Go To Top

car in garageHeading off to college, embarking on a world tour, putting your car into winter storage or spending a few months at a second home? If you leave your car at home, unused, consider tweaking your car insurance coverage. One of these options could save you hundreds of dollars a year.

Don't, however, just cancel your insurance without checking your state's laws and your insurer's fine print -- or you could lose your license, rack up hefty fines, and your next insurance policy might be harder to get and more costly. Here are six ways you can save smart.

KEY TAKEAWAYS
  • If you decide not to use your car for certain reasons, you can designate your car as 'planned non-operational', it will help you save on insurance.
  • Some states require you to cancel your auto liability, but you should file an Affidavit of Non-Use (ANU) to keep your registration.
  • If you don't drive regularly and want to save big on insurance, consider buying a pay as you drive low mileage policy.
  • If your car is not in use and kept in your garage, you can buy stored car insurance instead of full coverage.
  • Never cancel or let your insurance policy lapse if you are not using your car; you can use any of the alternatives mentioned.

Why do college students pay more?

College students often face higher car insurance rates than older drivers due to the added risk that comes with their perceived inexperience.

Car insurance rates depend on several factors and one of the most important is your age. Younger drivers have more accidents and are less experienced than older ones so they will get higher premiums. And people of the age group 16-25 have a lot of distractions in their life that make them more likely to be involved in an accident.

Ways college students can save big on car insurance

College students get stuck in a tough spot while trying to figure out how they can afford high car insurance rates. They may not have any other transportation options, so affordable rates and decent coverage is paramount for their peace of mind on campus. And there are ways students can save big on car insurance while also keeping transportation expenses down.

Planned non-operation (PNO)

Planned non-operationSome states allow drivers to designate a car as "planned non-operational," or PNO, if it won't be driven for a period of time, such as three to six months or longer.

Do I need insurance on a PNO vehicle? You don't need to register or insure a PNO car; you just need to complete a Certificate of Non-operation and pay to file it. This is the least expensive way to cut auto-related costs -- by avoiding both registration and insurance expenses. Be aware that a PNO-designated car cannot ever be driven. In fact, it can't even be towed or parked on public streets, and in some states (such as California), drivers must turn in the vehicle's license plates.

The PNO certification is most appropriate for those who store cars for long periods without driving them. PNO is not a great solution for students or anyone who might need their cars at some point during the year; if you need car insurance for young drivers, you may want to explore other options. But, if you travel extensively, own more than one home (and keep vehicles at each location), or go away to college, other strategies let you drive occasionally while still saving money.

Affidavit of non-use

affidavit of non-useIn some states, you may be able to cancel your auto liability but maintain your registration by filing an Affidavit of Non-Use (ANU). California, for example, requires that you complete a PNO for your vehicle's registration, then file an ANU to inform the DMV that you have or will be canceling your auto liability insurance and will not be driving the car. In order to begin driving again, you'll have to secure the legally-required minimum coverage and notify the DMV.

New Mexico's motor vehicle division stipulates that if your vehicle is not being driven, you must submit a completed and signed ANU form annually. Your registration will be reflected as "unknown" for insurance purposes, but you should not incur a penalty as long as you don't drive on New Mexico roads.

Low mileage and pay as you drive discounts

low mileage discountIf you will be driving your car periodically during the year, but not putting on a lot of mileage, get auto insurance quotes for "pay as you drive" (PAYD) low mileage policies. What constitutes "low mileage" driving? That depends on the auto insurance company, but typically ranges between 2,500 and 10,000 miles per year. Those with PAYD insurance plans who drive 2,500 miles or fewer can save as much as 54 percent on their annual premiums, according to the Department of Transportation.

Understand that PAYD plans usually require your mileage and driving to be monitored. That means allowing some sort of tracking device to be installed on your car or recording your mileage through systems, such as On-Star. Yes, Big Brother is watching you drive, but Big Brother is also giving you cheap car insurance.

Classic car insurance

classic car insuranceDo I need insurance if my car is non operational? If your car is 25 or more years old and gets only occasional use, you may be able to get a less expensive "classic car" policy. Insurers can charge less because classics are generally driven less and cared for more. Ordinarily, to get a classic car policy, your vehicle must be garaged and not used as your primary mode of transportation. These policies can save up to 45 percent over insurance for daily drivers.

Classic car policies actually may limit the number of miles you can drive (and specify that the car be garaged when not in use), so be sure to check the fine print when signing up.

Stored car insurance

car in storageDo you need insurance on a non operational vehicle? It's smart to retain some amount of coverage for your car, even if you aren't driving it. Comprehensive insurance coverage protects you from losses not related to driving -- like theft or vandalism. Because vehicles are much less likely to be damaged in your garage than on the road, parked or stored car insurance is considerably less expensive than full coverage (meaning both collision and comprehensive coverage).

Remember if you're storing a vehicle that is financed, your financing company will not allow you to drop down to only comprehensive. It will likely require you to carry both collision and comprehensive on your stored vehicle.

Occasional driver discount

occasional driver insuranceFor college students who leave their car with their parents, it may pay to register it under the parents' names and add it to their policy as a low-mileage vehicle. For this to happen, your parents would need to be listed on the vehicle's title.

If the insurance policy is in your parents' names and you are only driving the car when you come home for breaks, you should be listed on the policy as an "occasional" driver, which accesses your parents' (probably) lower rate while protecting you. Do not reward your parents' generosity by letting your friends drive your car.

Car insurance discount for college students

Insurance companies offer discounts for college students. Some carriers offer discounts for completing driver education courses or having good grades in school which could be beneficial if you want to save more money over time.

Good student discount

When you have good grades, it is likely that you are a responsible person. As a responsible person, your insurance premiums will be lower, thereby saving you money in the long term.

Driver’s education discount

One way to save money on car insurance is by taking a driver’s education course. While the exact discount varies by insurers, a young driver who has completed a defensive driving course may earn a discount on most coverages.

Distant college student discount

When you're studying away from home, you can save money by leaving your car at home and relying on public transportation. However, in order to do so, you will need to compare quotes from different insurance companies to ensure that you have sufficient coverage. Moreover, you can avail yourself of the distant college student discount. You can confirm it with your insurer and save money on your insurance policy.

Navigation system and anti-theft devices

With an intuitive GPS navigation system, you can drive more safely, which in turn allows you to drive more slowly and safely. Also, a car alarm or other anti-theft device can help you save on auto insurance premiums by reducing the risk of theft or vandalism.

Military discounts

If you are a veteran or military member, you may qualify for certain car insurance discounts. Many car insurance companies offer discount programs for members of the military and their families.

Mistakes every student driver should avoid

avoid insurance mistakesNever let your coverage lapse without first getting the OK from your state DMV. Students have discovered that after several years of not insuring or registering their cars, they owed years of retroactive registration fees and hundreds of dollars in filing penalties.

Don't abandon your insurance if your car is financed. While the state might not care if you drop insurance coverage on a parked car, your auto lender will care a great deal. Once auto insurance companies notify lenders that borrowers are no longer carrying full coverage, lenders can slap on the most expensive coverage. Force-placed insurance, also known as creditor-placed or lender-placed insurance, is purchased by your auto lender and the premiums are added to your monthly payment. Your lender is not running around looking for the cheapest auto insurance rates on your behalf. You. Will. Pay. Through. The. Nose.

Do it right, however, and you could save heaps. Of course, you are smart enough to stay on top of your auto insurance needs. That's why you're in college in the first place, right?

Helpful Auto Insurance Articles & Guides