How to Get a New Graduate Auto Insurance Discount (2024)

Of the national auto insurance providers, only Liberty Mutual offers a new graduate discount to drivers.

While this discount is rare, there are plenty more ways for college graduates to save money on auto insurance.

Keep reading to learn more about the Liberty Mutual new graduate discount, and discover what other companies and auto insurance discounts can help you earn cheap rates after college.

Before you buy new graduate discount auto insurance, remember to enter your ZIP code into our free tool above to compare quotes from the best providers near you.

What auto insurance companies offer a new graduate discount?

How much is auto insurance for a recent college graduate? The average auto insurance premium for a college graduate is $163 per month or $1,955 annually.

But of the national insurance providers, there’s only one new graduate discount auto insurance company:

• Liberty Mutual Auto Insurance Company – 5%

How do you get a new graduate discount on car insurance? First, you must be a Liberty Mutual customer. If you are, inform your agent about your graduation and ask for the rate reduction.

As long as you graduated in the last 12 months, Liberty Mutual will reduce your premium by 5% for one full policy year.

After that, the discount diminishes by 1% each following year until it’s gone.

However, just because Liberty Mutual offers a discount to recent graduates, it doesn’t guarantee that this company can provide you with your cheapest quotes.

Auto insurance laws vary by state, so this discount may be unavailable where you live.

Also, not every company is active in every region. You could live in a ZIP code where Liberty Mutual does not offer competitive prices, and you may find more affordable auto insurance with another company.

What company provides the best auto insurance for recent college graduates?

Many other factors also go into calculating your auto insurance quotes as well, including your age, driving record, ZIP code, and coverage requirements.

To know for sure which auto insurance company offers the best rates, you’ll need to compare quotes online from multiple providers.

Both USAA Auto Insurance Company and Geico Auto Insurance Company provide drivers under 25 with lower than average rates compared to other national providers.

Note that only military personnel and their families are eligible to use USAA car insurance. Fortunately, other companies offer different discounts that recent college graduates can easily earn, including low-mileage, safe driver, and paperless billing discounts.

What other auto insurance discounts can new graduates earn?

New graduates have the opportunity to earn the same auto insurance discounts as every other driver on the road. The perk is that a few deals are easier for college grads to earn than others. Take a look:

• Good student discount: If you plan to enroll in graduate school, you may still be eligible for this discount through many providers. Just be sure to ask about age requirements.
• Defensive driver discount: If you have a clean driving record, multiple companies will provide you with a rate reduction and lower overall quotes.
• Military discount: If you plan on joining the military, you can earn a discount from a handful of companies, including Geico and USAA.
• Government employee discount: If you end up working for the federal or state government after college, you could earn a rate reduction because of your job.
• Multi-policy discount: Some providers allow you to bundle your auto policy with renters or homeowners insurance, leading to a rate reduction on both policies.
• Low-milage discount: If you drive fewer miles than average each year, you’ll qualify for this discount from participating insurers.

These savings opportunities are relevant to college graduates; however, you don’t need a degree to qualify.

What auto insurance discounts are available to college students? Depending on your age, students are eligible to qualify for most auto insurance discounts, including those listed above.

However, the best options for people still in school include good student and driver’s ed discounts.

What factors affect the cost of auto insurance for college graduates?

The primary factors that affect auto insurance rates for recent college grads include age, credit score, driving record, and where you move to after graduation.

People under age 25 receive higher than average quotes because they don’t have substantial driving histories for providers to base rates on. Statistics also prove that teen drivers cause more accidents than older drivers.

According to the Centers for Disease Control and Prevention (CDC), teens between 16 and 19 are three times more likely to die in a car accident than drivers over age 20.

The typical age of a recent college graduate is 23. Unfortunately, auto insurance rates start to decrease substantially at age 25.

Take a look at the table below to see how age impacts annual auto insurance costs:

Average Annual Auto Insurance Rates for New Graduates by Age

Similar to age, your driving record also impacts your auto insurance rates, especially if you’re a young driver. In the table below, see how just one traffic citation can affect your annual premiums:

Average Annual Auto Insurance Rates for New Graduates by Driving Record

You should try your best to practice proper defensive driving techniques. Not only will it keep you safer on the roads, but it also keeps auto insurance rates for students as low as possible.

Depending on where you live, your credit score might impact your auto insurance rates. Take a look at the table below to see how credit impacts your annual auto insurance rates:

Average Annual Auto Insurance Rates for New Graduates by Credit Score

If you have to repay any college loans, making your payments on time each month is a great way to start building your credit. Deferring your loans will hurt your credit score and possibly raise your auto insurance rates.

However, it’s illegal to use non-driving factors like credit score, gender, and ZIP code in some states, so shop around for quotes from local auto insurance companies to see how your credit score impacts your rates.

Finally, if you move after graduating college, you’ll need to invest in new coverage to meet the requirements of your new state. You should also be prepared to register your vehicle and update your license.

Do not cancel your current auto insurance before securing a new policy. Otherwise, you risk a coverage lapse, which could cause your rates to go up.

How much auto insurance do new graduates need?

What is the best auto insurance for a recent college grad? Legally, you must carry at least your state’s minimum auto insurance limits. Therefore, where you live heavily influences the types of auto insurance coverage you must purchase.

You should familiarize yourself with the auto insurance requirements where you live before you buy new graduate auto insurance.

Most states require liability insurance, and there are two types you usually must invest in:

• Bodily injury liability: Covers the damages to the other driver in an accident you cause
• Property damage liability: Covers the cost of damage to the other party’s property

Often, a liability-only policy doesn’t offer enough protection for the average driver. Consider adding the following different types of auto insurance coverage to your policy:

• Collision insurance: Covers the cost of damage to your vehicle for an accident while in motion, regardless of fault. There is usually a deductible.
• Comprehensive insurance: Pays for damages to your vehicle when not in motion, including theft, vandalism, and acts of nature. There is usually a deductible.
• Uninsured/underinsured motorist protection: Covers the cost of repairing your vehicle if the at-fault driver is uninsured or carries too little coverage.
• Personal injury protection (PIP): Often required in no-fault states, PIP coverage pays for your medical bills and lost wages due to an accident, regardless of fault.

Take some time to find your state in the table below and determine your minimum requirements:

Minimum Auto Insurance Requirements by State

Now you’re ready to research the level of coverage you require that fits your budget and your state auto insurance laws.

Afterward, compare quotes from multiple insurers online to determine what company is best for you.

How can new graduates save on auto insurance?

New graduates can save on auto insurance in other ways besides simply earning a new graduate car insurance discount.

If you’re an excellent driver who uses your vehicle less than average, you might consider a telematics program or pay-per-mile auto insurance instead of traditional coverage.

Telematics, also called usage-based auto insurance, tracks your driving habits using a small device or mobile app.

Usually, the driving habits include hard-braking events, acceleration speed, time of day, and how far you drive.

Pay-per-mile programs also rely on devices or mobile apps but usually only track your mileage.

Some companies offer discounts for bundling your renters and homeowners insurance with your auto policy if you own a home or rent an apartment.

A lot of recent grads also wonder, can you stay on your parents’ insurance plan?

Fortunately, unlike health insurance, you can remain a named driver on their plan regardless of age. This is a great way to keep your rates low.

However, if you move away from home, you might want to consider getting a separate policy. Remember, ZIP code impacts auto insurance rates.

If you live away from home, should you add your roommate to your auto insurance policy?

Yes, if they drive your vehicle often. You can add them as a named driver to your policy. You could even earn a multiple drivers discount, but know that their driving history and age can impact the policy’s price if you add them as a named driver.

However, without naming them on your policy, you risk paying out of pocket if they get into an accident while driving your car. Auto insurance companies consider this a breach of your contract, and your policy will not cover any damages.

Can college graduates get a discount on new cars?

Many car manufacturers offer special rates on new vehicles for recent college graduates.

To qualify for rebates on new vehicles, you usually must:

• Show proof of graduation within the last two years or in the next six months
• Maintain a decent credit score
• Show proof of employment

The car brands with the best discounts for college students and graduates are Toyota and Ford. Toyota’s college graduate program offers a $500 to $1,000 rebate for new grads on the vehicle of their choice.

Financial experts also often recommend the Ford college student purchase program.

College grad new car discounts are also available through Acura, BMW, GM, Honda, Hyundai, Lexus, and more.

College students usually have no problem getting the best price on a car. To help keep your insurance rates low, choose a reliable vehicle with excellent safety ratings and reviews.

New Graduate Discount on Auto Insurance: The Bottom Line

Ultimately, the new graduate auto insurance discount from Liberty Mutual might be perfect for some recent grads, but most people are better off shopping around for coverage elsewhere.

Depending on their age, college students may have a more challenging time securing cheap auto insurance than recent graduates.

New graduates should consider comparing quotes once a year to ensure you’re paying your lowest rates. This is especially important once you turn 25, as your premiums should decrease dramatically at that time.

Now that you’ve compared affordable new graduate discount auto insurance rates from national companies, start comparing quotes from the best companies in your region by entering your ZIP code into our free tool below.