A simples guide

Using my student loan to pay for car insurance

The short answer to the question is “yes you can”, but if you’re a student thinking of taking your car to university, it is worth considering all your options.


With average student debt now estimated at over £40,000 by the time you finish university, it’s worth shopping around for the best deal you can find.


But before even looking at student car insurance options, it’s worth considering whether you should even take the car with you to university. Are you less likely to use it if you’re on campus or living in a city centre? Have you considered the running costs such as petrol and maintenance? Or where you would park the vehicle?  

Not taking your car?

If you decide not to take the car with you, there are a couple of options when it comes to your student car insurance:

  • Maintain your insurance but leave the car behind. You could just keep your policy running while you’re at university. Obviously you won’t be using the car as much. This means you should contact your insurer and tell them that you’ll have a lower annual mileage. You might even benefit from a lower premium and possibly build your non claims discount.

If you do find that actually you are taking the car with you more often, you’ll need to tell your insurer. This is because the risk address of the policy is likely to change to your new university address.

  • You could take the car off the road from a legal point of view. Don’t think that because the car is just sitting on your parents drive that you don’t need to tax and insure it, because you do unless you apply for a Statutory Off-Road Notice or SORN as it is commonly known from the DVLA. 
Can I use my student loan to pay for my car insurance?

Keeping costs low

Assuming you decide to take your car with you, it’s worth looking at options to keep the costs as low as you can:

1) Shop around. Use our car insurance comparison service to find the right cover and deal for you.

2) Consider a telematics policy. These policies involve having a ‘black box’ fitted to your car, or downloading an app on your phone which monitors how you drive. The purpose of these policies is to reward careful, younger drivers with lower premiums based on the way they drive.

3) Increase the security in your vehicle, even an approved steering wheel lock might help.

4) Try and park the car off road on a drive or preferably in a locked garage.

keeping student car insurance low

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