Adding a young driver to your car insurance policy can increase costs even higher than if you got into an accident, picked up a speeding ticket or got arrested for drunk driving. Parents can expect to pay double or more for car insurance after adding a young driver to their policy.
We analyzed rates from more than 147 auto insurance companies and found an average increase of $1,830 a year for adding a young driver. Car insurance rates typically don’t start to go down until age 25. But if your child gets good grades, you may be able to reduce your car insurance bill right away.
Best Student Discounts for Car Insurance
The best student discounts for car insurance are the good student discount and student away from home discount.
Good student discount
What’s a good student? The qualification rules vary by company, but generally you earn a discount if a student is within a certain age range, enrolled full-time in high school or college and is recognized for good grades or other scholastic achievements.
For example, Nationwide requires a student to be between the age of 16 to 24, enrolled full-time in high school or college and maintain a minimum of a B average. You have to show proof of academic achievement with a current report card or a form signed by a school administrator.
A solid letter grade isn’t the only path to a good student discount. Some insurers offer multiple ways to prove academic success. For example, Geico offers discounts for full-time students between age of 16 to 24 who achieve one of the following:
- Rank scholastically among the upper 20% of their class
- Have a grade average of B (for schools that designate grades by letter)
- Have an average of three points for all subjects combined (for schools that designated grade by points)
- Were included in a list for scholastic achievement, such as a dean’s list, honor roll or comparable listing
- Ranked in the upper 20% of a national standardized test within the past 12 months, such as the PSAT, PACT, SAT-I, ACT, Iowa Test of Basic Skills, California Achievement Test or TAP
A good student discount can shave a decent chunk off your car insurance premium, depending on your state and car insurance company. The average good student discount is 4%. Here is the average good student discount by company.
Average good student discount by company
| Company | Average good student discount in dollars | Average good student discount by percentage |
|---|---|---|
|
$378
|
5%
|
|
|
$345
|
8%
|
|
|
$304
|
5%
|
|
|
$299
|
7%
|
|
|
$282
|
7%
|
|
|
$232
|
5%
|
|
|
$205
|
4%
|
|
|
$179
|
4%
|
|
|
$170
|
5%
|
|
|
$163
|
4%
|
|
|
$113
|
3%
|
|
|
USAA*
|
$83
|
3%
|
*USAA is available only to military members, veterans and their immediate family members
Student away from home discount
The “away at school” discount takes effect when a young driver is away at school and not using the vehicle. Car insurers consider this situation a lower risk than if the young driver was driving the vehicle at home. Insurance companies often offer car insurance discounts in these instances.
This discount is sometimes called a “distant student discount” or a “resident student discount.” To qualify, you generally need to meet a few requirements. For example, we analyzed a State Farm policy where drivers under age 25 are eligible for a student away at school discount if they meet the following qualifications:
- Resides at school more than 100 miles from home.
- Only drives the car when home during school vacations or holiday periods.
- The car stays at home while the student is away at school.
The State Farm “student away at school” discount expires when they complete their schooling and do not intend to return to school or reach age 25.
The average away at school discount is 8%. Here’s a look at the average away at school discounts by company.
Average student away at school discount by company
| Company | Average away at school discount in dollars | Average away at school discount by percentage |
|---|---|---|
|
$775
|
16%
|
|
|
$725
|
20%
|
|
|
$642
|
16%
|
|
|
$621
|
16%
|
|
|
$606
|
14%
|
|
|
$282
|
6%
|
|
|
$275
|
4%
|
|
|
USAA*
|
$266
|
10%
|
|
$195
|
5%
|
|
|
$148
|
4%
|
|
|
$141
|
4%
|
|
|
$106
|
3%
|
|
|
$64
|
1%
|
*USAA is available only to military members, veterans and their immediate family members
Other Types of Student Car Insurance Discounts
Besides, good student and student away at school discounts, other student discounts include student affiliation and driving training program discounts.
| Type of discount | How do you save? |
|---|---|
|
Student affiliation discount
|
Similar to membership discounts, you can save if your insurer offers a discount for being a student at specific colleges.
|
|
Driver training program discount
|
Enrolling your child in an approved program can lead to lower rates since insurers view these programs as helping inexperienced drivers lower their risk.
|
Driver training program qualifications for that discount vary by state and company. For example, we analyzed a Travelers car insurance policy that offered a driver training discount for those under age 21 who successfully complete a driver education course that meets state-mandated requirements.
Some insurers offer programs that help teen drivers. For example, the State Farm Steer Clear discount is available to drivers under age 25 who had no at-fault accidents or moving violations in the past three years. To earn a program certificate and discount, drivers must complete five training modules (including lessons, videos, driving scenarios and quizzes) as well as five hours of driving in at least 10 trips.
Before taking a driver’s education course, it’s a good idea to contact your insurance agent to discuss what driver training discounts are available.
How to Save on Car Insurance for Students
Student discounts are one way to save when you add a young driver to your policy. But it’s not the only way to save. Here are some tips to help you find cheap car insurance for teens.
Shop around for quotes
The best way to find a good price is to compare car insurance quotes from several insurers. You can get free quotes online or by working with an independent car insurance agent.
Ask about other discounts
Car insurance offers many types of discounts that go beyond a young driver. Other ways to save include multi-policy discounts (such as bundling auto and home insurance), vehicle anti-theft devices, paying in full, paperless billing and paying via an electronic funds transfer (EFT).
How much you may save through discounts varies, but our analysis found that bundling policies is often the way to save the most. A bundling discount can be 6% to 23%, based on Forbes Advisor’s analysis.
Ask your insurance company or agent about car insurance discounts and make sure you maximize as many savings as you can.
Get good grades
The average good student discount is 4%, which can help offset the significant car insurance rate increase you can expect when you add a young driver.
What an insurance company considers a “good student” varies, but can be an excellent way to shave money off your car insurance costs.
Avoid driving an expensive car when you’re young
Insurance companies factor in a vehicle’s value when setting rates. Putting a young driver onto a less expensive car is one way to get cheaper car insurance costs. Here’s a guide to the most and least expensive cars to insure.
Add a driver to an existing policy
A young driver getting their own car insurance policy will likely cost more than a parent adding them to an existing policy. An inexperienced driver on their own policy is risky for a car insurance company while being added to an existing policy with experienced drivers is considered lower risk.
For instance, the average car insurance cost for young drivers with their own policy is $5,725, while adding a young driver to a policy costs $1,830, on average.
Practice good driving
Some insurance companies have features aimed at reducing parent anxiety about teen driving, such as driver training programs and mobile apps that score teen driving behavior.
Being accident- and claims-free saves money from your car insurance policy. That goes whether you’re a new or an experienced driver.
Best Car Insurance Companies 2024
With so many choices for car insurance companies, it can be hard to know where to start to find the right car insurance. We've evaluated insurers to find the best car insurance companies, so you don't have to.
Methodology
We used data from Quadrant Information Services. Average rates are based on a policy with 100/300/100 coverage ($100,000 bodily injury liability per person, $300,000 bodily injury liability coverage per accident, $100,000 for property damage liability), plus collision and comprehensive coverage with a $500 deductible. Average rates assume good drivers on the policy with no accidents or tickets.
Student Car Insurance Discounts FAQ
What requirements are needed to obtain student discounts?
Student car insurance discounts typically require a minimum grade level, but some car insurance companies offer other ways to get savings, too.
For instance, Geico offers a good student discount if the student is in the upper 20% of their class, ranked in the upper 20% of a national standardized test within the past year, acquires a minimum 3.0 grade point average or achieves the dean’s list, honor roll or a similar list.
What car insurance discounts can students use?
Common types of car insurance discounts for students include good student discounts, student away from home discounts and enrolling your student in an approved driver training program.
How much you may save varies by company and state, but you could shave hundreds off your car insurance policy with these discounts.
What GPA is needed for a good student discount?
Car insurance companies may offer a good student discount if you’ve achieved a 3.0 grade point average. The exact requirement varies by company.
For instance, Nationwide doesn’t require a specific GPA. It instead offers car insurance discounts for a minimum B average. Ask your insurance company for their good student requirements to understand exactly what’s needed.
