Auto insurance, Insurance discounts, Student vehicle insurance discount, Best vehicles for students, Saving on vehicle insurance

While you’re searching for scholarships, also put your smarts to use to help save you and/or your family’s finances even more by knowing how to deal with your transportation needs.

 

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This article will provide you with a CliffsNotes of sorts on the best vehicle choices for students, the various ways students are covered by auto insurance — including car insurance for students living away from home — and how to get auto insurance discounts related to your schooling.

 

 

You already have enough information to process transitioning from high school to college, especially during the ongoing coronavirus pandemic. So let’s start accelerating your knowledge base so you’re ready to move forward on your vehicle decisions after reading this article.

 

 

 

The Assignment: the Best Vehicles for College Students

While your vehicle for college may not have all of the cool features that make for optimal driving, be patient: You have a lifetime ahead of you to get all of those bells and whistles. Here’s what you should be looking for now.

 

Factors to Choose Your College Vehicle

Size: You may think small and subcompact is the way to go, but the Insurance Institute for Highway Safety (IIHS) says midsize and large cars are best for young drivers.

 

Why? Given their lack of driving experience, younger drivers are statistically more likely to be in auto accidents. And the IIHS reports that crash fatalities fall as the size of the vehicle increases, so midsize and large vehicles have lower death rates in accidents than small and subcompact vehicles.

 

Safety: Improved safety technology, as well as better vehicle designs, have been attributed to a decline in safety risk, so it’s also a help to a young driver to have a vehicle with high-tech safety features such as forward collision warning, automatic braking, and a blind-spot monitor.

 

These features are in newer vehicles. But if you need to opt for a pre-owned vehicle, at least anti-lock brakes, daytime running lights, and electronic stability control have been around for a few years. 

 

Note: A vehicle safety feature many people don’t realize is their rear-view mirror’s night mode. If you don’t have a fancy rear-view mirror with automatic dimming, just pull the tab at the bottom of the mirror towards you. Night mode cuts out glaring lights when driving at night by darkening most of the reflection. You’ll cut down on the glare and driving distraction.

 

Fuel Efficiency: Be aware of gas mileage, especially if you have a long commute to school, or you’re far away from home. You don’t want to waste money on a gas-guzzler. A vehicle that gets at least 30 mpg (miles per gallon) is classified as good.

 

Note: By not speeding, you’re saving yourself more money at the gas pump. Vehicles are most efficient at speeds from 35 to 60 miles per hour. For every five miles per hour that you drive above 60, it’s like paying an additional 24 cents per gallon for gas, according to the U.S. Department of Energy.

 

Also, if you drive aggressively, you’re hindering your fuel economy. Accelerating quickly from a full stop burns a lot more gas than getting up to speed slowly and steadily. And if you constantly tailgate and have to step on the brakes and then speed up again, you’re also burning more gas. Driving more steadily tends to yield quite a bit of gas savings

 

And driving safe and steady will save you on auto insurance, which we’ll detail later.

 

 

Specific Vehicles for College Drivers

If you’re getting the family car as a hand-me-down for college and it’s among this top ten, you get an A! If they’re offering to buy you a new or pre-owned auto for college, then you already have a handy list of makes and models to start with that looked at horsepower (not too much for inexperienced drivers), size, electronic stability control, and good crash test ratings:

 

a) Subaru Legacy

b) Hyundai Elantra

c) Mazda CX-5

d) Subaru Impreza

e) Toyota Camry

f) Kia Forte

g) Honda Insight

h) Kia Optima

i) Hyundai Sonata

j) Subaru Outback

 

 

If there’s going to be a vehicle purchase, opt for a pre-owned vehicle. In most cases, this will be the best option. For one, buying a new car is more expensive than buying a used car, even if the vehicle is only a few years old. You’ll even save by paying a lower annual registration fee.

 

And the bulk of the vehicle’s depreciation has already occurred, so you’re not losing a double-digit drop in value as soon as you’re driving it off the lot. Also, many late-model used vehicles still have low mileage.

 

Since a used car is cheaper (by up to 50 percent), you may be able to bypass having to finance it, which means you won’t have to deal with the lender’s requirement to have collision and comprehensive auto insurance on it for the life of the loan. 

 

 

Speaking of insurance, let’s explore the options as they relate to college students.

 

 

The Additional Research: Auto Insurance for College Students

Who wants to deal with insurance? It’s not an exciting topic. It’s also not an endearing topic, since it’s based around loss, damage, illness, and death.

 

Also, most people assume it’s complicated and costly. It doesn’t have to be either. If you learn when you’re young that you can put in the time to look for what you want and to advocate for yourself, you’ll save untold thousands of dollars over your lifetime.

 

You’ll get better deals on the proper amounts of insurance for you … not just for auto insurance; you can also carry that through to life insurance, renters or homeowners insurance, health insurance, travel insurance, and business insurance. 

 

So let’s get you acquainted with auto insurance first as you’re launching your college career.

 

Insuring a Student Living at Home

If you’re living at the same address as your parents and you don’t own the vehicle you’re driving to college (or you jointly own it), your assignment is simple: Remain on your parents’ auto insurance plan, as they most likely added you when you started driving in high school. You don’t even have to worry about an age limit.

 

Insuring a Student Living Away from Home

If you’re living away from home while in college full-time and you’re taking a vehicle, you can also usually remain covered on your parents’ auto insurance. This is as long as your primary address is your parents’ residence.

 

If you’re away at school in the same state as your primary address, there should not be any need to adjust your insurance coverage.

 

But if your school is out of state, inform your auto insurer. Each state has its own requirements for auto insurance, so you need to make sure you are adequately covered out of state.

 

While most states require bodily injury liability insurance and property damage liability insurance, those minimums vary. And roughly half of the states require uninsured/underinsured motorist insurance. Some states even require personal injury protection insurance.

 

Also, some states require college students to get their own auto insurance policy, and to register the vehicle they’re driving in that state.

 

For example, Michigan considers having the use of a vehicle for over 30 days makes an out-of-state college student the vehicle’s owner, and they must comply with Michigan’s 30-day auto insurance rule for nonresidents to maintain a valid no-fault auto insurance policy on the vehicle. If they’re driving the vehicle for over 90 days, then they have to obtain Michigan registration for it.

 

And you don’t want to dismiss taking care of this: You can be fined $200-$500 for not meeting this requirement and even be convicted of a misdemeanor. You’ll also be considered uninsured, and there are severe penalties that go along with that.

 

Even for college students not taking a car with them to school, it’s still wise to remain on your parents’ auto insurance. The policy provides protection if a situation occurs in which you end up driving a friend’s vehicle and that vehicle isn’t adequately insured. It also protects you if you’re hit by a vehicle while walking or biking, or when you’re a passenger in someone else’s vehicle.

 

And staying on the auto policy maintains continuous insurance coverage, which can be beneficial when you apply for your own auto insurance.

 

Insuring Yourself Independently

If you want or need to go it on your own with auto insurance, this will be your costliest option — unless you’re a college student over age 25 with a perfect driving record.

 

You’ll need to own your own policy if you own your own vehicle and hold the title. Otherwise, it’s more affordable to just stay on your parents’ policy.

 

Unfortunately, if you’re the typical age of a college student, auto insurance companies see you as high risk. They consider anyone with less than five years of driving experience as high risk.  They don’t have enough of a historical record to make a judgment on whether you’re a safe driver or a reckless one.

 

And young drivers are statistically more likely to engage in dangerous behavior behind the wheel. This includes several types of distracted driving: texting while driving, talking to others in the vehicle, looking for something in the vehicle, looking at directions, putting on makeup, and eating.

 

According to the National Highway Traffic Safety Administration, 11 percent of drivers under the age of 20 who were involved in a fatal auto accident were engaged in distracted behaviors during the crash.

 

Also, young drivers usually have an inadequate credit history, which is one of the factors insurance underwriters use to determine rates in all but three states.

 

This combination of factors contributes to why younger drivers pay up to double or more for auto insurance than drivers in other age groups.

 

So you can get your own auto insurance when you turn 18, but it will be expensive. Since rates can vary quite a bit depending on the insurance company — from $3,000-plus to $10,000-plus per year, and $7,000-plus on average — compare several companies.

 

You may wish to start with Geico, which is known for having the most affordable auto insurance rates for college students. If you’re in ROTC or with a military family, try USAA. Less affordable but also recommended are Allstate for its online and mobile tools, Amica for its coverages, and State Farm for its insurance discounts.

 

We’ll detail discounts in the upcoming section.

 

The Unknown Factor: COVID-19’s Impact

Now that you understand college student auto insurance options, here comes two life lessons: The only constant is change, and nothing is black and white.

 

The coronavirus pandemic is reshaping virtually every aspect of our lives, including college students’ living status. Everything from switching to online learning, attempts at holding classes, and hybrid versions have occurred.

 

So you may have planned to live away from home for school, but you may be back at home, distancing learning. And if you’re still living on campus, your car may just be sitting in its designated lot. With curfews and limitations on indoor activities and group size, you’ve most likely greatly curtailed off-campus activities. You can’t even use your auto to tailgate, since most colleges have banned college football tailgating, or are strongly discouraging it.

 

While updating your auto insurance company may not be at the top of your list, you should contact them about any status changes and seek their advice on options.

 

Plus, if you’re driving less, you may be able to pursue a low-mileage insurance discount. If you’re now driving under 7,500 miles per year, you could be eligible for a savings of anywhere from 5 percent to up to 40 percent. Why keep paying the same rate when you’re not driving as much? You’re decreasing the risk for the insurance company so that savings should be passed on to you.

 

The Extra Credit: Discounts for College Students

Since learning is more effective for college students with interactivity and technology, here’s where college students can really shine — going online to compare insurance companies’ discounts and finding the best ones to save their parents or themselves even more money.

 

The Good Student Discount

There are a lot of reasons why your grade point average (GPA) matters, from pleasing your parents to getting and keeping loans, scholarships, and grants, to applying for your first job after college. But did you know a good GPA can also lower auto insurance rates? 

 

It’s simply called the Good Student Discount, and while details can vary slightly among insurance companies, it typically requires having at least a B (3.0) average, attending college full-time, and being under age 25.

 

The savings are usually 10 to 15 percent. It could jump to 20-35 percent if you’re on the Honor’s List or the Dean’s List. For example, State Farm’s Good Student Discount saves up to 25 percent, and the savings last after you graduate from college, until you turn 25.

 

For this discount, you will need to verify your grades and continue to do so whenever the insurance policy is up for renewal.

 

The Distant Student Discount

Obviously, if you’re a student away from college who leaves the car at home, you’re much less of a risk to insurance companies. Thankfully, most of them reward policyholders for that.

 

It’s called the Distant Student Discount or Student Away at School Discount, and within slight variations, on average a student is eligible if they live a minimum of 100 miles from home, attend college full-time, are aged 24 or younger, and only have access to the vehicle on their parents’ insurance policy when they’re on school breaks.

 

Insurance savings could be up to 35 percent off an auto insurance premium. Some discounts reduce the premium by a fixed amount; others are based on a percentage of the total premium amount for the student.

 

Some insurance companies even offer a “deferred driver” policy modification, allowing a student to be taken off of the policy while away at school, which can save even more money. But they need to be placed back on the policy when they’re home so they’re properly covered.

 

Since requirements on this discount can also differ by carrier (for example, Progressive’s age limit is 22), check with your insurance company. Some companies request proof of attendance at a school far away.

 

Additional Discounts on Auto Insurance

You can also do yourself — or your parents — a financial favor by having auto insurance companies look favorably upon you and reducing your insurance rate by acing these factors:

 

Clean driving record: If your short driving record has few or no accidents and no traffic violations (speeding, running red lights, reckless driving, driving under the influence), you’ll likely get a break on your premium.

 

Drive a less expensive vehicle, which has less of a risk of being stolen, broken into, or having a hefty price tag for repairs, compared to luxury and sports vehicles.

 

Drive a vehicle with safety features since it reduces the chances of an accident and keeps damages to a minimum.

 

If you live within walking distance of your campus and you’re only using your vehicle on weekends or for errands, ask the insurance company about a low-mileage discount. You could save 5 to 10 percent for driving less.

 

Beyond the low-mileage discount, ask if your insurance company offers usage-based insurance (UBI): You can use a mobile app or a plug-in device to measure your mileage and your driving behavior, and your discount rate is based on those measurements. You can save from 5 to 40 percent on your rate if you’re an infrequent and safe driver.

 

And check with your parents to make sure they’re taking advantage of all available auto insurance discounts. While this isn’t a comprehensive list as each insurance company has a varying number of discounts, with most companies having dozens (for example, Liberty Mutual has 38), don’t overlook them since insurance savings can be anywhere from 5 percent to 50 percent off of your rate — per discount:

 

There’s multi-policy (also known as bundling), multi-car, loyalty, homeowner, paperless, automatic payment, accident forgiveness, passive restraint, anti-theft devices, early renewal, green vehicle, new car, defensive driving course, mature driver, retiree, military, occupation, member affiliations, alumni, and garaging. 

 

And if you or your parents are comparing auto insurance companies during this time, additional insurance discounts can include an online quote, online signup, pay in full, and early signup. 

 

Please remember that discounts vary by state, so even if you do see something online, follow up with an insurance agent. 

 

Now go impress your parents, those auto dealers, and auto insurance companies with how smart you already are. Then get back to finding those great scholarships and grants!

Tags: Auto Insurance Best vehicles for students Insurance discounts Saving on vehicle insurance Student vehicle insurance discount

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