It happens time and time again when kids go off to school: America's youngest drivers look at the rates they are offered for student car insurance, and their eyes pop out of their heads. Insurers do charge extravagant rates for younger student drivers. Here are some of the factors that go into these high premiums.
Since most students have not been on the road long, they have not yet built up the critical item that will protect them from sky-high student car insurance rates: a good driving history. What insurers generally do is issue discounts to good drivers who have perfect driving records, and hike up the prices for everybody else. This means students are already starting with a high risk rating, which is why so many of them overpay or are denied access to car insurance.
The newer and more desirable your vehicle is, the more you will pay on your car insurance rates. That's because auto insurers have to cover the cost of your vehicle, and provide for things like theft or vandalism. Faster, flashier cars get higher insurance risk ratings and additional costs. Reliable small cars with a few years on them and several thousand miles on the odometer typically get students a lower bill.
Car insurance companies can also designate high risk areas that drive up the insurance premiums even more. If your college or university is in a high-traffic or high-crime area, be prepared to pay more for your annual policy.
Keep these cost factors in mind when you are at the table negotiating with car insurance companies.