Obtaining discounts is one way to reduce the cost of your auto insurance. There are over a dozen common vehicle insurance discounts, some of which you may not be aware of. You may also need to have your car insurance agent run a discount check to make sure you’re getting all the discounts you’re entitled to.
While other costs, including registration fees, fuel, and repair costs, are beyond your control, auto insurance is one expense that you can cut. A survey by Forbes Advisor found that the average annual cost of auto insurance for a 30-year-old driver is made up of liability, uninsured driver coverage, collision, and comprehensive insurance.
Automobile Insurance Discounts
We looked at discount percentages from 11 of the country’s main vehicle insurance companies when they were available to find average ranges. Your insurance provider may provide you with larger or smaller reductions.
A multi-policy discount may be available if you purchase auto insurance and other policies from the same company. It’s often referred to as “bundling” or a “multi-line discount.” Car and home insurance bundles are usually one of the most cost-effective ways to save money, with savings ranging from 5% to 25%. Don’t worry if you don’t own a home; auto insurance may sometimes be coupled with other policies, including condo, renters, motorcycle, boat, RV, and life insurance.
According to some of the biggest firms’ multi-policy savings, Farmers is leading the way in bundling deductions on a vehicle policy when you also have a home, condo, or renters’ policy. Bundling your vehicle and home insurance plans will save you the most money, with reductions ranging from 6% to 26%. Renters don’t get nearly as much assistance, with savings ranging from 2% to 9%, but every little bit helps.
The discount is 13% for people who own their own homes, 11% for people who own condos, and 7% for people who rent.
Remember that this discount is only valid for auto insurance. Depending on the carrier, you may be eligible for a discount on your other insurance (home, condo, or renters).
Multiple car discounts are available
This discount is usually available if you insure more than one vehicle with the same insurance company. Discounts ranging from 8% to 25% are frequently advertised.
Vehicle safety discounts
If your car has anti-lock brakes, airbags, and daytime running lights, you may be eligible for a discount. Full-front seat airbag savings can save you up to 40% on your medical payments or personal injury protection policy.
New vehicle discounts
A new car discount of 10% to 15% is often available for cars that are less than three years old.
Anti-theft gadgets are eligible for discounts
If your vehicle has anti-theft features, you can usually get a 5% to 25% discount on your comprehensive coverage. Depending on the insurance carrier, anti-theft discounts may be offered for both factory-installed and aftermarket installed devices.
The National Highway Traffic Safety Administration estimates that 41% of stolen vehicles are never found. Here are some anti-theft devices that can help in the recovery of a stolen car and possibly result in a discount:
Some vehicles come equipped with services such as OnStar or Toyota Safety Connect, which employ GPS to hunt down a stolen car. Some technologies, like OnStar’s “Remote Ignition Block,” can stop a burglar from starting your car.
By broadcasting a silent radio signal to a transceiver installed in the vehicle, stolen vehicle recovery systems like LoJack aid law enforcement in tracking and recovering your stolen vehicle. If you show your car insurance company proof of installation, you may get a discount.
The vehicle identification number (VIN) is permanently imprinted on a car’s windshield and windows. It deters car thieves from removing and replacing VIN-etched glass before selling your vehicle. If your vehicle is stolen, some auto insurance companies will not only give you a discount for having your VIN etched, but they may also waive your comprehensive coverage deductible.
Good drivers get discounts
Car insurance providers reward good drivers with discounts. An auto insurance company will usually want you to be accident-free for a certain amount of time. Geico car insurance, for example, can save you up to 26% if you haven’t had any accidents in the last five years. If you haven’t had any accidents, auto insurance claims, or traffic violations, you may be eligible for a discount. Discounts for competent drivers can range anywhere from 10% to 40%.
Defensive drivers receive discounts
Some insurance companies will give you a discount if you agree to take an approved defensive driving course. Keep in mind, though, that this discount may only be offered to drivers over the age of 50. Defensive driving discounts often range from 5% to 10% of the total insurance premium. Some states require mature drivers to receive this discount.
Students receive a discount
If you or your student driver is enrolled full-time in high school or college and meets certain requirements, you may be eligible for a discount. Students with a B average and between the ages of 16 and 25 are typically required by car insurance companies. We uncovered fantastic student deals ranging from 8% to 25% off.
Students who are away from school receive a discount
If your student is away at school and without a car, you may be eligible for a discount. Car insurance providers have varied requirements, but the majority require students to be under the age of 25, reside more than 100 miles from home, and only use their car during school vacations and holidays.
If you pay in full, you get a discount
When you pay for your entire policy term in advance, car insurance companies normally give you a discount.
Top insurance companies provide savings ranging from 6% to 14% if you pay your premium in full rather than in monthly installments. Apart from the rebate, deferring payments will save you money on a monthly finance or service fee that some providers charge.
Electronic money transfer discounts (EFT)
If you pay in installments, automatic withdrawals may qualify you for a small discount. The EFT discount could range between 3 and 6%.
Without a paper discount
If you choose to go paperless, you will receive your insurance documentation and billing electronically. The insurance company may offer a slight reduction. People currently prefer paperless solutions, so this discount is less prevalent than it used to be. We observed that the average discount is 3% but that it differs between Farmers and Progressive, ranging from 6% to 1%.
Online quotes receive a discount
Certain auto insurance companies will give you a discount if you get a quote online and sign up for coverage. This can be anywhere from 4% to 12%.
Early birds get a discount
It is possible to save money by shopping around and getting a policy before your current one expires. The number of days you must purchase in advance to obtain a discount varies with each company, but seven to 14 days is usually the sweet spot. The discount usually ranges from 2% to 15%.
When we looked at major insurance companies, we found that if you bought insurance 10 days ahead of time, you could save as much as 10% with Allstate and as little as 3% with Nationwide.
Employee discounts are available
Depending on your profession, you may be eligible for discounts. For example, Liberty Mutual offers educators special policy perks, and Geico offers military personnel a 15% discount. Consult your insurance agent to see if your line of work qualifies for a discount.
Associations of professionals and alumni
Professional organizations (such as your state’s bar association or a union), as well as college alumni groups, fraternities, and sororities, may fall under this category.
Insurance with a discount based on usage
Usage-based insurance (UBI) is a type of insurance that adjusts your premiums according to how often and well you drive. A device attached to your car’s ODB-II port or a smartphone app is typically used to collect data. The majority of UBI systems offer a sign-up discount (typically between 5% and 10%), followed by a discount depending on your actual driving patterns. The discount is often applied when the policy is renewed. A typical UBI discount is from 5% to 40%, depending on how experienced a driver you are.
Your whole policy may or may not be eligible for a UBI discount.
Savings on Auto Insurance
Car insurance discounts aren’t always what they seem. “Big savings!” you might think when you see a discount that says “up to 40% off.” However, this does not imply that you will save 40% on your entire auto insurance price.
Here are some ideas for finding low-cost auto insurance.
The word “up to” should be avoided.
Discounts are often stated as “up to” a certain percentage. It is conceivable that you will not receive that proportion. For instance, the maximum discount may only be offered to certain types of drivers.
Some discounts on car insurance might not apply to the whole cost of your policy.
Seat belt savings, for example, may only be used for medical bills or personal injury protection, which pays for harm to passengers. Discounts for anti-theft devices might only apply to full coverage because full coverage covers auto theft.
Certain discounts are required by state law
State-mandated savings are available from any insurance provider. In New York, drivers who finish a defensive driving course and send their insurance company a certificate of completion can get a 10% discount on liability and collision coverage for three years.
Discounts are sometimes limited
Even if you qualify for multiple discounts, the insurance provider will usually cap the total discount percentage. For example, you could save up to 75% on your car insurance (hello, new espresso machine!) by stacking savings. However, the total may only be 20%.
Not all discounts are given automatically
If you’ve had the same policy for several years, you may need to request changes. Your insurance provider will have no idea that your vehicle is equipped with an anti-theft device or that your student driver has received excellent grades. Asking your insurance agent to check for possible discounts regularly is the simplest way to save money on discounts.
Discounts vary by state
A discount that is shown on the website of an insurance company might not be available in your state.