Mathew B. Sims is Editor-in-Chief and has authored, edited, and contributed to several books. He has been working in the insurance industry ensuring content is accurate for consumers who are searching for the best policies and rates. He has also been featured on sites like UpJourney.

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Dan Walker graduated with a BS in Administrative Management in 2005 and has been working in his family’s insurance agency, FCI Agency, for 15 years (BBB A+). He is licensed as an agent to write property and casualty insurance, including home, auto, umbrella, and dwelling fire insurance. He’s also been featured on sites like Reviews.com and Safeco. He reviews content, ensuring that exis...

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Reviewed by Daniel Walker
Licensed Auto Insurance Agent

UPDATED: Aug 21, 2020

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Barring a state or two, auto insurance became mandatory in America, and you can’t avoid the cost of premiums, which can get extremely expensive at times.

But you know what most auto owners miss while buying car insurance? The plethora of discount options that insurance companies offer. This guide will help you find auto insurance discounts that can save you money.

How can I get a discount on my car insurance? If you know about the types of car insurance discounts available, you can end up saving a lot of money. But we understand that not everyone has the time to conduct in-depth research about discounts before buying a policy. That’s when having a quick online car insurance quote comparison tool can save you a heap of time!

That’s why we are writing this complete guide on car insurance discounts, and we will also provide expert tips on how you can get discounts from an insurance company. Let’s take a look at some easy ways to cut auto insurance rates!

Ready to find auto insurance discounts and start saving? Compare rates with our FREE tool and find the best policy and provider.

Table of Contents

Understanding Car Insurance Discounts

You might be asking, “Do low auto insurance rates exist anymore?” Maybe you are wondering what can you do if you can’t afford car insurance?

Thanks to the plethora of discounts available today, insurance may be more affordable than you think! But how do you find these “hidden auto insurance discounts?”

Car insurers usually categorize discounts in different buckets for convenience which may vary from one insurer to another. But, most often, discounts on premiums fall within these three categories — your driving history, car safety features, and your policy.

Apart from these categories, insurance companies offer many discounts to auto owners targeted at specific needs or situations, for instance, good student discounts or automated payment discounts.

Who has the cheapest car insurance? Let’s first understand the different types of discounts and how comparing auto insurance can save you money and help you find cheap auto insurance rates.

What are some categories of car insurance discounts?

Car insurance companies offer tons of discount options for auto owners. You must be wondering — why, then, are car insurance rates high?

Apart from your personal factors, actuaries in insurance companies must take into account the external factors in your environment that can lead to accidents, which also ends up raising your rates.

For instance, if you live in a city that has a high auto theft rate or registers regular car accidents, those factors will have an impact on your rates.

But you don’t need to worry about the external factors much, because you can get rewards and discounts for being a good driver or for paying the full premium in advance.

Policy BasedCar Safety FeaturesDriver Safety
Continuous coverage Anti-theft devicesSafe driver
Early signing Anti-lock brakesDefensive driving course
Full payment Green vehicleAccident free
HomeownerNew carLow mileage
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What are some types of discounts & savings?

Always ask your insurance agents about discount auto insurance rates — it would be best if you can ask about specific categories if you think you have a better chance of getting a particular type of discount.

Since insurance companies keep coming up with new types of discounts, it’s best to always stay informed and read a bit about what’s on offer.

Some insurance companies have even offered auto insurance discounts due to COVID-19.

Policy-Based Discounts

These types of discounts are quite specific to your policy and you can easily reduce your premiums by making a few changes in the policy. Policy-based discounts vary a lot between different insurance providers, so keep this in mind while seeking quotes or for comparisons.

Type of DiscountsInsurance Providers that Offer these Discounts
Continuous CoverageAllstate, Esurance, Farmers, Geico, Progressive, Travelers,
Early SigningAllstate, Esurance, Farmers, Geico, Nationwide, Progressive, Travelers, USAA
Full PaymentAllstate, Esurance, Farmers, Geico, Liberty Mutual, Progressive, Travelers
HomeownerEsurance, Farmers, Geico, Liberty Mutual, Nationwide, Progressive, State Farm, Travelers
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Continuous Coverage Discounts

Although we always recommend auto-owners seek quotes before renewing their policy so they get better rates, there’s no harm in taking advantage of customer loyalty discounts from your insurance provider.

If the loyalty discounts help keep your existing premiums lower than the rest of the quotes, then there’s nothing like that deal.

You can save somewhere between 10 – 15 percent if you have continuous coverage with your insurance provider, but the rate of discount varies.

Some insurance companies offer other types of deals for loyal customers, such as accident forgiveness. Progressive, on the other hand, values auto owners who have been continuously insured in the past and assures consumers that they won’t lose out if they switch to Progressive.

How long do you have to be with an insurer to get discounts?

Not every insurer mentions the period of time you need to be with them to get discounts. But some insurers like Amica Insurance clearly state that you have to continuously insure your car for two years with them to get discounts.

Even if the percentage of discount offered by your current insurer is great, it’s recommended to shop around once in a while for better quotes. Insurance companies offer loyalty discounts to retain consumers and you might get cheaper quotes online if you search around.

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Early Signing Discounts

Most of us wait until the last day to renew our auto insurance policy. And when you renew that policy, you check off one more task from the list of all the mundane errands you must take care of during the day.

But did you know you could earn discounts by signing up on a new policy early on?

Many insurance companies want to grab consumers as fast as possible and attract them by offering early signing discounts — expect to earn 10 – 15 percent discounts for renewing a policy before it’s time.

To benefit from this, keep track of the day you must renew your policy to get discounts. Allstate offers discounts to auto owners when they sign up seven days prior to the effective date of the policy.

Full Payment Discounts

Paying your six-month or annual premium in advance may not be always convenient for you, though it can help in reducing your premiums.

Whenever you get online quotes, you will see an option to pay your insurance premium in advance or set up monthly electronic payments — both of which can help you save money on premiums.

In case you’re seeking offline quotes from insurance agents, make sure you ask about the option to pay in full at a discounted rate. In addition to full payment, insurers also offer discounts on other types of payments.

For instance, at Travelers, you will get discounts if you pay your premiums in full, pay through EFT or payroll deduction, and even when you consistently make payments. You can get up to a 15 percent discount if you qualify for one of these payment modes.

Homeowner Discounts

Buying a home doesn’t only bring some stability to your life (according to the boomers), but also helps you get discounts on auto insurance.

During the quote process, you can tell the insurance representative that you own your home and ask if there are any discounts for homeowners. Some companies may offer this as an extra perk for those who are homeowners.

If you show that you are faithful to pay your bills promptly, this will also go in your favor.

Simply put, homeowners are considered less risky than those who hop from one rental unit to another. You can expect to save anywhere from 2 to 10 percent on auto insurance if you own a home.

And it doesn’t matter if you are buying your homeowners insurance from the same provider. For instance, Progressive clearly states that you can save up to 10 percent on auto insurance for just being a homeowner. So, you can see that owning a home affects car insurance as well.

Car Safety Features Discounts

When you minimize the chances of a car accident or theft by installing devices or systems to protect your car, you will get discounts from most of the insurance providers. Anti-theft or anti-lock brakes assure insurers that the possibility of you filing a claim is much lower.

Type of DiscountsInsurance Providers that Offer these Discounts
Anti-theft devices Allstate, Esurance, Farmers, Geico, Liberty Mutual, Nationwide, Progressive, State Farm, Travelers, USAA
Anti-lock brakes Allstate, Esurance, Farmers, Geico, Liberty Mutual
Green vehicleAllstate, Farmers, Liberty Mutual, Travelers
New carAllstate, State Farm, Travelers, USAA
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Anti-Theft Device

Since anti-theft devices can prevent theft and even help in the recovery of a car after theft, insurance companies offer discounts to auto owners for installing these devices.

Specifically, the discounts are offered on the comprehensive auto insurance coverage and can be somewhere between 10 – 25 percent.

The percentage will be applied to the comprehensive premium only, and not the overall premium.

In general, insurers will give you a discount if you have installed devices like theft alarms, ignition cut-off, or an auto-recovery system. An example of a popular auto-recovery system is LoJack.

A LoJack system isn’t necessarily a theft deterrent like many other passive and active alarms that are offered to new car owners.

Instead, it’s a vehicle theft recovery system that’s meant to be used to locate and recover a vehicle after it’s been reported stolen.

The device that’s installed into the car will work with the police to send a signal showing the car’s current whereabouts. Cars installed with a LoJack device have a 90 percent recovery rate.

The percentage of discount can vary depending on the sophistication of the device, but you should keep in mind the cost of the device as well compared to the discounts offered.

For example, a LoJack device will put drivers out almost $1,000. The standard Stolen Vehicle Recovery System has a price tag of $695 for the initial installation. If you buy the advanced program with Early Warning features, you’ll pay $995.

At times, the cost of the device is higher than the actual discount value, so make sure you make those calculations before investing in an anti-theft device. So Lojack does reduce insurance rates, but the down payment on the device may not be worth the savings.

In twelve states — Florida, Illinois, Kentucky, Louisiana, Massachusetts, Minnesota, New Mexico, New York, Pennsylvania, Rhode Island, Texas, and Washington — insurers are required to offer discounts on comprehensive insurance as per the law if a car is installed with an anti-theft device.

Anti-Lock Brakes

Usually, car insurers offer discounts if you own a car with a factory-fitted ABS system. When you seek an online quote, this discount would be applied to your final premium.

If you can’t see any discounts for ABS, you can speak to an insurance agent regarding the same. Discounts for the ABS system are applied to collision premiums because it can protect your car from damages.

Auto owners can save 3 – 10 percent if they have an ABS system in their car. Specifically, Geico offers a 5 percent discount for a factory-installed ABS system.

Green Vehicle

Although electric/hybrid/alternative fuel vehicles are expensive to purchase, you can save money on auto insurance premiums if you own one of those vehicles. There are only a handful of insurance providers who offer discounts for a green vehicle which can range from 5 – 10 percent.

New Vehicle

Some insurance companies also offer discounts on a new car for which the premium is usually steep because of the high cost of repair/replacement. The definition of new differs from one provider to another.

Travelers will offer discounts of up to 10 percent to new car owners, provided their car is less than three years old. Allstate, on the other hand, offers a 15 percent discount if you’re the first owner of a current or previous year car model.

Driver Safety Discounts

Nothing can beat the discounts offered by insurance companies for safe driving behavior. Since safe driving is the most important factor that significantly reduces the probability of accidents, you can save a lot by driving safely.

Type of DiscountsInsurance Providers that Offer these Discounts
Safe driverAllstate, Geico, Nationwide, Progressive, State Farm, Travelers, USAA
Defensive driving courseAllstate, Liberty Mutual, Nationwide, Progressive, State Farm, Travelers, USAA
Accident freeNationwide, State Farm, Geico, Liberty Mutual
Low MileageEsurance, State Farm
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Safe Driver

If you engage in safe driving habits, such as always wearing seat belts, abiding by the speed limits, accelerating/braking slowly, you can become eligible for discounts.

Many insurance companies are also offering usage-based insurance programs so they can track driving habits and reward you for safe driving.

While auto insurance discounts can range from 15 – 30 percent, the parameters to assess driving behavior vary across providers.

Progressive claims that if you haven’t been in an accident or traffic violation in the past three years, your rates would be 31 percent lower than the rest on average.

At Nationwide, you become eligible for better rates if you have driven accident or violation free for at least five years.

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Defensive Driving Course

Taking a defensive driving course from a registered program is one of the most convenient ways to get an extra discount on your auto insurance premium. The best part is you can complete the course online from the comforts of your home. But not all companies count the online courses toward your discount, so check with your agent or carrier first.

Most agents will ask if you have taken a defensive driving course and apply the discounts if you show them proof of completion.

You can get the details of qualifying defensive driving programs in your state through an agent or the website of auto insurance providers. To become eligible for discounts, you can complete the course at any time during the policy period.

The common myth about driving courses is they are for people with poor records.

The fact is, many auto insurance providers offer huge discounts if you complete driving classes. If you decide to take defensive driving class, your company may reduce your rate.

Many states even have classroom training courses as refresher courses. These types of learning modules reinforce positive behaviors and help you recognize the bad ones.

Accident-Free

This is somewhat similar to safe driver discounts. When you drive accident-free for a certain period of time, you’re eligible for more discounts. Insurance providers either club this with safe driver discounts or offer it separately to reward auto owners who haven’t been in an accident in the past.

You can also become eligible for accident-free discounts during the policy period after you have met the requirements. There is also an accident-free discount known as a No Claim Bonus for car insurance (NBC). While No Claims Bonuses and accident-free discounts are similar, they are not exactly the same thing.

While the accident-free discount is strict enough on its own, the No Claims Bonus has even stricter guidelines.

Not only do you have to be accident-free, you can’t file any type of other claims against the policy for the savings. To be eligible for this discount, you can’t have filed a claim against your own insurance and there can’t be any third-party claims presented by others as well.

New applicants for coverage also won’t qualify for the NCB during their first term.

Low Mileage

Driving a lower number of miles regularly means less exposure to risks on the road which translates to discounts on auto premium. When you seek a quote, either online or through an agent, you will always be asked about your estimated annual mileage. Discounts are applied at this stage if you drive less than the average miles.

You can see the difference in rates below for different mileage in the state of New York.

Insurance Providers10 miles commute/6000 annual mileage25 miles commute/12000 annual mileage
Allstate$4,675.15$4,806.77
GEICO$2,358.45$2,498.03
Liberty Mutual$6,354.63$6,726.83
Nationwide$4,012.93$4,012.93
Progressive$3,771.15$3,771.15
State Farm$4,322.30$4,646.86
Travelers$4,578.79$4,578.79
USAA$3,723.73$3,799.64
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Although the rates aren’t significantly lower for those driving fewer miles, you can still take advantage of the lower premium if you don’t use your car for regular commute or work from home. Insurers will probably classify your car as a pleasure vehicle if this is the case.

A pleasure vehicle is determined by the number of miles you drive it on an annual basis. Driving less than the limit for pleasure mileage means you most likely qualify for auto insurance discounts!

Most companies use the 7,500-mile benchmark. If you drive the car less than that, it’s considered pleasure; if you drive the car more that, you’re billed a higher premium.

A pleasure vehicle might be used sporadically, or you may drive it daily. The difference is that you don’t drive it very far even on a daily basis, maybe to the commuter parking lot or the train station to catch mass transit to work.

Other Types of Discounts

Apart from the above-mentioned categories of discounts, there are other types of discounts, as well, which can’t be put into specific categories or are a different version of the discounts we discussed. Let’s look at what other discounts you can get.

Multi-Policy Discount

If you have insurance needs other than car insurance, you can bundle all the policies and buy from one provider to get discounts. The most common bundling options are home plus auto. You can save anywhere from 10 – 20 percent on auto insurance if you bundle your policies.

You can ask your insurer about the bundling options they provide so you can save more on insurance. Progressive offers many bundling options to users such as auto + boat, motorcycle + boat, boat + RV, etc.

Since you either own a home or rent an apartment, you always have the option to bundle your homeowners or renter’s policy with auto insurance.

Multi-Car Discount

Is it cheaper to put two cars on one policy? If you have multiple cars in your home, you should try to get coverage for all the cars from one insurance provider. Most insurers will offer a significant discount on coverage for multiple cars belonging to one family, but some insurers also offer discounts when roommates insure their car together.

To receive a multi-car discount, every driver need only have the same address, since the location is a primary factor in issuing rates.

You can list anyone on your car insurance policy that resides in the same home, even a roommate.

The majority of car insurance providers offer a discount of 15 percent when you add an additional driver and if they remain on the policy, pay their bill on time, and refrain from filing any claims, many will provide an additional 5 percent every year they renew.

For instance, Progressive offers as much as 12 percent discounts when you add more than one car to a policy which might belong to anyone in the house as long as it’s parked at the same address.

Student Away Discount

Adding a teenager to your policy immediately spikes your auto insurance rates because young drivers are considered risky by insurers. But, when your kids move to college, you can get discounts on your coverage because they wouldn’t be driving your car as much.

Check the conditions you must meet to get the discounts. At State Farm, you are eligible for discounts if your children under the age of 25 (who also drive your car) move away for college and only drive your car during vacations and holidays.

Some insurers also mention the distance of college from home to determine eligibility for discounts.

Mature Driver or Senior Discount

If you have been driving for a long time, you could earn some discounts on auto insurance. Auto owners over the age of 50, or seniors, are offered discounts by some insurers because they are usually safe drivers and have different needs than young people.

If you think you could be eligible for senior discounts, you should talk to your agent before buying a policy.

Allstate offers a 10 percent discount to auto owners above the age of 55. You can also consider completing the Mature Driver Improvement course to get more discounts from insurers.

Passive Restraint Discount

Passive restraint discounts are offered to auto owners who have in-built security features in their cars, such as automatic airbags and seat belts.

Having these features in your car significantly reduces the chance of injuries that you might sustain in an accident, thereby bringing down the financial costs that an insurer would have to reimburse.

Passive restraint features can help you in getting around 30 – 40 percent discounts from some insurers. So if you have spent your money on a luxurious, ultra-safe car, go for those discounts.

Paperless/E-Bill Discount

Going paperless has more advantages than just saving the environment around you. If you choose to receive your policy documents by email, your insurance provider will offer you a discount. It’s usually not very high, but everything adds up.

Garaging Discounts

Can I get a discount on auto insurance if my car is in storage?

It’s best to ask your provider if they provide a garaging discount. Many companies offer this kind of discount for classic vehicles, military personnel, and more general scenarios, so ask and be clear about your situation.

Some of may wonder why not just terminate coverage? Well you might be able to do this but it’s risky.

Some states will allow you to completely terminate your auto insurance coverage if your car is being stored.

“Stored” means to the insurance company is that your vehicle is housed in a locked facility. Having your car on the street corner or in your garage doesn’t usually qualify as being stored.

If you are in a state where you can cancel your insurance, then you will need to hand in your plates to the DMV because they will need proof that your vehicle is not going to be driven.

If you are in a state that still requires some sort of insurance on your vehicle, you may still be able to cancel the liability coverage of on your car.

But you would still need to hand in your tags to the DMV because your vehicle wouldn’t have the minimum required liability insurance in order for your car to be allowed on the road.

Finally, some of you may also be wondering . . .

Will my homeowner’s insurance cover my stored vehicle if it’s not insured?

If you are able to completely strip away all the auto insurance on your stored car then you will be on the hook for any and all damages to the vehicle.

Any possessions in the vehicle will be covered by homeowner’s insurance, but not the car itself.

The options some storage facilities have is to provide insurance for your car if it is stolen or damaged while in their possession.

Moreover, some auto insurance providers have similar auto storage coverage for those who want to make sure any damages or theft upon their automobile is covered.

What are usage-based insurance program discounts?

Insurers have been offering discounts to safe drivers for a long while now. But usage-based discounts allow them to use technology to track your driving behavior.

Now, this isn’t a bad thing, as some motorists like to claim, because it can accurately assess your driving habits and reward you accordingly.

Here’s an interesting video on how the world of connected devices is helping insurers offer usage-based insurance to auto owners.

So, what exactly is usage-based insurance?

Usage-based insurance, known commonly as pay-as-you-drive or pay-how-you-drive, are discount programs offered by many leading providers where your driving data is collected through an installed device or mobile app.

When you complete a certain amount of time enrolled in the program, your driving habits are assessed against the set parameters and necessary discounts are applied, if eligible.

With the popularity of telematics devices and the ease of tracking driving data, a large number of insurers have introduced their usage-based insurance programs and offer discounts on enrollment.

Insurance CompanyProgramDeviceEnrollment Discount (Up to)Earned Savings (Up to)
AAAAAADriveMobile App15%30%
AllstateDrivewiseMobile App10%25%
American FamilyKnowYourDrivePlug-in5%20%
EsuranceDriveSenseMobile App5%30%
Liberty Mutual/SafeCoRightTrackMobile App or Plug-in5% and up30%
MetLifeMy JourneyPlug-in10%30%
NationwideSmartRidePlug-in10%40%
ProgressiveSnapshotMobile App or Plug-inAverage of $26Average of $145
Mile AutoMile AutoNeither-40%
State FarmDrive Safe & SaveMobile App or Plug-in5%30%
The HartfordTrueLanePlug-in5%25%
TravelersIntelliDriveMobile App10%30%
MetromileMetromileMobile App-60%
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If you want to get some discounts, you can do so instantly by enrolling in a usage-based insurance program. And, if you’re a safe driver, you can get more discounts after the completion of a stipulated time under the program.

With most of the insurance providers, you can save from 20 – 30 percent under their usage-based program. In fact, Metromile offers a discount of up to 60 percent.

Every insurance company has its own set of parameters and assessment criteria for the usage-based insurance programs, so it’s recommended to know about those before enrolling in the program. You can also look at the details below for the usage-based insurance programs of leading insurers.

Drivewise (Allstate)

In Allstate’s Drivewise program, you can earn up to 10 percent cash back for signing up and up to 25 percent cash back for safe driving every six months.

How can you earn cashback under the program:

  • By keeping your speed limit below 80 mph
  • By reducing your late-night drives
  • By avoiding hard braking incidents

You can download the Allstate mobile app to enroll in the program and see your details.

RightTrack (Liberty Mutual)

Liberty Mutual promises auto owners can save up to 30 percent with the RightTrack program, which they will retain for life. Along with the savings for safe driving, motorists can save money by signing up as well.

Specifically, RightTrack monitors driving data related to acceleration, braking, nighttime trips, and your mileage.

How does the program work?

Motorists need to be enrolled in the RightTrack program to become eligible for rewards. Once you’re enrolled in the program, you have to download the RightTrack app.

  • When you connect your account in the RightTrack app, a telematics device would be sent to your address, which will track details like trip reports, savings, and will even give driving tips.
  • You will need to connect the device with the app and drive with the tag for 90 days.
  • After 90 days, your discounts will be calculated and applied to your premiums. Expect to earn anywhere between 5 – 30 percent.

Smart Ride (Nationwide)

With the Smart Ride program, you can save up to 10 percent for signing up and up to 40 percent for safe driving. Smart Ride tracks four driving patterns — miles drive, hard braking and acceleration, idle time, and nighttime driving.

How does the program work?

Nationwide sends a telematics device that measures driving trends over time, and you can check all the details online. After the end of the program (ranging from four to six months), you have to send back the device and get a final discount that’s applied to your next premium payment.

Nationwide clearly mentions on their website that they don’t increase your premiums and Smart Ride is just a discount program.

Which cars are eligible for the program?

All cars manufactured after the year 1996 can be enrolled in the program; however, some diesel-fueled and hybrid cars aren’t compatible.

Snapshot (Progressive)

As soon as you visit the Snapshot details page on the website of Progressive, you will see their claims about how much they have handed out in discounts through the program. Unlike others, Progressive offers a 30-day trial of their program.

Interestingly, they also mention that, on average, motorists earn a discount of $145 with Snapshot. That’s quite a claim.

How can you enroll in the Snapshot program?

With Snapshot, you have the option to either choose a mobile app or plug-in device to track your driving behavior. In some states, the mobile app option isn’t there, so you must use a plug-in device.

Ways to maximize discounts with Snapshot

  • Avoid hard braking and acceleration. Your plug-in device beeps when you slam the brakes, so fewer beeps would translate to bigger savings.
  • Between 12 p.m. – 4 a.m., avoid driving as much as possible.
  • You can save more by driving less or carpooling with others.
  • Stay away from texting or calling or browsing social media.

Your discounts are applied at the end of the program when you renew your policy which is usually six months.

Drive Safe & Save (State Farm)

If you enroll in the usage-based program of State Farm, you could earn up to 30 percent in discounts by being a safe driver. State Farm offers motorists the option to choose between a mobile app and OnStar to track their driving behavior.

If you select the Drive Safe & Save app, you will be sent a Bluetooth beacon device that will track your driving pattern. What data does State Farm use to calculate your discounts?

  • Annual mileage
  • Braking
  • Speed
  • Time of day when you drive
  • Acceleration
  • Fast cornering

You can also enroll your OnStar enabled vehicle in the Drive Safe & Save program to earn discounts. You can call State Farm at 888-466-7827 for more details on OnStar.

Metromile

Metromile offers insurance to motorists on a pay-per-mile model and intends to make coverage affordable for everyone. If you drive less, you pay less for auto premiums.

According to Metromile, auto owners can save as much as $741 per year by buying coverage from them.

Unlike the usage-based programs of other insurance providers, Metromile’s business model is based on usage, which is why motorists can save a lot of money if they drive less.

How does Metromile measure your mileage?

The company installs a small device, Metromile Pulse, to measure the miles driven by motorists. After calculating your mileage, your auto premiums are determined.

How do discounts impact your insurance rates?

The history of car insurance goes far back to the year 1897 when the first automobile liability policy was sold.

Over the years, insurance companies have modified their policies and included many scenarios that were unimaginable earlier, for instance, damage to your windshield from a drone hit. Laws and regulations have also evolved in these years.

Because of the availability of data from all these years, insurance companies are now able to accurately price policies as per the risk profile of an individual auto owner.

And due to continuous research and information availability, insurers understand that certain driving habits minimize or maximize the probability of an accident or traffic violation. As a result, they offer discounts when auto owners meet certain parameters such as low mileage.

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Which Car Insurance Companies Offer the Maximum Discounts

Now that you know about the types of car insurance discounts, you must be curious about which discounts are offered by different insurance companies. Because every provider has a different set of discounts, how much you save on your coverage can greatly vary from one insurer to another.

Before seeking quotes, you should be aware of the discounts offered by specific providers so you can negotiate your car insurance with your agents better and take advantage of everything available for you.

What are the discounts offered by insurance companies?

To give you an idea about which companies offer the maximum options for discounts and how much you can save, we have collated the details in the table below.

Best Auto Insurance Companies
Insurance CompanyTotal Number of DiscountsHighest Percent DiscountBest forOur Company Review
Allstate2945%Usage-based and
pay-as-you-drive
policies
Allstate Review
American Family2740%Best value in
coverage level
and 60+
American Family Review
Farmers345%Married and
longer commute
Farmers Review
Geico3140%Teen drivers and
those with a speeding
ticket or accident
Geico Review
Liberty Mutual3835%Vehicle recovery
system discount
Liberty Mutual Review
Nationwide3540%Teen drivers and
best value in
coverage level
Nationwide Review
Progressive3631%Poor credit and DUIProgressive Review
State Farm1950%Poor driving record
and 60+
State Farm Review
Travelers2830%Middle-aged drivers
and poor credit
Travelers Review
USAA2815%Military
(especially if single)
USAA Review
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We have presented information about the leading providers in America, but you should also check the rates and discounts of local insurance companies, as they might have a better rate because of lower operational costs.

Let’s look at what discounts are offered by these providers.

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Allstate Insurance

Although the rates at Allstate are comparatively higher than other insurers’, you can get a plethora of discount options with them.

On their website, they highlight new car discounts, multi-policy discounts, and smart student discounts. You can see below all the other types of discounts they offer.

  • Anti-lock brakes: You can earn up to 10 percent discounts when your car is equipped with anti-lock brakes.
  • Anti-theft technology: For an anti-theft device, you can earn up to 10 percent.
  • New car: If you’re the first owner of your car, which is a current or previous year’s model, you can save up to 15 percent on your policy.
  • Multi-policy: Bundling policies can get you some discounts at Allstate. Buying both auto and home insurance will lead to savings of up to 10 percent on your auto policy.
  • Smart student: Teen drivers are eligible for discounts if they meet one of these criteria: they’re full-time students with good grades, have completed the teenSMART® driver education program, or attend school at least 100 miles away from your house.

Apart from these above-mentioned discounts, you can save with early signing discount, responsible payer discount, automatic payments discounts, paperless discount, full payment discounts, and safe driving club discounts at Allstate.

Farmers Insurance

Since discounts can vary from state to state, Farmers lets you choose your state on their website to see what options you have, which is very convenient for auto owners who want to buy coverage. Their discount options are categorized into four buckets.

  • Discounts for the family: Includes savings when you can bundle policies and cars to get discounts.
  • Planning ahead discounts: If you own a hybrid or electric car, pay your full premiums in advance, or are a homeowner.
  • Classroom discounts: Taking an accident prevention course and being a good student.
  • Defensive driving discounts: Protecting your vehicle with anti-theft devices, anti-lock braking systems, VIN etching, daytime running lights, etc. can get you discounts.

 Geico

Geico offers a massive list of discounts to match the profile of different types of auto owners, which makes them an affordable option for coverage, offering NC auto insurance discounts as well as in most of the states.

Their discount options are categorized into five buckets – vehicle equipment, driving history & habits, driver’s education, driver affiliations, and customer loyalty.

Here’s how much you can save with discounts at Geico. The options mentioned in this table are just a fraction of discount options at Geico.

Type of DiscountPotential Percentage of DiscountsCategory
Air Bag25% (driver side), 40% (full-front seat)Vehicle Equipment
Anti-Lock Brakes5%Vehicle Equipment
Anti-Theft System25%Vehicle Equipment
Daytime Running Lights1%Vehicle Equipment
Good Driver26% (five years accident-free)Driving History & Habits
Seat Belt Use15% (medical or PIP portion)Driving History & Habits
Good Student15%Driver's Education
Emergency Deployment25%Driver Affiliation
Federal Employee (Eagle)8%Driver Affiliation
Military15%Driver Affiliation
Multi-Vehicle25%Customer Loyalty
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Geico also offers a lot of options to save money if you are affiliated to certain professional organizations such as military personnel, federal employees, membership to their list of organizations, and emergency deployment discounts.

Liberty Mutual

Liberty Mutual categorizes its discount in four buckets: your personal factors, your driving, your car, and policy level discounts.

  • Personal factors: There are different types of options under this, such as homeowners, military, good student, and student away discounts. The best is if you sign up before your policy expires because you can save up to 45 percent.
  • Your car: Advanced safety features, anti-theft devices, and alternative fuel can get you discounts on coverage.
  • Your driving: Staying accident or traffic violation free can save you money on coverage. If you enroll in the RightTrack usage-based program, you can save up to 30 percent.
  • Policy level: This depends on how your policy is designed, so if you bundle multiple policies or cars, pay in full, choose paperless documentation, buy online, and enable automatic payments, you can earn discounts.

Progressive

When you switch to Progressive from another insurer and have never been in an accident, you can save up to $699 per year on average.

When you move through the online quotes system of Progressive, you will be asked questions to determine what discounts you’re eligible for, and those will be applied to your final premium in the end. Even then, don’t forget to ask for more discount options.

Here are the different categories of discount for auto owners at Progressive:

  • Loyalty-based: Being insured with Progressive continually will, over time, help you in saving on coverage, as well as bundling different policies or cars with them. For multi-policy discounts, Progressive offers a ton of options to bundle different products, and you can save up to 5 percent on average.
  • Driver-based: Usage-based, teen driver, good student, distant student, and homeowner discounts are some of the options in this category. Enrolling in their safe driving program can save you $145 on average.
  • Quotes and payments-based: Depending on what options you choose while seeking a quote or making payments, you can get discounts. Getting online quotes, signing online, making full or automatic payments, and opting for paperless documentation can save you money.

State Farm

To help you make the most savings, State Farm features two discounts on its website — Drive Safe & Save and Steer Clear. Both these options promote safe driving amongst motorists and use telematics technology to track your driving behavior.

Steer Clear is specifically designed for drivers under the age of 25.

Other than those two featured discounts, there are many types of discounts at State Farm.

  • Safe Driver: The featured discounts are specifically applied when you enroll in the usage-based programs. However, if you haven’t been in an accident for three continuous years, completed a defensive driving course, haven’t had moving violations, and/or get good grades, you qualify for safe driver discounts.
  • Safe Vehicle: Having the latest safety features in your car or owning a new car can get you discounts.
  • Loyalty: Choosing State Farm for all the cars in your household or buying a different line of insurance along with car insurance can help you in saving on coverage.

Are there car insurance discounts for students?

Car insurance for drivers under the age of 25 tends to be significantly expensive — because their inexperience with driving poses a higher risk to insurance providers. Whenever you add a young driver to your policy, your premiums shoot up.

So, what can you do to prevent insurers from raising your premiums exorbitantly?

Firstly, you should inculcate safe driving habits in your children so that they remain accident- and violation-free. Nothing increases rates for young drivers like at-fault accidents or traffic violations.

Secondly, you should be aware of all the discount options that your insurer offers for students. Let’s jump into those.

Good Student Discounts

Almost all insurers offer discounts if you’re a good student, which usually translates to regularly attending school and getting good grades.

Each insurer has its own criteria for assessing students, but maintaining B-average grades can get you discounts. Students who have other credentials, such as high SAT scores and awards, can get better rates.

Driver’s Education Program

Completing a driver’s education program doesn’t only ensure you will be more cautious and vigilant on roads but also help you in getting discounted rates from insurers.

Many insurance providers offer their in-house driver training programs, which can be completed online to get discounts.

Student Away Discounts

When you move to a college/university that is far from your house, you can get discounts on car insurance because you will rarely use the car to drive. Usually, the distance between the home and college should be around 100 miles to get this discount.

Alumni/University Discounts

Studying in certain universities can help you in saving on car insurance, though not all universities are in the list of insurance providers. But, if you are going to a coveted university, you should ask your insurance provider about discounts.

Are there car insurance discounts for military personnel?

Most insurance providers offer discounts to members of the U.S. military and their family members. If you’re looking for cheaper rates online, you should try getting coverage from USAA, which only offers insurance coverage to the members of the military and veterans.

Insurance providers like Esurance, Geico, Liberty Mutual, Metlife, and Safe Auto offer discounts in the range of 15 – 25 percent to military personnel. You can find one of these following discounts with the insurance providers:

 Military Discount

Whether you’re in active duty or retired from the U.S. Army or the National Guard, you may be eligible for discounts. Your family members can also get discounts on car insurance. Geico offers a military discount of up to 15 percent on your insurance premiums.

Membership Discount

If you’re part of associations or groups such as the Navy League of the United States or American Society of Military Comptrollers, then you can get discounts from insurance companies.

Emergency Deployment Discounts

A few insurance companies also offer discounts when active military members are assigned duties in extremely dangerous areas on emergency. Such assignments are ordered by the Department of Defense (DOD).

Ways to Lower Your Auto Insurance Cost

Just knowing about these different types of insurance discounts isn’t enough — you have to ask your agent time and again for any more options or anything new that an insurer has introduced which might lower your rates.

For instance, many auto owners aren’t aware they can get discounts by merely setting up automatic payments for their insurance. You’re going to pay for your auto insurance premium anyway, so why not set up a monthly payment from your bank account or credit/debit card?

So the first rule of buying car insurance is to always ask for all the discount options multiple times.

Let’s look at the other tricks that you can follow to lower your rates as much as possible.

Seek New Rates Every Year

It might seem like a headache every year to seek a quote, especially when you’re happy with your insurance company, but it can save up a lot of money.

Unless you aren’t bothered about your rates, you should connect with a couple of insurance providers to see what rates and discounts they are offering. Many companies would be happy to get your business from one of their competitors.

Insurers will try to use price as their competitive advantage over other auto insurers.

Promotions are one of the most utilized tools to reduce prices. New customer promotions are quite common; special deals enticing customers to switch without having to wait until the end of their current policy is widely increasing.

Auto insurers competing for your business may also offer discounts for insuring multiple vehicles on one policy, covering students, or discounts for automatic payment withdrawals.

Also, if there has been a major life event, like a marriage or homeownership, which can lower your rates, you should look for a provider that offers big discounts for those specific profiles.

How do I get a free auto insurance quote?

Every company has a different process, but cheap car insurance quotes are readily available on the Internet. Enter the term “free online car insurance quote” in the search engine you choose. You will find a list of auto insurance prices and advertisements.

Most companies will advertise that free quotes are available on their website. Before you start your quote, you need to gather the following pieces of information:

  • Name, date of birth, license numbers, and addresses for all drivers
  • Driving records for each driver
  • Year, make, model of all the vehicles you own
  • Limits of liability desired
  • Suggested limits of liability for insurance

Just make sure the insurer is legitimate before entering your information. There are, unfortunately, some websites out there that only want to get your personal information so they can spam you.

Called “phishing,” this practice is a violation of your privacy. Check how much information a particular site asks for in order to get a quote.

If they want sensitive information like a bank account number just to get a quote comparison, you may not want to use that website, as it could be a phishing attempt.

After you get your quote on a legitimate website, it’s important to remember that price is not the only factor you should consider.

There is also a customer service side to comparing insurance quotes that you need to keep in mind as well.

As part of your comparison process, be sure to also look for review websites that will give you first-hand accounts of what real customers think of the service provided by each insurance company. Before you sign up with a smaller company, do your research and check with the Better Business Bureau in your state to see if there are any complaints with the company.

You should also choose a company that has been open for at least five years to make sure that the company will continue to stay open while you have a policy there.

Once you have your quote, don’t’ wait too long to compare. A quote is an estimate. In most industries, when you’re getting an estimate to buy a product or have labor performed, the amount that you’re quoted is only guaranteed for a limited period of time.

How long you have to make a decision will be detailed on your estimate.

While some companies will honor the quote that you were given for a few days or a week, most carriers don’t guarantee that the rates will be the same if you don’t apply at that very moment.

This is why it’s important to shop for auto insurance when you’re serious about switching to a new carrier.

Buy an Old Car

Car insurance rates are specifically high for new and luxurious cars because it’s expensive to repair or replace parts for newer or expensive car models.

If the only thing that matters to you about a car is its ability to take you from point A to B, try buying a no-fuss old car. This way you will not have to spend a fortune on collision or comprehensive insurance.

You might not even need collision or comprehensive insurance if you think that you can get your car repaired at a much cheaper price than what insurance would cost you.

Find out how much it costs to replace your car. If the coverage is more than 10 percent of the value of your car, drop collision and comprehensive coverage. It is not worth insuring a car that is not as valuable. You will pay more for the insurance than to replace it.

Bundle Your Policies

Most people either have multiple cars in their household or at least have a homeowners or renters insurance. It would help if you have the same insurance provider for all your coverage needs to benefit from bundling discounts.

You might think that buying from the same insurance company would lead to higher costs, but it usually saves you a lot of money. Simply put, if you add your home insurance or any other type of coverage, like a boat or Recreational Vehicle, also known as an RV to your current car insurance policy, you can receive as much as 25 percent off your annual premium.

Bundling is an excellent way to capitalize on more than just lower rates too. They help you manage your deductible amounts.

For example, if your homeowner’s insurance deductible has a $2,500 deductible and your vehicle has a $1,000 deductible and you need to file a claim for damages done to both due to an unforeseen event, most insurance companies will only charge one amount.

Of course, it is usually the higher amount, but you can see how this saves you money. If you kept your car insurance separate from your homeowner’s insurance, you would need to pay both deductibles.

Instead of paying $3,500, you are only required to pay $2,500. That is still a good amount of savings, on top of the percentage discount that is applied to your annual premium.

Bundling is also a great way to keep your finances in order. You only receive one bill each month and can make just one payment for both.

In addition, many customers who choose the bundle option tend to stay with their provider for a longer period of time.

If they decide to leave, they must look for a competitor who offers comparable rates, discounts, and deductible options.

By now, you’re aware of the different categories of insurance discounts and can think of something based on your profile that would save you money. Never be shy about asking for discounts from your insurance agents because they’re bound to divulge the information to you.

You can also bookmark this page for future reference whenever you plan to seek a quote on your car insurance or switch over to another insurance company. By the way, you can switch over anytime during the policy period and barring a few companies, you will not be charged a penalty.

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Types of Auto Insurance Discounts

  • There are plenty of car insurance discounts to choose from
  • Multi-vehicle discounts is one of the most common discounts offered
  • You can also bundle all of your insurance needs to save money
  • A clean driving record also makes you eligible for discounts

One of the most common ways to cut auto insurance rates is often with discounts.

The auto insurance companies may be out to collect your coin, but you can keep as much of that coin in your pocket by asking about particular discounts.

Of course, the biggest cheap auto insurance “trick” is to simply use the Internet to shop around and compare auto insurance rates online from competing insurance companies.

Simply enter your ZIP code in on this page and start comparing affordable quotes now!

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Multi-Vehicle Discounts

This is possibly the most common auto insurance discount.

You get this when you insure two or more vehicles on the same policy.

This makes administrative work easier for the insurance company while keeping your premiums low.

Bundle Policies

Multi-line discounts apply when you group several policies together.

You may have renters insurance, auto insurance, boat insurance, and motorcycle insurance by different providers.

Grouping all these insurance types under one company can get you a rather hefty multi-line discount and save you a pretty penny.

Anti-Theft

Many vehicles now come with some sort of theft-deterrent system. For some vehicles, this is a tracking device that a company can activate to find your vehicle, on

For some vehicles this is a tracking device that a company can activate to find your vehicle, on others, it is simply turning the vehicle off after so many miles if it was hotwired.

This discount is rather specific for each auto insurance company, so make sure you ask about it and if your vehicle meets the requirements.

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Winter Tires

Those of you who are prepping for winter storms may see a benefit to hitting your local tire store as well.

Winter tires go a long way to providing traction when traction is limited, and auto insurance companies recognize this.

You should consider winter tires either way, but a discount on your insurance only sweetens the deal.

Winter tires go a long way to providing traction when traction is limited, and auto insurance companies recognize this.

You should consider winter tires either way, but a discount on your insurance only sweetens the deal.

Preferred Parking

Yup, you can really get a discount based on your parking. Think of it these ways, the auto insurance company would much rather not have to pay for someone running into your vehicle in an apartment parking lot.

Think of it these ways, the auto insurance company would much rather not have to pay for someone running into your vehicle in an apartment parking lot.

If you have private parking or some other form of secured parking, you may be eligible for a discount on your auto insurance rates.

Low Mileage

Those of you who drive very little may want to stop into your agent’s office and go over your yearly mileage.

The average American driver puts on roughly 12,000 miles a year. 

If you happen to fall well below this average, you may be eligible for a discount.

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Retiree

After working for so many years it is about time you get a break.

If you can qualify for things like a senior discount on movie tickets, you might just qualify for this auto insurance discount, too!

Some insurance companies offer retirees discounts on their auto insurance rates.

Just keep in mind these are different from elderly discounts – a “retiree ” might have made enough money at quite a young age to not need to work again.

Safe Driver

Safe driver discounts come in if you have never had to file a claim due to an accident. You can also be eligible for this discount if you have taken a drivers safety course.

This is the insurance companies’ way of saying thank you for driving safely.

You can be eligible for this discount if you have taken a driver’s safety training. This is the insurance companies’ way of saying thank you for driving safely.

This is the insurance companies’ way of saying thank you for driving safely.

Good Driver

Not to be confused with the safe driver discount, good driver discounts go to those who don’t deal with the law.

These discounts apply to those folks who don’t acquire speeding tickets or other types of tickets due to breaking the laws of the road.

Talk with your auto insurance agent and see what discounts you may be already eligible to receive, or what changes you might make to qualify for them.

Keep in mind that many of these discounts all stack on top of one another.

Thus, you can save some serious money with just a few discounts in place.

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The Top 3 Discounts that Make Lower Auto Insurance Premiums Possible

  • Every auto insurance provider offers car insurance discounts
  • On average, most households own more than one car
  • The majority of car insurance providers offer a discount of 15 percent when you add an additional driver

The automobile insurance industry has a multitude of discounts they provide for new and existing customers, but these three top the list. More than likely, this is because they are the most attainable for all types of consumers, especially the multi-car discount.

The Bureau of Labor Statistics confirms the national average for vehicles per household is 1.9 percent, which means almost every couple owns their own car.

In reviewing this information, it only makes sense that the multi-car discount would be the most popular out of all of the discounts auto insurance companies offer.

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Multi-Car Discount

The multi-car discount is the number one way auto insurance companies lower your annual premium. However, it is also the one discount that confuses most consumers. Many believe that they can only qualify if the additional driver or drivers are family members.

This is far from the truth. To receive a multi-car discount, every driver need only have the same address, since the location is a primary factor in issuing rates.

You can list anyone on your car insurance policy that resides in the same home, even a roommate.

The majority of car insurance providers offer a discount of 15 percent when you add an additional driver and if they remain on the policy, pay their bill on time, and refrain from filing any claims, many will provide an additional 5 percent every year they renew.

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The Bundle Discount

The bundle discount is another extremely popular discount that many car insurance companies are offering to their customers.

Simply put, if you add your home insurance or any other type of coverage, like a boat or Recreational Vehicle, also known as an RV to your current car insurance policy, you can receive as much as 25 percent off your annual premium.

Bundling is an excellent way to capitalize on more than just lower rates too. They help you manage your deductible amounts.

For example, if your homeowner’s insurance deductible has a $2,500 deductible and your vehicle has a $1,000 deductible and you need to file a claim for damages done to both due to an unforeseen event, most insurance companies will only charge one amount.

Of course, it is usually the higher amount, but you can see how this saves you money. If you kept your car insurance separate from your homeowner’s insurance, you would need to pay both deductibles.

Instead of paying $3,500, you are only required to pay $2,500. That is still a good amount of savings, on top of the percentage discount that is applied to your annual premium.

Bundling is also a great way to keep your finances in order. You only receive one bill each month and can make just one payment for both.

In addition, many customers who choose the bundle option tend to stay with their provider for a longer period of time.

If they decide to leave, they must look for a competitor who offers comparable rates, discounts, and deductible options.

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Safe Driving Discount

The safe driving discount is a two-fold discount that applies to the driver’s habits behind the wheel as well as the safety features associated with their vehicle since safety features are an asset to avoiding collisions.

In fact, the National Highway Traffic Safety Administration sent a report to Congress explaining how technology plays a pivotal role in the number of reported accidents on an annual basis.

Fewer crashes, especially life-threatening collisions have been successfully decreased with the new onboard computers and detection devices that many vehicles are now equipped with, especially luxury models and SUVs.

If you qualify for the safe driving discount, you can save up to 30 percent on an annual basis. The process is simple. You contact your provider and request the reduction by agreeing to install a small device in your car.

They monitor your progress for approximately six months to determine your driving habits.

If, after the specified period ends and you have not been involved in any risky behavior, they apply the discount. Some may add the discount a little at a time and others may require you to complete the full term. It is always important to note that you must be an experienced driver with at least three years behind the wheel to qualify in most cases.

It is always important to note that you must be an experienced driver with at least three years behind the wheel to qualify in most cases.

Another way many car insurance companies are rewarding safe drivers is through their deductible.

Rather than applying a percentage discount for driving safely, they are taking a different approach. These auto insurance providers will decrease your deductible a certain amount each year that you refrain from filing an accident claim.

Over time, your deductible can reduce to zero, which means if the unlikely collision were to occur, you would not be responsible for any out-of-pocket expenses.

Other Ways to Lower Auto Insurance Premiums

In addition to the discount programs that all auto insurance providers offer, there are many other ways you can successfully lower your car insurance premiums.

Start with the level of coverage you have. Everyone must maintain the basic level of liability insurance this is the law in every state. But, do you really need comprehensive or collision?

Are you paying for full coverage on a vehicle that is well over five or six years old?

Habit can cause many consumers to overlook these questions and continue to pay for coverage they may not need.

This means you should change your old habits and adopt new habits, including reviewing your car insurance premium before you sign up for renewal.

If you need the facts regarding what your state requires, you can find the information by going to the Insurance Information Institute. This free resource provides information about your responsibility regarding car insurance, in accordance with state laws as well as your financial obligations.

Never drop coverage until you know what your state deems necessary.

This is especially true for those who do not own their vehicles. If your car is a lease or if you are making payments and a financial institution has the title, you may need to keep a specific level of coverage until they send you the ownership papers.

Once the car is yours, you may be able to make the changes.

Verify Your Credit Score

Times are changing rapidly and more auto insurance companies are looking at individual credit histories as a way to determine risk. They want to make sure you are managing your finances correctly. If you recently increased your credit score by making positive changes to your lifestyle, they need to know.

You are entitled to receive an annual credit report every year, free of charge. Take advantage of this and retrieve yours right away. Study the details and if necessary, pair your credit report with your credit score.

A score over 700 reveals a lot, especially if your credit score was lower in the past.

If you can convince your auto insurance company that you are a good risk, you may see a significant decrease in your annual premium.

This is one of the best ways to be proactive with your finances and save money at the same time.

Considering they want low-risk customers, you will actually help reduce your rates and boost their customer-base simultaneously.

Comparison-Shopping is Always Recommended

While everyone has probably heard that comparison-shopping is one of the best ways to lower their auto insurance premiums, many may not know where to start. The truth is, it is not that difficult and takes very little time.

Start by gathering a list of reputable companies. Verify certain aspects of each, like how they rate by their customers in fields like, customer service, price, and overall value.

Check their offers on their websites and match them with what fits your needs. Solicit advice from your family or co-workers and friends to get a current and unbiased perspective.

When you speak to the representative, let them know you are interested in their products and see how well they respond. They should be eager to gain you as a customer, not nonchalant or standoffish.

You can tell a lot from a company by their sales team. Do not forget to mention your current auto insurance provider, if you have one and the reason you want to switch.

Before you make up your mind, give yourself enough time to really think each offer over. Never make a quick decision that will cost you in the end. The whole point of comparison-shopping is to get a better deal that is a great value.

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Do I qualify for an auto insurance discount?

  • When a driver shops around for the right auto insurance policy, the number of car insurance discounts offered by each insurance company increases
  • Since certain drivers are drawn to specific discounts, the insurance industry noticed that large pools of drivers would start to form if a certain discount was offered
  • Police reports are used to gather accident information while repair shops provide actual cost data

Almost every driver can qualify for an auto insurance discount with the right insurance company. Auto insurers began offering discounts as a way to shape behavior in an effort to reduce risks.

Since drivers are drawn to discounts, the insurance industry noticed that large pools of drivers would start to form if a certain discount was offered.

When a driver shops around for the right auto insurance policy, the number of discounts offered by each insurance company comes to light.

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Vehicle-Related Discounts

When insurance companies calculate the cost of insuring certain vehicles, they involve little to no guesswork. State insurance commissions track actual accident statistics.

Police reports are used to gather accident information while repair shops provide actual cost data. Drivers can visit the website of the Insurance Institute for Highway Safety to determine the least expensive vehicles to insure if a new car purchase is on the horizon.

  • Make and model – When the cost of repairing the vehicle is known, the insurance company assigns a cost of repair. Over time, costs will moderate for popular vehicles because parts are more readily available. Certain cars are very expensive to insure because of repair and replacement costs.
  • Safety features – Airbags, automatic seatbelts, and anti-lock brakes reduce the risk of injury for passengers involved in a car accident. All of these features are revealed in the VIN number on the vehicle when the insurance company begins to formulate a quote. Most safety features are factory-installed.
  • Security devices – Electric locks and a factory-installed car alarm ensure that the vehicle is secured when the driver is not present. These devices will be indicated in the VIN, but the driver is wise to mention these features when asking for a quote.
  • Anti-theft apparatus Kill switches, steering wheel locks, and tire locks are excellent theft deterrents. In areas where auto theft occurs often, the insurance company may require that an anti-theft apparatus is installed on the vehicle. Reducing the risk of theft saves money for the car insurance company.

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Driver-Related Discounts

Reducing risk of loss is the most important action a driver can take to lower car insurance premiums from the insurance companies. Many drivers are surprised to find that mature habits in other areas of life are rewarded by insurance companies.

Most of the following discounts are awarded to responsible individuals who ask for them:

  • Clean driving record – When a driver does not incur a moving violation or speeding ticket for three or more consecutive years, the insurance company lowers the auto insurance premium. Safe driving is one of the most important factors for retaining low car insurance rates.
  • Good credit score – Financial habits reflect an individual’s ability to handle responsibility in every area of life. If the credit score is low, the insurance companies will charge a higher premium for the individuals listed on the auto policy.
  • Senior citizen – People older than 55 and younger than 80 years of age are considered more mature when their driving record remains free from violations. After the age of 80, some insurance companies will require reflex evaluations for their older drivers to ascertain their ability to drive safely.
  • Good student – Young drivers with excellent school grades are rewarded with lower car insurance premiums because of their disciplined approach to school. Students with average grades are not charged higher than standard rates, but this discount is not given.
  • Professional association – Corporate discounts are negotiated by some very large companies. Professional groups, such as physicians, accountants, and attorneys, are offered lower rates because the insurance industry perceives drivers in these professions as more responsible.
  • Low mileage – Every insurance company has a different idea of “low mileage” when it comes to driving a vehicle in a given month. Some companies offer discounts if the car is driven fewer than 100 miles in a month, but each insurer is different. The best way to find out is to inquire about this discount if the vehicle is not driven every day.
  • Driver’s training – One day spend in a defensive driving course can reduce the annual auto insurance premium by as much as 30 percent. Every company is different, so the driver must shop around and then follow through and take the course. Other types of training, such as inclement weather training, will reduce rates because the risk of accidents is lowered.

Policy-Related Discounts

Insurance companies offer various types of discounts that are related to their loyal customers. Each insurer will offer a variation on the following discounts, and the best way to find them is to ask during the quote process.

All policy documentation must be verified to ensure that each promised discount was awarded.

  • Multi-policy – If the driver also has a home, purchasing both insurance policies from the same insurance company can save a great deal on both premiums. Life insurance policies will be discounted by most insurers when the car and home insurance policies are with the same insurer. The actual discount percentage varies by insurer.
  • Multi-vehicle – One auto insurance policy with multiple cars listed in the coverage will be less expensive than separate policies for each vehicle. This method is especially important when teen drivers are added to the family insurance policy. Mature drivers can offset the cost of insuring a teen.
  • Annual payment – Administrative costs are lower when one payment is made each year. Insurance companies will reduce the annual premium if they receive all of the money at the beginning of the policy year. Some insurers will allow policyholders to make quarterly payments, which are less expensive than twelve monthly payments.
  • Deductible – Carrying a higher deductible on an auto insurance policy is one method of lowering the annual premium. Care must be exercised when setting the deductible amounts to avoid causing a financial hardship if an accident occurs. The amount of the deductible should be kept in a savings account.

Final Word

When drivers shop around for auto insurance, the goal should be to acquire sufficient coverage against loss at an affordable price. A quote that is ridiculously low compared to the other quotes acquired should be evaluated closely.

If an accident occurs, the coverage must cover the loss.

Drivers that cut corners on each of the major subcomponents, such as collision, comprehensive, and liability might save money on the annual auto insurance premiums but will not be sufficiently insured.

A prudent approach is to set appropriate coverage levels and ask for every possible discount for which the driver might qualify. Compare and find cheap auto insurance with our FREE comparison search below! Enter your ZIP code to get started!

What are the best discounts for auto insurance?

There are many car insurance discounts available; you just need to know what to look or ask for. Often, when you call an auto insurance company for a quote, the agent will ask you if you qualify for certain discounts. But knowing what types of discounts are available will help give you an upper edge in negotiating the best deal for your policy.

Compare discounts across a handful of different insurance providers. Type your ZIP code into the free tool on this page and find out what auto insurance rates you qualify for!

Popular discounts offered by insurance companies include discounts for a variety of conditions. These include:

  • Multiple vehicles on the same policy
  • Multiple policies (life, home, car) from the same provider
  • Good driving or accident-free driving records
  • Anti-theft devices such as car alarm systems
  • Good student discounts (for students on the policy who maintain a certain grade point average and/or class ranking)
  • Defensive driving discount for drivers who have successfully completed a defensive driving course in the last three years

What other discounts for auto insurance should I ask about?

Some other discounts you should ask about (if they pertain to you or your vehicle) include discounts for:

  • Drivers age 55 and older
  • Anti-lock brake systems
  • Airbags and automatic seatbelts (often referred to as Passive Restraint)
  • Switching from one insurer to another before your policy is done
  • Some insurance companies will give a discount of 5-10% for paying the entire premium at one time, instead of spreading out payments for the life of the policy. Some will give a small discount for paying with automatic deductions from your bank account.
  • If you work for a union, the government, or a large company, you should check with human resources or the appropriate person to see if they endorse or have an account with a particular insurance company. If they do, you would be entitled to the member discount, which is usually 10%.
  • Likewise, if you belong to a membership association, such as your college alumni, professional organization, or even a credit union. Several insurance companies also offer discounts to members of the military.

Though there are not any auto insurance discounts for disabled drivers, keep in mind that insurance companies can not charge higher rates based on disablities.

Are there any other ways I can reduce my auto insurance payments?

Absolutely! The best way to keep your auto insurance costs to a minimum is to practice safe driving on the roads and avoid collisions.

Because you don’t have control over the other drivers on the road though, the easiest way to reduce your payments is to choose the type of insurance coverage that fits your needs. If you can, keep your deductible high so that your premiums are low, and buy the most basic of coverage to protect you and your vehicle.

Most insurance providers will reward customer loyalty with discounts based on the number of years you’ve been a member. These loyalty rewards include a discount off premiums, as well as a discount on deductibles.

A few of them even offer “accident forgiveness” protection for loyal customers–they won’t raise your premium just because you’ve been involved in one accident. The accident forgiveness may save you a few hundred dollars if you get into an accident that isn’t your fault.

Does the type of car I drive affect my auto insurance premium?

While there is not a direct discount related to the car you drive it does affect your auto insurance costs because the insurance provider will charge more for cars that cost more to repair or replace. This includes sports cars, expensive cars, and unique cars, as well as any models of car preferred by thieves. They’re also going to charge more for cars with known defects and bad safety ratings.

Having said that, there are a lot of other factors used by insurance providers these days to figure out insurance premiums besides the fact that you drive a cherry red Porsche (or wish you did!) Here are some of them:

  • Your credit score
  • Your place of residence
  • Location of your job
  • Where you park your car at night affects your premium
  • Length of your commute

Finding a job closer to home or joining a carpool will result in less wear and tear on your car, and a decrease in your premium cost.

One of the best ways to pay less for your auto insurance policy is to shop around at different providers until you find the best price for the policy that fits your needs. Shop around from the comfort of your home simply by entering your ZIP code in this box now, and finding out the best online auto insurance quotes available for you!