Car Insurance Discounts Guide – Forbes Advisor
While certain expenses like registration fees, fuel, and repair costs are out of your control, one cost you can cut back on is auto insurance. Nationally, the average cost of car insurance that includes liability, uninsured motorist coverage, and comprehensive and collision insurance is $1,998 a year for a 30-year-old driver, according to research from Forbes Advisor.
One of the ways to lower your auto insurance bill is to get discounts. There are more than a dozen common auto insurance discounts, and you may not realize you’re already eligible for some. And sometimes you have to proactively ask your auto insurance agent for a discount review to make sure you’re getting all the savings you qualify for.
types of car insurance discounts
We examined the discount percentages when they were available from 11 of the nation’s largest auto insurance companies to find typical ranges. you may find higher or lower discounts from your own insurance company.
A multi-policy discount is often applied when you buy auto insurance plus other policies from the same company. it is also called “multi-line discounting” and is commonly known as “bundling”. Combining auto and home insurance is usually one of the biggest discounts you can get, often between 5% and 25% off. But if you don’t own a home, don’t worry, you can usually bundle auto insurance with other insurance, like condo, renters, motorcycle, boat, RV, and life insurance.
Looking at multi-policy discounts from some of the major companies shows that farmers are leading the way with combined deductions on an auto policy when you also have a home, condo, or renters policy. Combining your auto and home policies gives you the best discount across the board, with discounts from 6% to 26%. renters don’t get as much rest, with discounts ranging from 2% to 9%, but every little bit helps.
Average discounts are 13% for homeowners, 11% for condo owners, and 7% for renters.
Please note that this is the discount portion of the auto policy. Depending on the company, you may also get a bundle discount on your other policy (home, condo, or renters).
discount for several cars
You can usually get this discount if you insure more than one car with the same insurance company. typical advertised discounts are up to 8% to 25%.
discounts on vehicle safety
If your car has safety equipment like anti-lock brakes, air bags, and daytime running lights, you can get a discount. daytime running lights are usually very small discounts, but airbag discounts for full front seat airbags can be applied up to 40% toward your medical payments or personal injury protection coverage.
new car discount
Cars that are less than three years old can often qualify for a new car discount, often between 10% and 15%.
discounts on anti-theft devices
If your car has anti-theft features, you can typically get up to 5% to 25% off your comprehensive coverage. Depending on your insurance company, you may be able to get anti-theft discounts for aftermarket, factory-installed devices.
About 41% of stolen vehicles are never recovered, according to the National Highway Traffic Safety Administration. Here are some types of anti-theft devices that can help you recover a stolen car and potentially get you a discount:
- GPS-based systems: Some cars are equipped with services like OnStar or Toyota’s Safety Connect, which use GPS to help locate the stolen vehicle. some systems, like onstar’s “remote ignition lock,” can prevent a car thief from restarting your vehicle.
- stolen vehicle recovery systems: these types Systems, like lojack, help law enforcement track down and recover your stolen car by sending a silent radio signal to a transceiver installed in the car. your auto insurance company may offer a discount, but you will need to provide proof of installation.
- Vin Engraving: This is a permanent engraving of the vehicle identification number (vin ) on the windshield and windows of a car. It is used as a deterrent against car thieves who would have to remove and replace the etched glass before selling their car. Some auto insurance companies not only offer a discount for vinyl engraving, but may also waive your comprehensive coverage deductible if your car is stolen.
discounts for good drivers
Car insurance companies love good drivers and often reward them with savings. An auto insurance company will usually require you to be incident free for a certain period of time. For example, if you haven’t had an accident in five years, Geico car insurance has up to a 26% potential savings. If you haven’t had any accidents, auto insurance claims, or traffic violations, you may qualify for a discount. good discounts for drivers usually range from 10% to 40%.
discounts for defensive drivers
Some insurance companies will give you a discount if you are willing to take an approved defensive driving course. But keep in mind that this discount can only apply to qualified drivers of a certain age, usually 50 and older. Defensive driver discounts typically range from 5% to 10%. some states require this discount for mature drivers.
good discount for students
If you or your student driver are enrolled full-time in a high school or college and meet certain requirements, you may qualify for a discount. Auto insurance companies generally require the student to maintain at least a B average and be between the ages of 16 and 25. we found good student discounts ranging from 8% to 25%.
discount for students at school
If your student is in school and doesn’t have a car, you may be able to get a discount. Requirements vary between auto insurance companies, but the student generally must be under 25, be more than 100 miles from home, and have access to their car only while at home during school breaks and holidays .
pay with full discount
If you pay for the full term of your policy up front, auto insurance companies often offer a discount.
The major companies show a range of discount from 6% to 14% if you pay the entire insurance bill instead of dividing it into monthly payments. In addition to this discount, you will also save paying a monthly financing or service fee that some companies charge if you spread the payments.
electronic funds transfer (eft) discount
If you pay in installments, you may be able to get a small discount for using automatic withdrawals. the eft discount can range from 3% to 6%.
If you’re willing to go paperless, you’ll get your policy documents and billing electronically. the insurance company may offer a small discount. this discount is not as popular as it used to be, now that people tend to prefer paperless systems anyway. we find that the average discount is 3%, but it ranges from 6% with farmers to 1% with progressives.
online quote discount
Some car insurance companies will offer a discount if you get a quote online and purchase a policy. this can range from 4% to 12%.
early bird discount
comparing and buying a policy before the current one expires can result in a discount. Companies vary on how many days in advance you need to shop to get a discount, but around seven to 14 days tends to be the sweet spot. the discount is usually between 2% and 15%.
We found that buying 10 days in advance from major companies resulted in discounts of up to 10% statewide and up to 3% nationwide.
Depending on your occupancy, you may qualify for discounts. For example, Liberty Mutual offers educators special policy features and Geico offers up to a 15% discount for military personnel. It’s a good idea to ask your insurance agent if your occupancy qualifies for a discount.
alumni associations and professional organizations
This could include college alumni associations, fraternities and sororities, and professional organizations (such as your state bar association or a union).
usage-based insurance program discount
Your insurance company may offer usage-based insurance (ubi), which adjusts insurance rates based on the frequency and quality of your driving. Data is typically collected by a device installed via your car’s OBD-II port or collected from a smartphone app. most ubi programs offer a discount for signing up (between 5% and 10%) and then a discount based on your actual driving habits. the discount is generally applied at the time of policy renewal. if you’re a good driver, a typical ubi discount could range from 5% to 40%.
Please note that a ubi discount may not apply to your entire policy.
examples of insurance discounts based on usage
Tips for car insurance discounts
Auto insurance discounts aren’t always what they seem. for example, you might think, “big savings!” when you see a discount advertised as “up to 40%,” but that doesn’t necessarily mean you’ll get 40% off your entire auto insurance bill.
Here are some tips on discount auto insurance.
be careful with the “until”
Usually you’ll see discounts listed as “up to” a certain percentage. you may not get that percentage. the highest discount may be offered only to certain classes of drivers, for example.
some auto insurance discounts don’t apply to your entire bill
For example, seat belt discounts might apply only to medical payments coverage or personal injury protection, because those guys pay for passenger injuries. Discounts on anti-theft devices may apply only to comprehensive coverage, because that’s the coverage that pays for car theft.
state law requires some discounts
You’ll get state-mandated discounts from any insurance company. For example, New York requires a 10% discount on liability and collision coverage for three years for drivers who take a defensive driving course and submit a certificate of completion to the insurance company.
discounts can be limited
You may qualify for multiple discounts, but the insurance company generally limits the total discount percentage possible. for example, you can add discounts that look like 75% off your car insurance (hello, new espresso machine!), but the total could be capped at 20%.
not all discounts are automatic
You may need to apply, especially if you’ve had the same policy for a few years. Your insurance company won’t know that you had an anti-theft device installed on your car, or that your student driver has excellent grades. The best way to save money on discounts is to ask your insurance agent periodically to review available discounts.
discounts vary by state
A discount you see listed on an insurance company’s website may not be available in your state.
We use data from Quadrant Information Services to find nationwide average rates and discounts from each company for a good 30-year-old driver who purchases liability, uninsured motorist, collision and comprehensive coverage.