What Car Insurance Discounts Can I Get?
If you want to lower your car insurance rates, one good place to start is with
car insurance discounts. Today’s insurers offer a variety of discounts to
existing and new policyholders alike. Some types of discounts are available
for certain types of drivers, like teens, seniors, or military members, while
others reward you for having a good driving record, going claims free, or even
having certain safety or security features in your vehicle.
Types of Car Insurance Discounts
Discounts and eligibility requirements vary by insurer and state, but
generally, most insurance companies offer discounts that fit into one of these
categories:
- Policy discounts
- Driver behavior discounts
- Driver characteristic discounts
- Affiliation discounts
- Vehicle-based discounts
To help you unlock the most savings, we’ve compiled a list of the most common
discounts offered by insurance companies in our Cheapest Car Insurance Companies of 2023</a > rating. Keep in mind that this isn’t a complete list of available
discounts. The best way to find out what discounts are available to you is to
contact your insurer. Or, if you’re currently shopping for new coverage, make
sure to ask about available discounts and whether you or any driver listed on
your policy meets the eligibility requirements.
Policy Discounts
Bundling or multipolicy discounts
If you purchase two or more insurance policies from the same insurer – auto,
home, renters, etc. – you may be eligible for a multipolicy or bundling
discount. You may also be able to get a discount for insuring two or more
vehicles through the same insurer. Bundling discounts and eligibility vary by
insurer, but they are typically one of the most common auto insurance
discounts available.
Policy renewal/loyalty discounts
Insurance companies want to keep your business, and many of them will reward
you with lower rates if you continue to renew your policy. If you’re about to
or already have renewed your policy with your existing insurer, contact them
to find out if you’re eligible for a loyalty auto insurance discount. That
said, you should still shop around. Even if your insurer does offer a loyalty
discount, it may not be enough to beat lower rates offered by other insurers.
It’s worth noting that not all “loyalty” discounts are defined the same way.
Some insurers in our Best Car Insurance Companies of 2023 rating define
loyalty as purchasing more than one policy (bundling) or insuring multiple
vehicles.
Pay-in-full discount
Auto insurance companies like when customers pay their entire premium upfront
and will often reward policyholders with a pay-in-full discount. If you’re
purchasing a new policy, you may be able to see pay-in-full discounts when you
complete the quote process. If you’re renewing your existing policy, contact
your agent to find out if pay-in-full discounts are available.
Paying in full may not be the only payment-based discount available. Some
insurers also provide auto insurance discounts to customers who pay their
premiums quarterly or semiannually instead of monthly. If making a full
payment isn’t in your budget, find out if the insurer offers other payment
schedule discounts.
Automatic payment discounts
Many car insurance companies also reward customers who choose automatic
payments. You can typically set up automatic payments using an electronic
funds transfer (ETF) from your checking account or by setting up recurring
payments using your debit card or credit card.
Automatic payments can also be a great way to ensure your coverage doesn’t
lapse, but they aren’t without drawbacks. If you choose automatic payments,
you’ll need to have the funds available for withdrawal in accordance with your
payment schedule. If the funds aren’t available, you may be responsible for
fees and penalties from your bank and your insurer. It’s also possible that
your insurer will cancel your policy for non-payment.
Paperless discounts
In an effort to reduce their carbon footprint or merely to cut down on paper
and postage costs, many companies entice customers to go paperless. Opting
into a paperless feature generally means your bills and any other policy
correspondence or documentation will be delivered via email or accessible
online or through the company’s app.
Driver Behavior Discounts
Good driving discounts
If you have a clean driving record, meaning your driving history is free from
accidents, speeding tickets, and other violations, your insurer will see you
as a low risk. That can earn you lower premiums in general, but some insurers
also offer a good driver discount.
Usage-based insurance discounts
Usage-based insurance (UBI) programs allow insurance companies to track key
metrics, like speed, breaking, and mileage, by using a mobile app or a
tracking device installed in your vehicle. These programs generally encourage
safer, smarter driving, lowering your risk of getting into or causing an
accident. As such, many companies use discounts to incentivise drivers to
enroll in UBI programs.
Defensive driving discounts
A defensive driving course can help you become a safer driver and depending on
your insurer and where you live, it may even lead to lower car insurance
rates. Many insurers reward drivers who take defensive driving courses by
extending a discount once the course is completed. Some providers offer these
discounts to all of their customers while others offer them only to a specific
group of drivers, like seniors or teens.
Low-mileage discounts
The less you drive, the lower the risk to both you and your insurance
provider. That’s why a lot of auto insurers offer discounts for those who
drive fewer miles per year. The definition of low-mileage varies by insurer,
but if you drive fewer than 14,200 miles a year (the national average) it’s
worth asking your insurer about potential discounts.
Driving fewer miles each year? Find the best cheap low-mileage car insurance companies </a >for 2023.
Driver Characteristic Discounts
Good student discounts
Teen and young adult drivers generally have higher insurance rates, but good
students (and their parents) may be able to unlock lower rates with good
grades. Most of the car insurance companies we analyzed offer discounts for
drivers who are full-time students and maintain good grades. The definition of
“good” differs from insurer, so if you think it may apply for you or a driver
on your policy, then contact your insurer to find out.
Learn more about the cheapest car insurance for teens, students, and new
drivers »</strong ></a >
Distant student discount
If there is a student driver on your policy and they’re away at school, you
may qualify for a discount if their car stays at home. Generally, the student
must be enrolled full-time and be at least 100 miles away from home, but
requirements and eligibility may vary by insurer.
Affinity Discounts
Employer-based discounts
Some employers negotiate bulk auto insurance rates for their employees. If
yours does, you may be able to get a discount while you work there. Keep in
mind that these discounts are tied to your employment and will likely end if
you’re no longer employed. If your employer does have an agreement with a
specific insurer, it’s still a good idea to shop around. You may be able to
find a lower rate elsewhere.
Profession-based discounts
Many of the top auto insurance companies offer perks for policyholders that
work in a specific field. Exactly which professions qualify for savings
varies, but teachers and first responders are often included.
Organizational discounts
This type of discount is available to members of specific organizations, the
likes of which vary by insurer. For instance, some insurers will give
discounts to customers who have a AAA membership or an AARP card. Others may
give you a percentage off if you are a member of an alumni association.
Military and veteran discounts
If you or another driver on your policy is a member of the military community,
you may be eligible for lower rates. Many insurers offer military or veteran
discounts as a way to honor those that serve. If this applies to you, it’s
also a good idea to look into USAA car insurance</a >. Its rates are among the lowest of those we’ve analyzed.
Read more about car insurance for military and veterans</a >.
Vehicle-Based Discounts
Safety-equipment discounts
Vehicle safety features can protect drivers and passengers, potentially
creating less risk for insurance companies. Though not all companies have
safety equipment discounts, some, like Geico, do. If you have common safety
features – e.g., airbags, anti-lock brakes – in your vehicle, ask
your insurer about available discounts.
Anti-theft feature discounts
Much like safety features, anti-theft devices can decrease the risk associated
with insuring your vehicle. Not all insurers offer this type of discount, but
if you have an anti-theft system in your vehicle, it’s worth contacting your
insurer to find out if you’re eligible for savings.
New vehicle discounts
Some car insurance providers will offer discounts for customers who drive new
cars. While the definition of “new” varies by insurer, if you drive a car
that’s less than three years old, you could earn a percentage off your
premium.
How To Get the Best Car Insurance Discounts
Below, you’ll find more ways to save as much as possible on your auto
insurance policy.
Shop Around When It’s Time to Renew
The Insurance Information Institute recommends getting quotes from at least
three insurance companies whenever it’s time to shop around. Insurance rates
vary widely from driver to driver and state to state, so you might be
surprised to find out which company is the cheapest for you.
Learn how to get car insurance quotes online »</a >
Call an Agent for Personalized Coverage
Independent insurance agents can help you shop around and find the lowest
rates for you. And, by picking up the phone, you can talk to someone who can
help you find discounts or specialized coverage that you might not be able to
find online.
Raise Your Deductible or Lower Your Coverage
When you raise your deductible or lower your coverage, you get lower premiums,
but you’re taking a risk that you’ll have to pay more if you are in a crash or
your car is damaged some other way. This strategy can be especially beneficial
as your car loses value and won’t cost as much to repair or it isn’t as
important to repair minor damage.
Find out how much car insurance you need »</a >
Maintain Good Credit
Good credit can show an insurer that you have a history of paying your bills
on time. As such, drivers with good credit often pay lower rates than those
with poor credit. If you have poor credit, improving your score may help you
unlock lower rates.
Check Insurance Rates Before Buying a New Car
It’s no secret that it costs more to insure some cars than others, but did you
know that you can check to see how a new car will affect your premiums before
you actually buy it? Cars with high theft rates or powerful engines are two
examples of a way a new vehicle can quickly make your premiums more expensive.