Guide To Discount Car Insurance
While some expenses, such as registration fees, fuel, and repair costs, are beyond your control, one cost that you can reduce is car insurance. According to CompareInsurance Advisor's research, the average cost for car insurance that includes liability, uninsured motorist coverage, and collision and comprehensive insurance for a 30-year-old driver is $1,998 per year.
Obtaining discounts is one method of lowering your car insurance bill. There are over a dozen common car insurance discounts, some of which you may not be aware you are already eligible for. And, in some cases, you must proactively request a review of discounts from your car insurance agent to ensure that you are receiving all of the savings you are eligible for.
Types of Car Insurance Discounts
We looked at discount percentages from 11 of the nation's largest auto insurance companies when they were available to find typical ranges. Your insurance company may offer you higher or lower discounts.
Multi-policy discount
When you purchase car insurance as well as other policies from the same company, you may be eligible for a multi-policy discount. It's also known as a "multi-line discount" and is frequently referred to as "bundling." Bundling car insurance and home insurance is usually one of the biggest discounts you can get, with savings ranging from 5% to 25%. But don't worry if you're not a homeowner; you can usually combine car insurance with other types of insurance, such as condo, renters, motorcycle, boat, RV, and life insurance.
Farmers lead the way in bundling deductions on an auto policy when you also have a home, condo, or renters policy, according to a comparison of some of the top companies' multi-policy discounts. Bundling your auto and home policies gives you the best overall discount, with savings ranging from 6% to 26%. Renters don't get as much of a break, with discounts ranging from 2% to 9%, but any help is appreciated.
The average discount for homeowners is 13%, for condo owners it is 11%, and for renters it is 7%.
Company | Homeowner multi-policy discount % | Condo owner multi-policy discount % | Renter with multi-policy discount % |
Farmers | 26% | 20% | 9% |
Allstate | 16% | 12% | 5% |
State Farm | 15% | 15% | 6% |
Progressive | 13% | 13% | 4% |
Auto-Owners | 12% | 12% | 5% |
Nationwide | 11% | 9% | 7% |
Erie | 11% | 3% | 3% |
Travelers | 10% | 10% | 5% |
Geico | 8% | 8% | 4% |
USAA | 6% | 6% | 2% |
Keep in mind that this is only the auto insurance portion of the discount. Depending on the company, you may also be able to get a discount on your other policies (home, condo, or renters).
Multi-car discount
This discount is usually available if you insure more than one vehicle with the same insurance company. The typical advertised discounts range from 8% to 25%.
Vehicle safety discounts
You may be eligible for a discount if your vehicle has safety features such as anti-lock brakes, air bags, and daytime running lights. Discounts for daytime running lights are typically very small, but air bag discounts for full-front seat air bags can be as much as 40% applied to your medical payments or personal injury protection coverage.
New car discount
Cars that are less than three years old can frequently qualify for a new car discount, which can range from 10% to 15%.
Anti-theft device discounts
If your vehicle has anti-theft features, you can typically save up to 5% to 25% on your comprehensive coverage. Depending on the insurance company, you may be able to obtain anti-theft discounts for both factory and aftermarket installed devices.
According to the National Highway Traffic Safety Administration, approximately 41% of stolen vehicles are never recovered. Here are a few examples of anti-theft devices that can assist you in recovering a stolen vehicle and possibly obtaining a discount:
- GPS-based systems: Some vehicles are equipped with services such as OnStar or Toyota's Safety Connect, which use GPS to assist in the recovery of a stolen vehicle. Some systems, such as OnStar's "Remote Ignition Block," can prevent a car thief from starting your vehicle.
- Stolen vehicle recovery systems: These types of systems, like LoJack, help law enforcement track and recover your stolen car by sending a silent radio signal to a transceiver installed in the car. Your car insurance company may offer a discount, but you’ll need to provide proof of installation.
- VIN etching: This is a permanent engraving of the vehicle identification number (VIN) on a car’s windshield and windows. It serves as a deterrent to car thieves who would otherwise have to remove and replace VIN-etched glass before selling your vehicle. Some auto insurance companies will not only give you a discount for VIN etching, but they may also waive your comprehensive coverage deductible if your car is stolen.
Good driver discounts
Car insurance companies adore safe drivers and frequently reward them with discounts. Typically, a car insurance company will require you to be incident-free for a certain period of time. For example, if you haven't had any accidents in the last five years, Geico car insurance could save you up to 26 percent. You may be eligible for a discount if you haven't had any accidents, car insurance claims, or traffic violations. Discounts for good drivers typically range from 10% to 40%.
Defensive driver discounts
If you're willing to take an approved defensive driving course, some insurance companies will give you a discount. However, keep in mind that this discount may only be available to qualified drivers of a certain age, usually 50 or older. Defensive driving discounts typically range between 5% and 10%. This discount is required in some states for mature drivers.
Good student discount
If you or your student driver are enrolled full-time in high school or college and meet certain criteria, you may be eligible for a discount. Car insurance companies typically require students to have at least a B average and to be between the ages of 16 and 25. We discovered excellent student discounts ranging from 8% to 25%.
Students away at school discount
You may be able to get a discount if your student is away at school and does not have a car. Car insurance companies have different requirements, but typically the student must be under the age of 25, live more than 100 miles from home, and have access to your car only during school vacations and holidays.
Pay in full discount
Car insurance companies usually give you a discount if you pay for your entire policy term up front.
Top companies offer discounts ranging from 6% to 14% if you pay your insurance bill in full rather than in monthly instalments. In addition to this discount, if you spread out the payments, you will avoid paying a monthly finance or service fee that some companies charge.
Company | Paid in full discount % |
Auto-Owners | 14% |
Progressive | 11% |
Allstate | 9% |
Erie | 9% |
Travelers | 9% |
Farmers | 6% |
Electronic Funds Transfer (EFT) discount
You may be able to get a small discount for using automatic withdrawals if you pay in instalments. The EFT discount can range between 3 and 6 percent.
Paperless discount
You'll receive your policy documents and billing electronically if you're willing to go paperless. The insurance company might give you a small discount. This discount isn't as popular as it once was, as people increasingly prefer paperless systems. We discovered that the average discount is 3%, ranging from 6% with Farmers to 1% with Progressive.
Company | Paid in full discount % |
Farmers | 6% |
Nationwide | 3% |
Allstate | 2% |
Progressive | 1% |
Online quote discount
If you get an online quote and sign up for a policy, some car insurance companies will give you a discount. This can range anywhere from 4% to 12%.
Early bird discount
Shopping around and purchasing a policy before your current one expires can result in a discount. Companies vary in how many days in advance you must purchase to receive a discount, but seven to fourteen days is usually the sweet spot. The discount typically ranges from 2% to 15%.
We discovered that buying 10 days in advance from top companies resulted in discounts as high as 10% with Allstate and as low as 3% with Nationwide.
Company | Paid in full discount % |
Allstate | 10% |
Farmers | 8% |
Auto-Owners | 6% |
Travelers | 6% |
USAA | 6% |
Erie | 6% |
Progressive | 4% |
Nationwide | 3% |
Occupational discounts
You may be eligible for discounts based on your occupation. For example, Liberty Mutual provides special policy features for educators, and Geico provides up to 15% off for military personnel. It's a good idea to check with your insurance agent to see if your job qualifies for a discount.
Alumni associations and professional organizations
College alumni associations, fraternities and sororities, and professional organizations (such as your state's bar association or a union) may fall into this category.
Usage-based insurance program discount
Your insurance provider may provide usage-based insurance (UBI), which adjusts your car insurance rates based on how frequently and well you drive. Data is typically collected using a device connected to your car's ODB-II port or via a smartphone app. Most UBI programs provide a discount for enrolling (usually between 5% and 10%), followed by a discount based on your actual driving habits. Typically, the discount is applied at the time of policy renewal. If you're a good driver, a typical UBI discount could range from 5% to 40%.
Please keep in mind that a UBI discount may not apply to your entire policy.
Examples of Usage-Based Insurance Discounts
Insurance company | Enrollment discount | Safe driving discount |
Allstate Drivewise | Cash back amount varies | Cash back amount varies |
American Family Know Your Drive | 5% | Up to 20% |
Farmers Insurance Signal | 5% | Up to 15% at renewal; up to 10% for young drivers; eligibility to win money rewards for good driving scores |
Liberty Mutual Right Track | N/A | 5% to 30% for the life of the policy |
MAPFRE DriveAdvisor | Yes | Savings calculated after completing the onboarding process and at policy renewal |
Nationwide SmartRide | 10% | Up to 40% |
Progressive Snapshot | Yes | Discount calculated after you complete the program and renew your policy (usually within six months) |
Travelers IntelliDrive | Potential discount calculated based on the first 90 days of the program | Up to 20% at policy renewal |
Safeco RightTrack | Yes | 5% to 30% |
State Farm Drive Safe & Save | Up to 5% | Up to 30% |
Car Insurance Discounts Tips
Car insurance discounts are not always what they appear to be. For example, you might think, "Big savings!" when you see a discount advertised with "up to 40%" off, but that doesn't always mean you'll get 40% off your entire car insurance bill.
Here are some suggestions for cheap car insurance.
Beware of the “up to”
Discounts are typically listed as "up to" a certain percentage. You may not receive that percentage. For example, the greatest discount may be available only to certain classes of drivers.
Some auto insurance discounts don’t apply to your entire bill
Seat belt discounts, for example, may be applied only to medical payments coverage or personal injury protection, because these types of coverage pay for passenger injuries. Discounts for anti-theft devices may apply only to comprehensive coverage, because that is the coverage that pays for car theft.
Some discounts are required by state law
Any insurance company will give you state-mandated discounts. For example, in New York, drivers who complete a defensive driving course and submit a certificate of completion to their insurance company are entitled to a 10% discount on liability and collision coverage for three years.
Discounts can be capped
Although you may be eligible for multiple discounts, the insurance company usually caps the total possible discount percentage. For example, you could accumulate discounts that appear to be 75 percent off your auto insurance (hello, new espresso machine! ), but the total could be limited to 20 percent.
Not all discounts are automatic
You may have to request them, especially if you've had the same policy for a number of years. Your insurance company will not be aware that you installed an anti-theft device in your vehicle or that your student driver has excellent grades. The best way to save money on discounts is to ask your insurance agent to review the available discounts on a regular basis.
Discounts vary by state
A discount mentioned on an insurance company's website may not be available in your state.
Methodology
We used Quadrant Information Services data to find average rates and discounts from each company for a 30-year-old good driver purchasing liability, uninsured motorists, collision, and comprehensive coverage.