How To Get Discounts on Car Insurance

While exact discount amounts and requirements may vary from insurer to insurer, there are generally several steps you can take to qualify for car insurance discounts from many carriers, such as purchasing multiple policies from the same auto insurance company, practicing safer driving habits, taking driver education courses and more.

Continue reading to learn more about the many ways you can save money through discounts on auto insurance and what you may need to do to activate your car insurance savings.

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  What Types of Car Insurance Discounts Are There?

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  How To Get Car Insurance Discounts

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  What Insurance Companies Offer the Most Car Insurance Discounts?

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  FAQs

What Types of Car Insurance Discounts Are There?

Read the following sections for an overview of the most common types of car insurance discounts and how you can qualify.

1. Bundling Discount

Many insurance companies offer discounts to customers who bundle their policies — meaning they purchase multiple insurance products from the same insurance provider. For example, American Family Insurance customers may save up to 7% across both policies by bundling auto and renters insurance, and they may save as much as 40% by bundling auto and homeowners insurance.^[1]

Similarly, insurers often issue discounts to policyholders who add more than one vehicle to the same car insurance policy. For example, GEICO offers up to 25% off through its multicar discount.^[2] Multipolicy and multivehicle discounts promote more sales for insurance companies while also making it easier for consumers to manage their coverage, since all of their claims are covered by the same insurance carrier.

2. Electric or Hybrid Car Discount

Some auto insurance companies want to encourage their customers to practice environmentally friendly driving habits. As a result, you may qualify for a lower rate on your car insurance policy if you own or lease a hybrid or electric vehicle. Travelers Insurance is an example of an insurance company that offers an eco-friendly vehicle insurance discount to hybrid and EV owners.^[3]

3. Anti-Theft Device Discount

Installing features like a car alarm, a kill switch, a tracking device and other anti-theft systems can lower the odds that your vehicle will be stolen and go unrecovered — which in turn lowers the odds that you will need to file a theft-related claim on your comprehensive insurance. For this reason, many insurers offer anti-theft device discounts, with GEICO’s discount lowering your premiums by up to 23%.^[2]

4. Defensive Driving Discount

Your insurance company may offer a defensive driving discount to promote driver training that lowers your chances of getting into a car accident and filing a claim. That said, you may need to meet certain eligibility requirements for your approved crash prevention course to count for an insurance discount. For example, you can only qualify for a defensive driving discount from American Family in select states if you are at least 55 years old.^[4]

5. Driving Education Course Discount

Similarly, younger drivers may be able to secure discounted insurance rates by undergoing driver’s education. This may involve your state’s mandatory driver’s ed curriculum or additional training required by your insurer. For example, drivers under the age of 25 who have no at-fault accidents or moving violations within the past three years can earn a discount from State Farm by watching videos on the Steer Clear app, taking quizzes and practicing driving.^[5]

6. Early-Bird Discount

Renewing your current policy — or purchasing a new one — before it expires may make you eligible for an auto insurance discount. In some cases, the earlier you buy your new policy, the larger the discount amount will be.^[2] However, you may need to shop a minimum number of days in advance to qualify — American Family, for example, only offers its early-bird discount to shoppers who receive a quote at least seven days in advance.^[4]

7. Good Driver Discount

Good drivers are less likely to file car insurance claims, and they often enjoy lower premiums as a result. To qualify for a safe driving discount, you will generally need to go a certain amount of time without getting into a collision or otherwise filing a claim on your policy. For example, drivers who have maintained an accident-free record for at least one year may save as much as 22% on their GEICO auto insurance.^[2]

8. Homeowner Discount

If you own your home, you may be able to secure a discounted premium on your car insurance policy from certain carriers, such as Travelers — even if you have home insurance from a different insurer.^[3] This discount exists because homeowners are generally viewed as more financially stable — and therefore less likely to file insurance claims — than renters. Typically, owning a home makes you eligible for an auto insurance discount of around 9% to 10%.^[6]

9. Low-Mileage Discount

Drivers who are on the road less are not as likely to get into car accidents and file claims, so they often qualify for insurance discounts. For example, policyholders who sign up for American Family’s MilesMyWay program can save as much as 25% on their car insurance premiums if they drive fewer than 8,000 miles over the course of the year.^[4] Low-mileage discounts are ideal for people who don’t need to drive regularly, such as remote workers or retired seniors.

10. Affinity Discount

Affinity discounts apply to car insurance policyholders based on their membership in or association with a certain group or company. For example, GEICO offers driver affiliation discounts to active or retired federal employees, military personnel and veterans, people deployed overseas for work and members of over 500 other approved organizations.^[2]

11. New Car Discount

Because brand-new vehicles frequently come with advanced safety features and anti-theft technologies that mitigate your risk of filing insurance claims, they may qualify for special insurance discounts. For example, Travelers Insurance’s new car discount extends to owners of vehicles that are less than three years old. That said, this discount opportunity and some others are not available in California.^[3]

Even if your insurer lists a certain discount on its website, availability may vary by region, so you should always check with your insurance agent to see which discounts apply in your area.

12. Occupational Discount

An insurance company may also offer auto insurance discounts to policyholders with certain jobs. For example, COUNTRY Financial provides discounts for professions it deems especially important to the communities it serves, such as teachers and first responders — including firefighters, police officers, emergency medical technicians and paramedics.^[7]

13. Preferred Payment Discount

Insurers often have preferred payment methods that make it easier for them to collect and manage customers’ premiums, so they may reward policyholders who pay through these methods with lower rates. For example, Travelers customers may secure a discount by paying their premium in full at the beginning of the coverage period, consistently paying their premiums on time or paying through an electronic funds transfer or automatic payroll deduction.^[3]

14. Loyalty Discount

If you stay with the same insurance company for an extended period of time, you may qualify for a loyalty discount at your policy renewal.^[4] Loyal customers may also be eligible for additional benefits, depending on the insurance carrier. For example, COUNTRY Financial offers legacy discounts, meaning eligible customers can pass on multicar and bundling discounts to their unmarried children under the age of 25 — regardless of whether those children live with them.^[7]

15. Safety Features Discount

When your car comes with advanced safety features, it’s less likely that you’ll be injured in an accident and need to file a personal injury protection or medical payments coverage claim, leading to lower insurance costs. For example, GEICO offers discounts ranging from 3% to 23% for vehicles that have daytime running lights, anti-lock brakes or restraint devices, such as air bags, seat belts and passive restraint systems.^[2]

16. Storage Discount

Vehicles that aren’t actively on the road are naturally less likely to be involved in accidents, so these cars may be eligible for discounted insurance policies. For example, military members and families insured by USAA can get up to 60% off on their auto coverage by storing their cars in a secure location when they are deployed or otherwise not driving. Keep in mind that USAA’s storage discount is not available for policyholders in North Carolina or Virginia.^[8]

17. Teen Driver Discount

It’s important to look for insurance savings opportunities whenever your teenage child is about to start driving because teens are generally the most expensive age group to insure — largely due to their inexperience and high exposure to fatal car accidents.^[9] Fortunately, some insurance carriers — like Liberty Mutual — may offer you a discount for up to one year simply for adding a new teenage driver to your auto policy.^[10]

18. Good Student Discount

Although young drivers are usually costly to insure, you may be able to save on your child’s car insurance premiums if they maintain good grades in school. To qualify, your child may need to keep up a grade point average of at least 3.0 or be named to their school’s honor roll or dean’s list. Good student discounts typically reduce your insurance bill by 5% to 15%.^[11]

19. Student-Away-at-School Discount

Another way to save on auto insurance for your school-age child is to see if they qualify for a student-away-at-school discount, which accounts for the fact that students will drive less and have a lower exposure to crashes if they don’t have easy access to their cars. Your child may only be eligible if they attend a boarding school or university located no less than 100 miles from your home.^[3]

20. Mature Driver Discount

Senior drivers may be able to secure discounted premiums by completing approved driver training classes. For example, Senior Driving Discount of America offers online courses for drivers ages 50 and older, with individuals who complete a course and earn their digital certificate potentially qualifying for car insurance discounts of up to 15%.^[12]

21. Usage-Based Discount

Usage-based insurance programs use mobile apps or telematics devices to detect your driving behaviors and/or mileage and adjust your insurance premiums accordingly. For example, Nationwide’s SmartRide program provides discounts of up to 40% to drivers who consistently exhibit safe habits behind the wheel. Meanwhile, Nationwide’s pay-per-mile insurance program — SmartMiles — changes your premiums each month based on how much you drive.^[13]

22. Other Discounts Based on Your Car Insurance Carrier

Though not directly related to your insurance premiums, you may qualify for discounts on other services based on your status as a policyholder with a certain insurance company. For example, USAA members may be eligible for discounts on gym memberships, car rentals, travel costs, vehicle maintenance and tickets for theme parks, concerts and sporting events.^[14]

How To Get Car Insurance Discounts

While some discounts may be automatically applied to your policy if you qualify — such as bundling or loyalty discounts — the most straightforward way to make sure you receive a certain discount is to ask your insurer to apply it to your policy and provide any documentation needed to prove your eligibility. Keep in mind that some discounts may only apply to certain car insurance coverage types rather than to your entire premium.

For example, GEICO’s anti-theft device discount only applies to comprehensive coverage, while its restraint device discount only applies to PIP or Medpay.^[2]

What Insurance Companies Offer the Most Car Insurance Discounts?

Most car insurance companies offer a wide array of discounts, so it may not make sense to pick any given provider just because it offers several discounts you may qualify for. Instead, it’s recommended that you shop around — comparing quotes from three to five different insurance carriers — since each insurer has its own unique formula for assessing risk and calculating premiums.

SmartFinancial can simplify the insurance comparison shopping process. After you fill out a brief online questionnaire, we’ll connect you with agents who can help you evaluate your options and find the right car insurance policy for someone with your coverage needs and budget. Enter your ZIP code, and begin comparing auto insurance quotes for free today!