Young adults embark on a thrilling and busy phase of their lives immediately following college graduation. This is when they might start their career or buy car insurance independently for the first time. Typically falling within the age bracket of 21 to 25, they are often deemed high-risk due to their youth, resulting in elevated auto insurance costs. Moreover, factors such as limited or nonexistent insurance and credit history further compound their predicament. Hence, it becomes essential for them to consider the following tips to mitigate their insurance premiums, as financial resources are likely to be limited during this juncture.
Searching for auto insurance companies that offer special deals to specific demographics or qualifications can be a time-consuming task. So, our research has identified GEICO as one of the most cost-effective options for recent college graduates, as confirmed by studies that compared quotes from multiple insurance providers. Additionally, Nationwide and State Farm stand out as two other carriers that offer competitively priced insurance for recent graduates. Prices can differ significantly between insurers so it is essential to obtain multiple quotes to compare rates, coverage options, and discounts.
Tips to Find Affordable Car Insurance for College Graduates
While recent college or university graduates may still encounter relatively higher vehicle insurance premiums, it’s worth noting that they have passed the costliest period, which is their teenage years. Consequently, they are likely to notice a greater number of insurance companies willing to provide competitive rates, along with potential access to various discounts. Here are some valuable tips for recent graduates to secure more affordable auto insurance:
- If you’re a recent graduate who has successfully completed college with a strong academic record (achieving grade B or higher) and you’re under the age of 25, certain insurance companies such as State Farm may extend the benefit of a good student discount until you reach the age of 25, even after you’ve obtained your bachelor’s degree.
- In addition, the alumni association members of certain colleges and universities may be able to get lower rates from some insurers. The best way to find out is to check your alumni association website for benefits. Discounts do not always equate to competitive final prices so you should never get one quote and go with it.
- Mileage or usage based vehicle insurance policies are often a good solution for motorists who cannot qualify for many discounts and face adversities. These policies may still take your age, credit score and lack of experience into account but a large portion of premiums are based on your driving patterns or mileage reported by a telematics device installed on your car. So, if you mind your driving or mileage, you can keep your automobile insurance premium low.
- Share policies if possible. For example, Progressive allows even roommates to buy multi-car insurance policies together and qualify for discounts.
- Check with your parents’ insurer for discounts. Some companies offer discounts to the children of their current policyholders even if they don’t live together.
- Buy 6 month car insurance policies as they qualify you for discounts faster.
- Get quotes just after your birthday and switch if you can find better deals. When you are under the age 25, ageing a year may be enough to save you a few hundred dollars on car insurance.
- Choose your automobile carefully. Details of your car can be as important as your own details as a driver, especially when you are still young and considered high risk. Once you have several years of continuous coverage and good driving records, you can upgrade your car.
It’s essential for young adults to shop around and compare vehicle insurance quotes from multiple providers to find the best rates and coverage options for their specific circumstances. Additionally, seeking guidance from an insurance agent or broker can be helpful in navigating the complex world of insurance pricing and policies, especially if this is your first policy.
Do College Graduates Pay Less for Car Insurance?
There is a debated correlation between education level and auto insurance premiums. Some studies suggest that college graduates may receive slightly lower rates, but this does not necessarily imply causation. Auto insurance premiums are influenced by various factors, including driving history, age, credit score, location, and state regulations. The reasons may well be that your college degree allows you to get a better job, earn more, have a better credit history and live in a nicer neighborhood and these factors help you get better rates.
In most states education is an allowed factor in auto insurance premium calculations but California, Hawaii, Massachusetts, New York and Georgia don’t allow insurers to consider education level and occupation when determining premiums. If there are questions about your education when you are getting quotes, it is a clear indication that the company considers education as a factor.
It’s essential to appreciate that there are multiple factors influencing and even if you get lower vehicle insurance rates from some companies in some states for having a college degree, its effect is likely to be small on your overall premium. But having advanced degrees beyond a bachelor’s degree is unlikely to significantly affect rates. Instead of chasing every little discount, it is always a good idea to shop around for auto insurance and compare quotes to find the best rates for your circumstances, as these quotes already include applicable discounts.