The Most Affordable Auto Insurance Options for Recent College Grads

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Car insurance costs are rising quickly. Read on to find out how new grads can lower their premiums. [[{“value”:”

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Recent college graduates often move off of their parent’s car insurance policy and sign up for their own. However, with auto insurance rates up an average of 26% over the past year, finding an affordable policy can be tricky.

Thankfully, some car insurance companies are cheaper for recent college grads than others. Let’s take a look at 10 of the most affordable companies and a few of the most common factors that contribute to how much you pay for insurance.

Most affordable car insurance companies for graduates

Research conducted by The Zebra shows that many insurers offer reasonable insurance rates to recent college graduates. It’s worth mentioning that this list only includes information for college grads who get their own policy, not those who stay on their parents’ policy.

Here are 10 of the most affordable insurance companies for graduates:

Rank Company Average Monthly Cost 1 USAA $144.16 2 GEICO $155.58 3 Nationwide $162.25 4 State Farm $175.91 5 21st Century $184.75 6 Farmers $189.66 7 Progressive $198.66 8 Amica Mutual $209.91 9 Auto Club $215 10 Allstate $257

Data source: The Zebra.

It’s important to mention that if you’re not in the military, a veteran, or have a family member who’s part of the military, you won’t be able to sign up for USAA insurance. This means that for many recent college graduates, GEICO could be the cheapest car insurance option.

What factors contribute to your car insurance rates

Insurance companies use different underwriting processes to set policy rates, so there’s some variation in the rates you’re quoted from competing companies. But in general, insurance companies will consider some details about you, including:

Your driving recordHow often you driveWhere you liveYour ageYour genderWhat car you driveYour credit score

Some companies may consider other factors as well, but these are the most common, according to the Insurance Information Institute.

How to get the cheapest car insurance

Thankfully, there are moves you can make to lower your car insurance rates. Here are some of the most beneficial.

1. Comparison shop

If you’re buying an auto insurance policy for the first time, you may not know that shopping around is one of the best ways to find cheaper car insurance.

A recent Consumer Reports insurance analysis found that 55% of drivers stay with their car insurance company for six years or longer. However, the research showed that when people switch, they usually get a lower rate and are more satisfied with their new insurance company.

2. Bundle your insurance coverage

Bundling your car insurance with a renters insurance policy could save you up to 25% annually on your premiums. Most insurance providers offer a bundling option, making this choice an easy move for graduates looking for cheaper rates.

3. Increase your deductible

When you increase your deductible, you take on more financial responsibility if your car is in an accident. But covering some of these costs by tapping into your savings account could be worth it. Consumer Reports estimates that increasing your deductible from $500 to $1,000 could save you up to 25% on your insurance premiums.

Shopping around for car insurance may not be top of your priority list when you’ve just graduated college. But once you begin setting up your finances and creating a budget, spend a few minutes comparing car insurance quotes online — you’ll likely save money if you do.

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The Ascent does not cover all offers on the market. Editorial content from The Ascent is separate from The Motley Fool editorial content and is created by a different analyst team.Chris Neiger has no position in any of the stocks mentioned. The Motley Fool recommends Progressive. The Motley Fool has a disclosure policy.

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