Hello,
I am a commuter student and went to purchase a car the other day. I would have bought it there on the spot but it was Sunday and the insurance company was closed so I had to wait until the next day to get a quote. Despite the fact I have a perfectly clean record (no accidents, tickets, etc.) they want $4400/yr for car insurance. I don’t think someone with 4 DWIs driving a '62 Ferrari GTO has to pay $4400/yr for insurance. Because of my age and so-called inexperience that’s the outrageous sum they want for insurance. I tried every insurance company under the sun, and they are all around $4000/yr.
I even tried to get a quote on an old Honda accord with nearly 50k miles on it and the quote came down to $3700. They said to get a normal rate because of my age (20) I’d have to get a car worth less than $5k and not get collision insurance. So in other words, if I take all of the risk off of them, they will give me a normal rate.
I start college next week and I do not want to be stuck hitching rides the whole year.
I can’t imagine every commuter at the school is paying $4k for insurance, there are kids even driving BMWs and such.
Is driving your only option? Is there a viable public transit alternative? 4k a year is quite a chunk of change for commuting – that in addition to the other expenses that can pile up as a result of driving to school can end up costing more than most room and board plans.
Can you be added to your parent’s policy? Make sure the insurance company knows how much you drive. If you are close to school then you might get a lower rate. If you get collision coverage, consider a higher deductible such as 500 or 1000 or higher. It can make a big difference.
One thing to remember to that collision coverage is limited to the book value of the car based on the insurance book value (not the blue book value). For example you buy a 8,000 car, the insurance company will value the car at a lower value say 6,000. You get in a accident and the repairs are 6100. They will declare the car totaled, pay you 6000-the deductable and then they take your car. The point is that at a certain point collision coverage might not be worth it for you.
How long have you had a license? Unfortunately, young driver are a very high risk for insurance companies. Add to that the outrageous prices that are charge for body work.
Unfortunately, the insurance company gave you the best advice. Buy a cheap car that you can afford to self insure. If you live close to the school, a high mileage car might be a better option. 50K miles is not high mileage. Keep in mind that the insurance company is still providing property damage coverage and liability coverage.
I am guessing that anybody driving a nice car such as a BMW has parents that are paying the insurance bill. Could be wrong but most student can’t afford a nice car and the high insurance bill that goes along with it.
All three of our kids drove OLD but reliable cars though high school and college. The cars have/had little book value and no liens, so we only carried liability on them. It’s a risk you take, but soooo much cheaper. With the savings on insurance, you can put a little money away each month so you have some cash to buy another vehicle in the event of an accident… you never know when a relative may be getting rid of an old (reliable) car and be willing to sell it cheap.
I agree with what others have said - get a cheap (but reliable) car and pay for liability insurance only.
I got a 2005 vehicle not too long ago, with 115k miles on it. It runs great and was only $4500 and insurance runs $76/month for liability.
If you do something more like that, take some of the money you save from buying a cheaper car and some of the savings from liability-only insurance and put it in a savings account to use for any repairs you may need. You’ll probably come out ahead.
@preamble1776 Yes driving is only option, there is no public transit. On a day with good weather I could probably walk, if I wanted to, but any day it rains would not work and we are up north so pretty much the winter would not work as well. Also, one of the main roads is very dangerous at night and many people have been killed on it since there are blind hills and they don’t shovel the sidewalks.
@noname87 I tried that but what the insurance company did was say my car would make it so we have 3 cars, and there are 3 people with a license and they assume each person is a primary driver on each car. Then what they do is assume I may drive the other 2 cars occasionally so no matter what car I get unless it is very cheap, my insurance rate is calculated based upon the highest value car.
Since you can walk to class then a high mileage car (100K+) would be a good option since you do not need 100% reliability. Look at something like a Honda or Toyota with 100-120K. Not sexy or impressive but reliable. Just make sure that if it timing belt (verus chain) that has been changed.
@noname87 What would you recommend? I live up on a steep hill (well the whole neighborhood is hills) and the school is on a hill and it gets real icy in the winter, so I need reliability to that extent.
Our son drives a 1999 Camry. Except for the 200k miles, we’ve kept the interior and exterior in good condition.
We have a sign in the window that says “Car is NOT for sale” because we get barraged by people and notes asking us to sell it. (Somebody on our block keeps leaving his number, hoping we’ll sell.)
Yep it’s a 16 yr. old car, but it runs well, he drives it wherever he wants, and we can afford the insurance on it.
I would look at Consumer Reports ratings for reliability ratings on various cars. Not perfect since you do not know how well a given car was maintained but it is a start. On other sites (maybe edmunds?) you can search by model years and it will tell you about common problems and a indication of the cost to repair. I have had good luck with Hondas and Toyotas but that doesn’t mean that other brands are not good.
The reason I mention the timing belt is that can be an expensive repair. A lot of car manufactures recommend replacing the belt every 60-80K but it varies. When it fails the car is dead and in some cars it could cause engine damage. Clutch repairs can also be expensive.
For icy roads I recommend walking or public transportation or chains. Really icy hills should be avoid at all cost. NO car/truck without chains is good on icy roads. I would highly recommend anti-lock brakes for that environment. Traction control might also be helpful but if all wheels are on ice then it actually could be a negative since it will stop the tires from spinning. Rear wheel drive cars also tend to do poorly on icy hills.
We have 4 cars and three teenage drivers, but since the newest car has 180,000 miles, our monthly premium is $85 . We also live in a hilly area with snowy winters, and our 1999 Honda CRV with AWD does pretty well. In fact, when I was teaching our oldest to drive, I tried to have her skid the CRV in a snowy parking lot for practice and we couldn’t do it.
Another issue to think about it your credit rating. In many states, insurance companies look at your credit rating as an indicator of how likely you are to file claims, and Consumer Reports recently published an article that said that in many cases that has a bigger effect on your premiums than your driving record.
Ask your parents to take a look at the insurance policy.
We did the other day-- my husband called to ask about adding my son’s new car (It’s a '98… so it’s only ‘new’ to him!)
The person on the phone realized that we were “Platinum” customers, who had been with the company for 20 or 25 years or something. The price of our insurance dropped RADICALLY, making my son’s insurance much more affordable.
On a major bikeforum, there a guy who bicycle commuted in Rochester, NY every day for about 8 years - all year round. Minneapolis consistently leads the nation in per capita year round bicycle commuters. We don’t melt in the rain, and there are ways to deal with snow.
. We also live in a hilly area with snowy winters, and our 1999 Honda CRV with AWD does pretty well. In fact, when I was teaching our oldest to drive, I tried to have her skid the CRV in a snowy parking lot for practice and we couldn’t do it.