Is Car Insurance Higher if the Car Is Put in a Student's Name?

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    Identification

    • The factors car insurance companies use to assess risk do not, in general, favor your status as a student. In most cases these factors work together to make the cost of car insurance higher when the car is in a student's name. For example, if you are between 16 and 25 years of age, insurance companies consider you an accident risk. If you are male, the risk level is even higher. Your overall risk level increases further if you have few to no years of driving experience and/or a poor or nonexistent credit rating.

    Solution

    • Understanding that car insurance will be higher if the car is in your name and on the insurance policy, some insurance companies may agree to an alternate solution. Although difficult, it may not be impossible to find an insurance company willing to allow parents to take out insurance on a car in your name. In order to insure a vehicle, you must have a good reason for needing insurance, also called an "insurable interest" in the car. Some insurance companies, according to Car Insurance Rates, may be willing to accept the fact that you all live at the same address as evidence of insurable interest. The insurance policy will most often contain both your names, and although your overall level of risk may still be higher than average, it will not be as high as a car insurance policy only in your name.

    Mitigating Factors

    • If you must insure the car on your own, there are steps you can take to reduce the cost. When shopping for insurance, look for companies that offer a good student discount. Depending on the company, this may reduce car insurance costs by up to 25 percent. A training course discount may save you up to 10 percent, so check into whether the insurance company offers this option. Finally, drive safely and obey traffic laws. The longer you go without an accident or moving violation, the greater the chance your car insurance company will begin reducing rates. In contrast, an accident or ticket can ensure you will be paying higher rates for the next three to five years.

    Considerations

    • Consider shopping for insurance before you start shopping for a car. This approach can help you to find a company offering options and rates that fit your needs and to choose an "insurance friendly" car. It may surprise you to learn how different makes, models and options affect the cost of insurance. The best time for this surprise is before rather than after signing a purchase contract.

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