The average annual car insurance rate for drivers under 25 is $4,820, which is $3,168 more than the average rate for 30- to 45-year-old drivers. Luckily, most car insurance companies offer a good student discount for teens and young drivers under the age of 25 who are still in high school or college.
Students who qualify are usually able to lower cost of their insurance by up to 15% or more, which can be a significant savings on the much higher insurance rates that typically apply to younger drivers.
How to get a good student discount
Most car insurance companies offer a good student discount, sometimes called a good grades discount — but not every young driver will qualify. You’ll need to meet certain criteria to earn a good student discount on car insurance, including:
Being the right age: Most insurance companies limit good student discounts to drivers under the age of 25, but that varies from company to company. For example, Progressive only offers a good student discount for drivers under 23.
Earning good grades: What qualifies as “good” varies from company to company but, most of the time, getting at least B average or a 3.0 GPA is good enough to qualify for a discount. Homeschooled students can sometimes use standardized test scores to qualify.
Maintaining your grades: A good student discount is regularly reviewed by your insurance company, so you’ll need to send in your report card, transcript, or some other proof of your GPA every semester.
Staying single: Most good student discounts aren’t available to married people, so keep that in mind if you decide to get married while you’re still in school full time or before you turn 25.
Depending on your insurance company, there may be other requirements to receive a student discount, so check with your insurance agent for more information about how you or your child can earn a good student discount.
How long does a good student discount last?
You’ll likely need to send a copy of a report card or transcript every semester to keep your good student discount active, but each insurance company will have their own rules.
Some companies also allow students who homeschool to use state test results like the SAT or the ACT to qualify for a good student discount, so check with your insurance company for details on how its good student discount works.
Good student discounts by company
Each insurance company has their own rules about how to qualify for a good student discount. Here’s what you need to know about the good student discount at these top car insurance companies:
Good student discount
Students must maintain a B average or better.
Unmarried students under the age of 25 qualify by maintaining good grades or taking a TeenSMART driving program.
Full time students under the age of 23 must have a B average or better.
Full time students between 16 and 24 need a B average or better.
Full time students between 16 and 24 need a B average or better, or must made the dean's list or honor roll, or rank in the top 20% of their class.
While most car insurance companies have similar standards for what constitutes a good student, not every company is the same.
For example, Nationwide provides a standard good student discount, but they also allow homeschooled students to earn a discount if they score in the top 20% on a standardized test like the PSAT, SAT, or ACT.
How much can I save with a good student discount?
The amount you can save varies from company to company, but generally it’s around 10% or more.
GEICO states that young drivers can earn up to a 15% discount for being a good student, while Progressive says its average good student discount is 10%.  
Most insurance companies don’t specify exactly how much of a discount you get for being a good student because the discount can vary so much. For example, USAA has a smaller good student discount than other companies and it’s not available in Hawaii or North Carolina. 
If you’re a student or a young driver looking to lower your rates even more, the best way to save money is to shop around and compare quotes — you might be able to find a policy that’s significantly less than what you’re paying now.
Why do insurance companies offer good student discounts?
Insurance companies base most of their rating decisions on statistical information. Decades of claims data has shown that younger drivers are more likely to be in an accident or file a claim than older drivers, so car insurance companies charge higher rates for young drivers.
But after more than 100 years of selling auto insurance, insurance companies have learned that students who earn decent grades are also more responsible behind the wheel of a car.
Insurance companies like to rate people as accurately as possible, so they offer car insurance discounts for good students to acknowledge their lower risk as drivers.
Good student discount vs. resident student discount: what’s the difference?
A good student discount is designed to reward students who maintain a B average or higher, which means it has to be earned by keeping your grades up. Like a discount for taking a defensive driving course or using a telematics system, a good student discount requires effort on your part as a driver and is based on recurring behavior.
On the other hand, a resident student discount is usually offered to students who go away to school (typically 100 miles or more away from home) and leave their car behind.
The discount is based on the fact that the student doesn’t have regular access to their car and won’t be driving often. This is more like a low mileage discount specifically designed for students; there is nothing you have to “do” to earn it, it is a lower car insurance rate based solely on spending less time behind the wheel of the family car.