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Whether you're planning to get behind the wheel with your learner's permit or new license, you must first obtain auto insurance. While the cost of coverage for young drivers can cause sticker shock, a good student discount can help you save—if you're eligible. Here's what you need to know about qualifying for a good student discount and how much it can reduce your auto insurance rate.
What Is a Good Student Discount on Car Insurance?
Teens and young adults generally pay more for car insurance, on average, than any other age group. Their lack of experience and tendency to engage in risky behaviors like speeding or texting while driving translates into a higher rate of accidents when they get behind the wheel. According to the Centers for Disease Control and Prevention, teens 16 to 19 years of age are the most likely age group to be involved in a car accident. Insurers charge more for the added risk.
There's good news and bad news when it comes to how your age impacts premium costs, however.
- The good news: High premiums don't last forever—as long as you maintain a clean driving record.
- The bad news: It'll take a few years to see a significant decrease in your premium based on your age.
In the meantime, there are other ways to save. One way young drivers can reduce the cost of car insurance is by qualifying for a good student discount. Some insurance companies view students who earn good grades as more responsible and reward them with reduced auto insurance premiums.
How Much Is a Good Student Discount?
The extent of the discount you may receive varies by insurer but generally ranges from 10% to 25% of the premium. Because insurance companies offer different rates and discounts, it's best to shop around to see where you can get the best deal.
Who Qualifies for a Good Student Discount on Car Insurance?
The criteria insurers use to determine who qualifies for a good student discount varies by company, but you generally need to:
- Meet the age requirements. Different insurers have different age cut-offs, but you typically need to be between 16 and 24 to qualify for a good student discount.
- Be a full-time student. Full-time high school and college students are usually eligible.
- Maintain a minimum grade-point average (GPA). Insurance companies typically require students to maintain at least a "B" average, or 3.0 GPA, to earn the discount.
How to Get a Good Student Discount on Car Insurance
If you qualify, you can get a good student discount by following these steps.
- Contact your insurer or insurance agent. You can usually do this by phone or email.
- Show proof. You typically need to give the insurance company a copy of your report card or transcript verifying your GPA.
- Purchase coverage. Choose the types of car insurance coverage you want to purchase and select your policy limits.
- Get the discount. Your insurer will apply the good student discount to your policy.
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Other Ways to Save on Car Insurance
A good student discount isn't the only way to save on coverage. Here are some other things you can do to lower your car insurance costs.
- Stay on your parent's policy. Remaining on your parent's policy for as long as you're eligible is almost always cheaper than purchasing a separate policy.
- Ask about other discounts. Insurance companies typically offer many discounts. Some, like the distant student discount, are meant specifically for students. Others, such as multi-policy, autopay, paperless billing and more, apply to everyone. Check with your insurer to make sure they apply all relevant discounts to your premium.
- Improve your credit. Paying your bills on time isn't only important if you need a loan. It may also affect your auto insurance rates. Most states allow insurers to consider credit-based insurance scores in their rate calculations, and people with higher scores generally qualify for lower rates.
- Take a class. Some insurance companies offer discounts to drivers who take a driver's education course.
- Increase your deductible. Policies with higher deductibles typically cost less than policies with lower deductibles. However, when you opt for a higher deductible, you have to pay more upfront if you need to file a claim. It's important to consider the potential out-of-pocket costs with the savings on your policy.
- Stay safe. Drivers with clean records pay less for coverage than drivers with a history of moving violations. Maintaining a clean record can help you save. Some insurers also offer discounts to drivers with vehicles that have certain safety features and higher vehicle safety ratings.
- Drive less. One of the factors insurance companies consider when deciding rates is how much you drive. Drivers who spend less time on the road typically get lower rates than road warriors. You may also want to consider pay-per-mile car insurance to help you save.
- Shop around. Because every provider has its own proprietary method for calculating premiums, rates can vary significantly between insurers. Comparing car insurance rates can help you get the lowest premium you qualify for.
The Bottom Line
Making the honor roll won't just get you a sticker to put on your bumper. It can also help you snag a lower rate on your auto insurance. You won't get rock-bottom rates as a young driver, but combining a good student discount with other saving strategies can help you get more affordable coverage. Experian's car insurance comparison tool can help you find a policy that meets your needs at a price that fits your budget.