Auto insurance is something every driver needs, but this doesn’t mean you have to break the bank to get car insurance coverage. Consider what car insurance discounts your auto insurance provider offers to keep your vehicle insurance premiums affordable.
Car insurance discounts can save you money on your vehicle insurance policy. There are over a dozen standard car insurance discounts. You could be eligible for a variety of discounts on your car insurance.
Reviewing and understanding car insurance discounts is crucial when shopping for auto insurance. This comprehensive guide can assist you with the process by highlighting the discount type and how much money you could save.
What are the Best Car Insurance Discounts?
Car insurance discounts fall into five categories, each of which applies to a different aspect of an auto insurance policy.
The most common categories can relate to either the driver themselves, their vehicle, or their vehicle insurance policy:
- Driver safety discounts
- Car Insurance policy discounts
- Driver status discounts
- Vehicle discounts
- Usage-based discounts
Car insurance companies offer numerous opportunities to save on vehicle insurance using discounts. Discounts are very valuable and can help you afford good auto insurance coverage.
Below are some of the most common car insurance discounts you will see when shopping for auto insurance coverage. Understanding them is essential so you can take advantage of all potential savings on your car insurance premium.
Also, remember that these are just rough estimates of how much you could save on your car insurance policy. The initial discount the insurance company gives you may be higher or lower than described here.
Driver Safety Car Insurance Discounts
Safe Driver Discount
Safe driver discounts reward those with good driving habits like wearing a seat belt, low driving speeds, and mindful braking, among other things. So long as you are acting responsibly behind the wheel of a car, you can receive a break on your liability and comprehensive premiums. Depending on the insurance company and driving habits, you may see auto insurance discounts of around 10% or even higher.
Some insurers do not differentiate between safe and good-driver discounts. Safe and good-driver discounts are similar, with some tweaks and requirements varying between auto insurers.
Good Driver Discount
Some national insurance companies offer good driver discounts if you have been accident-free for three to five years. Accident-free or good driver, the discount is usually applied automatically to your insurance premium by your insurer. You might not qualify for it right away if you have a clean driving record with no at-fault accidents.
When your current policy renews, you can ask about a good driver discount if you are accident-free for a specific period. Good driver discounts typically range from 10% to 40%. What is defined as a “good driver” can vary from one insurance company to another. Be mindful of that when signing up for a new policy.
Defensive Driving Discount
Some auto insurance providers offer driving school discounts if you take an approved defensive driving course. This may only apply if you are at least a certain age, but it could still be worth looking into. It’s a reasonably simple way to save around 5% to 15% on liability, collision, and personal car insurance coverages.
These defensive driving courses teach you valuable driving tips, like being mindful of risks on the road, traffic awareness, and navigating in extreme weather conditions. You must provide proof of completion to receive the defensive driving discount. If you have already completed a course, the defensive driving discount may be applied when getting a new car insurance policy.
Driver Status Car Insurance Discounts
Good Student Discount
Suppose you or a student driver living in your house is enrolled full-time at a high school or college and gets good grades. In that case, you may be eligible for a good student discount.
To receive a good student discount, you must be a full-time student, and insurance companies require you to maintain at least a B average and be between the ages of 16 and 25.
Good student discounts can be very valuable, with the potential savings as high as 25% on car insurance. You must submit a transcript to your insurance provider for a good student discount.
Away-From-Home Student Discount
Suppose you’re a parent with a teenage driver under your car insurance policy. In that case, you may get an away-from-home student discount once they go to college and no longer have regular access to their vehicle.
If your child leaves their car at home and is more than 100 miles from a college, you could receive an away-from-home student discount. This is because they use the vehicle less and tend only to have access to it on school vacations and holidays. The away-from-home car insurance discount can significantly break your auto premiums, with savings as high as 25%.
Senior Driver Discount
Drivers aged 55 and older may qualify for a senior auto insurance discount.
The senior driver discount may apply as you turn this age or result from taking an approved driving course. This course operates similarly to a defensive driving class and helps you improve your driving skills.
After completing this class, you could see a 15% discount on your liability car insurance and property damage coverage. This discount can be beneficial as your auto insurance rates will increase when you hit “senior” or “mature” age.
Military Discount
Suppose you have served in the military or worked as a federal government employee. In that case, you may receive a military discount on your auto policy.
Insurance companies honor this contribution to our country as veterans and retirees are also typically included in this military discount. If this fits you, you may receive a discount of up to 15% off your premiums.
Consult with your insurance agent to see if your occupation or military status makes you eligible for a military discount. Some insurance companies specializing in providing auto insurance to military personnel may be worth looking into as they tend to have affordable car insurance premiums even before available discounts.
Professional And Organizational Discount
Being affiliated or partnered with a specific organization—such as a trade or professional organization — may get you a discount on auto rates. Some insurance providers offer these membership discounts for certain university alumni groups.
You should contact your insurance agent for a complete list of organizations offering member discounts. The amount you will save on your car insurance premium by being an organization member varies. However, it tends to be lower, less impressive than other discounts they offer. You could see savings ranging from 2% to 10% off.
Policy Car Insurance Discounts
Multi-Policy Discount
Multi-policy discounts, or bundling, give you a break on your insurance rates when you buy multiple policies with the same insurance company. Bundling is when you purchase various types of insurance under the same company.
For example, if you are a renter, you can purchase both renters and car insurance from the same company. As a thank you, you will receive a discount on your premiums.
This Multi-policy discount also works when you bundle car insurance with other coverage options, such as condo, homeowners, motorcycle, boat, RV, and life insurance. The discount you receive varies depending on the type of bundling you do.
On average, bundling homeowners insurance and car insurance can result in a discount as high as 25%. In comparison, renters may see a policy discount of up to 10%.
Homeowner Discount
Some insurance companies may provide a discount for being a homeowner even if you do not have a homeowners' policy with them. Homeowners are seen as financially responsible, meaning they are more likely to pay their insurance premiums on time and in full.
The homeowner discount will apply to various aspects of your car insurance policy, including liability coverage and personal injury protection (PIP).
How much you can save on your auto insurance varies from one company to another. On average, expect an overall saving from 3% to 10% on your rates.
Multi-Car Discount
This discount works like the multi-policy discount but is regarding the number of cars you have. If you own more than one car, purchasing car insurance for both of them from the same insurance company can result in you getting a discount on your premium. This discount is generally advertised, with customers saving up to 25% on their insurance premiums.
More insurance providers will require the same person or their relatives to own all cars on the same insurance policy to receive a multi-car discount.
Early Signing Discount
Shopping for car insurance before your existing policy expires can result in you getting an early signing discount. Early signing is a reasonably rare discount, but if you can find it, it may be worthwhile to inquire about it.
Early signing discounts can get you up to 15% off your insurance premium. How far in advance you need to sign up for a car insurance policy to get this discount varies by the insurer. Typically, purchasing one to two weeks before your policy expiration date is best.
Electronic Billing - Autopay Discount
Customers who opt to get their auto insurance bills and policy documents online instead of being mailed a paper statement can take advantage of an electronic billing, paperless billing, or automatic payments discount.
This discount is not too popular anymore since many policies bill customers electronically. It also provides little of a break on your rates. On average, an electronic billing discount is around 6% off.
Paid-in-Full Discount
Pay your entire six-month or annual car insurance premium upfront. By doing so, insurers will give you a discount of up to 15%.
Not only do you receive a discount, but by taking this route, you eliminate the possibility of paying a monthly finance or service fee to spread your monthly payments evenly over 6 months. Paying in full could be financially wise in the long run.
Customer Loyalty Discount
Being with the same auto insurance provider for several years can result in you receiving a customer loyalty discount. How much you receive with your loyalty discount may depend on how long you have had auto coverage with an insurer.
For example, some vehicle insurers reward customers who have been with them for at least five years. However, every program varies by insurance company and state.
Some also do not give out traditional discounts. Auto insurers have been known to reward long-term customers with accident forgiveness on one accident. You can expect savings ranging from 2% to 10% on your car insurance rates if you want a loyalty discount.
Vehicle Features Car Insurance Discounts
Anti-Lock Brakes Discount
You may qualify for this discount if your vehicle has an anti-lock braking system (ABS). This discount may automatically apply to your car insurance when getting a quote. The discount will apply to your collision coverage, and how much you will save ranges from 5% to 10%. The discount amount depends on your car type and deductible.
Anti-Theft Device Discount
Installing anti-theft devices in your vehicle can get a pretty nice discount on your comprehensive coverage. Depending on the insurance provider, you can get anti-theft discounts based on your vehicle’s safety features, factory-installed, and aftermarket installation.
According to the National Highway Traffic Safety Administration (NHTSA), nearly 41% of stolen cars are never recovered. Auto Theft causes headaches for both drivers and their insurance providers. Installing anti-theft devices can save you money on your insurance rates and put your insurance provider at ease. You may be looking at a discount as high as 25%.
Some examples of these handy anti-theft devices include:
- GPS navigational system - GPS systems can be very helpful in pinpointing where your car is if it ends up stolen. Some GPS navigation system companies can even stop a car thief from being able to restart your vehicle after stealing it.
- VIN etching - VIN etching engraves the vehicle identification number (VIN) on a car’s windshield and windows. VIN etching is a deterrent for thieves as they would have to replace the vehicle’s glass to sell it. Having the VIN on the outside makes it easier to detect the stolen vehicle. Some companies may even waive your comprehensive coverage deductible if you have VIN etching.
- Stolen vehicle recovery system - These systems help police track your stolen vehicle by sending a silent radio signal to an installed transceiver. You must provide proof of installation to your insurer to receive a discount.
Passive Restraint Discount
Vehicle insurers offer passive restraint discounts for cars with at least two front seats with airbags and seat belts. Given that all new cars already have passive restraint systems installed, this discount may be reasonably easy to obtain.
Passive restraints refer to equipment like airbags and seat belts, which are safety devices that keep you in the vehicle and lessen your impact in the event of a collision or car accident.
If your vehicle meets the requirements, you could receive up to a 40% discount on your personal injury protection coverage premium. Cars with these systems, such as seat belts and airbags, are easier to insure because they lessen the risk of bodily injury.
New Car Discount
Suppose you have recently purchased a new car. In that case, you may receive a new car discount from your insurance provider. This discount would reduce your auto insurance costs of your physical damage coverage. However, this discount can differ by insurer and state, especially regarding how “new” is defined.
For example, some insurance companies may offer a new car discount if the driver is the vehicle’s first title owner and the car is a current model year. You can expect to see a discount of up to 15%. This discount will generally stay active for three years, typically without renewing.
Usage-Based Discount Programs
Telematics Discount
Some insurance companies reward safe driving via usage-based discount programs. Through these usage-based programs, auto insurers look at how much you drive your vehicle, your driving habits, and when you drive to give you a break on your car insurance rates.
Drivers can insert a device into their vehicle to measure speed, mileage, and braking habits. This discount is usually applied when renewing your auto policy.
If you are a safe driver, you can see a discount ranging from 5% to 40% off. Many insurance companies will provide a discount for enrolling in the telematics program. From there, the other part of the discount is based on your driving habits.
Low Mileage Discount
Using your car sparingly could save you money on your vehicle insurance. Several insurance companies provide discounts for drivers who drive less than 7,500 miles annually. The amount you will save and the requirements may vary by insurance company.
On average, you can receive a discount as high as 20%. To qualify, you may have to sign up for vehicle monitoring technology known as telematics. Hence, your insurance provider accurately understands how much you drive.
Tips For Car Insurance Discounts
Car insurance discounts may not always be straightforward. Understanding how discounts are advertised is incredibly important so you are not caught off-guard when you receive your statement.
Here are some tips and tricks that may be helpful to consider for your car insurance shopping to go smoother:
Be Mindful of The Fine Print
When looking into car insurance discounts, there are two crucial words: “up to.”
Some car insurance discounts are advertised as saving you “up to” a certain amount. What you see in an advertisement or on an insurance company’s website is not a guaranteed saving. It is only the highest amount an eligible driver can receive.
For example, suppose you are looking for a multi-car discount instead of receiving 25% off your premiums. In that case, you may only see 10% off. It is essential to note if a car insurance discount is specific or an estimate. Hence, you are not surprised when you see your insurance bill.
Some Discounts Won’t Apply to Your Whole Insurance Policy
Only some car insurance discounts result in a discount on your whole car insurance bill. Instead, they may only give you a break on a specific insurance product, like personal injury protection or collision coverage deductible.
For example, passive restraint discounts only apply to personal injury protection coverage if you have purchased it as part of your policy.
Discounts can be selective in where they offer help, so you should be mindful of that when inquiring about them. Still, they can serve as a precious way to save money and should be overlooked for this reason.
Insurance Companies Can Limit Discounts
While you can be eligible for additional discounts, insurance companies tend to cap the total possible discount percentage you can receive.
For example, suppose you are eligible for two different insurance discounts. You may be looking at a high percentage, around 75% off your car insurance premiums. While this is very appealing and may even be exciting, an insurance company’s discounts may be capped at 45%, meaning it is the highest discount any driver can receive. Please work with your insurance agent to see what their insurance company’s discount cap is set at.
Some Insurance Discounts Are Required
There may be some car insurance discounts that state-mandated insurance companies provide to their customers.
For example, some states require insurance companies to give discounts to drivers who take a defensive driving course and provide proof of completion to their provider. Senior or mature drivers may also see similar state-mandated discounts following completing a driving course.
Check with your state’s Department of Insurance or ask your insurance provider about any vehicle insurance discounts they must give you under state laws.
Not All Discounts Apply Automatically
It’s okay to ask about specific discounts to determine if your insurance provider offers them. However, insurance companies do not outwardly advertise many discounts for unspecified reasons.
When it comes to discounts like anti-theft and good student drivers, you will have to take a couple of steps to get such discounts. An insurance company won’t know your child’s grades or the safety status of your vehicle unless you submit reports as proof.
Never be afraid to ask about insurance discounts regularly. Like millions of other consumers, you want to get the best price possible for your car insurance policy.
Discounts Vary From State to State
While states can mandate insurance discounts, they can also prohibit them. A discount you see advertised by your insurance provider may not be offered in your state. States can set their insurance guidelines and regulations, so you must have some knowledge of the laws when beginning your auto insurance shopping.
Your insurance agent should be well-versed in what is and isn’t allowed regarding insurance discounts in your state. If not, feel free to consult your state’s Department of Insurance. This is vital, mainly if you rely on specific discounts on your policy.
Do Research on your Insurance Company’s discounts
Many insurance companies advertise their discounts, while others do not. It would help if you researched all the car insurance companies you are considering to see what discounts they may offer.
This process will also help you learn about insurance companies and determine which one best suits your needs and budget. Compare quotes and contact insurance agents if you have any questions.
Be mindful of online reviews for auto insurance providers. Getting insight from actual clients can be very helpful, especially regarding available car insurance discounts. You never want to settle for just any insurance provider; good auto insurance coverage is crucial.
Get a Free Car Insurance Quote Today and See How Much You Can Save!
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