometer disclosure statement: Legal document that provides accurate mileage on the odometer.
  • Emissions disclosure statement (in some states): Discloses the average emissions of the vehicle.
  • Bill of sale: Document showing the transfer of the vehicle’s ownership.

Your identification, vehicle information, and proof of ownership are always requred. However, requirements for the other documentation vary by state.

Once you’ve updated this information, you’ll need to prove you have car insurance, get the vehicle inspected (if state law requires it), and complete the registration form. Some states allow you to do this online, but others require that you do so in person.

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How do car insurance companies view roommates?

When you graduate college, you might consider living with a roommate or two. It’s cheaper than living alone and will help as you begin to build your career and pay off your student loans.

Companies that provide best car insurance for college graduates understand this decision. However, it causes some concerns that can complicate your coverage. Mainly, the companies worry that you’ll share your vehicle with someone not on your policy.

Auto insurance companies will cover a friend borrowing your car, but when you live with that person it’s a slightly different story. If your roommates have their own car insurance, your company may request proof. Otherwise, they might require you to add your roommate to your policy.

If you plan to share a car to save money, each person who drives it will need to be on the policy. This can affect your rates, especially if your roommate has bad credit or a poor driving record.

However, their are saving opportunities available. For example, you can obtain a multiple-driver discount to lower your rates for having multiple people on your policy.

If your roommates won’t be driving your car, there is no reason to have them on your policy. Additionally, your insurance company might require that you exclude them since they live at your address. To do this, you can call the company and fill out a form that they’ll provide.

Once you exclude drivers from your policy, they can’t drive your car. If they do and get into an accident, the insurance company will refuse to provide coverage.

How can you find cheap car insurance for college grads?

Given your age and financial situation, the cost is likely the most critical car insurance factor. Knowing how to find the cheapest coverage will help you determine the right fit. The following are some tips to find the most cost-effective auto insurance.

  • Compare Quotes: All drivers should compare auto insurance quotes, but it’s even more critical for college graduates because their age increases their rates.
  • Combine Discounts: Combining discounts will help you lower your rates to a more affordable level.
  • Evaluate Your Coverage: Consider your necessary coverage and if it exceeds the value of your car.

Online research will help you find the best auto insurance coverage. However, you should complete these steps before you choose the best car insurance company.

Best Car Insurance Companies for College Grads: The Bottom Line

College graduates likely need to buy a separate car insurance policy. However, purchasing an individual plan for the first time can be complicated. Knowing what to look for and what to avoid will ensure that you get the best coverage for an affordable price.

Learning more about the best car insurance companies for college grads will help you find the best auto insurance for your first separate policy.

Now that you know about the best car insurance companies for college grads, enter your ZIP code to find free auto insurance rates in your area.

Free Auto Insurance Comparison

Enter your zip code below to view companies that have cheap auto insurance rates.

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