Zaneta Wood, Ed.S. has over 15 years of experience in research and technical writing bringing a keen understanding of data analysis and information synthesis to reach a wide variety of audiences. She studied adult education and instructional technology at Appalachian State University as well as technical and professional communication at East Carolina University. Zaneta has prepared technical p...

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Joel Ohman is the CEO of a private equity backed digital media company. He is a CERTIFIED FINANCIAL PLANNER™, author, angel investor, and serial entrepreneur who loves creating new things, whether books or businesses. He has also previously served as the founder and resident CFP® of a national insurance agency, Real Time Health Quotes. He has an MBA from the University of South Florida. Jo...

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Reviewed by Joel Ohman
Founder & CFP®

UPDATED: Oct 5, 2020

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Here's what you need to know...

  • Your education level may play a role in your insurance rates and accident statistics
  • Some car insurance companies, like Liberty Mutual, recognize the statistical difference in accident and claims rates based on education by providing a new graduate discount
  • The new graduate discount may expire at some point, and drivers should be prepared to shop for new rates to identify the best deal possible on car insurance

Since you first started driving your car, you have been required by law to purchase and maintain a minimum level of auto insurance. Most states have a liability auto insurance requirement that is designed to help you pay for the damages you cause while you are driving a car.

As a younger driver, you may have had to pay higher insurance rates than many other experienced, mature drivers. 

However, now that you are a college graduate, you may qualify for a college graduate discount available through some providers that can help you to save money on the cost of your auto premium.

Compare car insurance quotes from top companies side-by-side. Enter your ZIP code into our FREE quote comparison tool above to begin.

Table of Contents

A Closer Look at College Graduate Demographics

If you started driving a car in your teen years, you may be rather accustomed to paying a higher rate for car insurance.

However, you may have been able to take advantage of a good student discount and other common auto insurance discounts available through select providers to save money on car insurance.

Some insurance companies offer recent college graduates a special savings opportunity through a new graduate discount, and a closer look will reveal the reasoning behind this car insurance discount.

The Earning Power

Several of the factors that car insurance companies look at when determining your insurance rates are related to your income potential or earning power, and college graduates generally have higher earning power than individuals who do not have a college degree.

Car insurance companies may look at your credit rating to determine your overall insurance premium.

College graduates often have better credit ratings and improved financial capabilities to pay bills on time.

In addition, your income potential could impact your claims history. Individuals who have a higher earning power may be more likely to pay smaller repair costs out of their own pocket rather than to file a claim.

Some statistics indicate that college graduates may statistically file fewer claims than those drivers who have not graduated college and who may have more limited financial means.

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The Driving Statistics

Car insurance companies also analyze driving statistics for all drivers in an area to determine their projected risk for extending car insurance coverage to you. Some analytical studies have indicated that college graduates are safer and more responsible drivers.

The new college graduate is a way for car insurance companies to recognize this factor. However, remember that there are many other factors that can also affect the overall cost of your auto insurance policy, and these include:

  • Age
  • Gender
  • Marital status
  • Details about your vehicle
  • If you are a homeowner
  • Statistics about drivers in your zip code
  • Your driving and claims history

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The New Graduate Discount Available through Some Providers

Each car insurance company has a unique way of analyzing statistical data and calculating rates. Some have chosen to offer a new graduate discount to recent college graduates, but remember that this discount is typically only available to graduates for a limited period of time.

Some auto insurance providers do offer this type of car insurance discount to drivers each time they earn an even more advanced degree.

Therefore, even though you may have already used the new graduate discount in the past when you earned an Associate’s or Bachelor’s Degree, you may now be able to use it again through select car insurance companies when you earn your Master’s or Doctorate degree.

The Level of Your Degree May Matter

If you are preparing to graduate college soon, be aware that the level of your degree may matter when looking for a new graduate degree.

While some car insurance providers offer a flat rate discount for any type of college degree earned, others recognize that those drivers who have an advanced degree may be safer drivers on a statistical basis than those who have a basic or lower-level college degree.

These car insurance companies may offer an even greater level of savings under the new graduate discount if you have an advanced degree.

Because of this factor, you should compare new graduate discounts thoroughly to find the maximum savings potential possible for your car insurance premium.

Other Life-Changing Factors that May Alter Your Car Insurance Rates

Many people make several life changes around the time they graduate from college. For example, some people may decide to buy a new home after landing their first big job or to get married.

Because many of the major life changes that you may experience immediately before or after graduating from college can affect your insurance rates, it may be wise to shop around for car insurance rates thoroughly.

Finding the Best Deal on Car Insurance

Remember that the new graduate discount is only one of many car insurance discounts that you may qualify for. For example, some providers also offer a discount based on the profession that you are now working in or based on your marital status.

If you have recently moved into a new zip code after graduating college, this change can also affect your rates.

Because so many factors can affect your car insurance rates, it is important to compare multiple policies. You may look for the new graduate discount available through some car insurance companies, but this should not be your guiding factor when making a buying decision.

Compare all offers fully, and remember to review the financial strength of each insurance company before you decide which company to purchase coverage from.

Remember to Shop for New Rates Periodically

Numerous factors can affect your car insurance rates, and each of these factors can potentially change within a very short period of time. In addition, car insurance companies can alter how they calculate rates, and this can also affect the cost of your auto insurance premium.

Because so many factors can potentially fluctuate with regards to car insurance, it is wise for drivers to compare new auto insurance rates every six months. By getting in this habit now, you can ensure that you always have a great rate on your auto coverage.

Enter your ZIP code into our FREE rate comparison tool below to get started saving on your car insurance.