Car insurance discounts are special offers from insurance companies that allow drivers to save up to 35% on their annual premium. Most insurers offer a wide range of car insurance discounts, which fall into three overall categories: policy discounts, driver discounts, and vehicle discounts.
Policy discounts are discounts that insurers offer in order to retain you as a customer. Driver discounts are offered to drivers who pose a relatively low risk to their insurer based on characteristics like age, driving history, and annual mileage. And vehicle discounts are available for drivers who have additional safety technology in their car.
Most Common Car Insurance Discounts
- Safe driver discount
- Anti-theft device discount
- Multiple vehicles discount
- Policy bundling discount
- Good student discount
- Low mileage discount
- Defensive driver class discount
Types of Car Insurance Discounts
| Type of Discount | Potential Savings | Examples |
|---|---|---|
| Policy discounts | up to 25% | Customer loyalty discount Bundled policies discount |
Driver discounts | up to 35% | Safe driver discount Good student discount |
Vehicle discounts | up to 30% | Anti-theft discount Safety features discount |
List of Car Insurance Discounts
- Customer Loyalty Discount
- Customer Retention Discount
- New Customer Discount
- Continuously Insured Discount
- Billing Discount
- Bundled Policies Discount
- Good Student Discount
- Resident Student Discount
- Good Driver Discount
- Driver Education Discount
- Usage Based Discount
- Mature Driver Discount
- Occupational Discount
- Organizational Discount
- Non-Drinker Discount
- Married Discount
- Homeowner Discount
- Safety Features Discount
- Passive Restraints Discount
- Anti-Theft System Discount
- New Car Discount
Car Insurance Discounts Explained
Customer Loyalty Discount
Insurers often offer discounts to long-term customers as a special reward. With American Family and USAA, for example, the amount that you save depends on how long you’ve had your policy.
- Potential savings: 2% - 10%
- Major insurers offering this discount: USAA and American Family
Customer Retention Discount
Before you switch to a new insurer, many insurance companies will give you a discount for a chance to keep your business.
- Potential Savings: Up to 10%
- Major insurers offering this discount: Many insurers offer a customer retention discount, but none openly advertise it.
New Customer Discount
Most insurers offer customers an initial bonus for switching their coverage from another insurance company. With Travelers, for example, you can save up to 10%, depending on how far in advance you buy your policy. To maximize your savings, make sure to get a quote before your previous policy is due to expire.
- Potential Savings: 5% – 15%
- Major insurers offering this discount: Allstate, Liberty Mutual, American Family, and Travelers.
Continuously Insured Discount
You will save on premiums with most insurance companies if you can prove you’ve had insurance throughout the prior six months. For instance, the exact amount that you save at Progressive depends on how long you’ve been continuously insured.
- Potential Savings: 5% - 25%
- Major insurers offering this discount: Progressive and Travelers.
Billing Discount
Receiving all correspondence through email, paying online, agreeing to automated payments, and paying up front can all add up to significant discounts. For example, Nationwide offers a one-time discount when you set up automatic deductions from your bank account.
- Potential Savings: 2% – 25%
- Major insurers offering this discount: Progressive, Liberty Mutual, Farmers, Nationwide, American Family, and Travelers.
Bundled Policies Discount
Drivers can save by insuring multiple vehicles under the same policy. Similarly, insurers offer discounts for drivers who use the same insurer for other types of insurance such as homeowner’s or renter’s. At Progressive, for instance, drivers save an average of 12% when they insure multiple vehicles and 5% when they purchase multiple policies.
- Potential Savings: 1% – 17%
- Major insurers offering this discount: State Farm, Geico, Progressive, Allstate, USAA, Liberty Mutual, Farmers, Nationwide, American Family, and Travelers.
Good Student Discount
Showing a “B” grade point average or higher may make young drivers eligible for a discount. At Geico, for example, full-time students can save up to 15% on their premium with this discount.
- Potential Savings: 5% – 20%
- Major insurers offering this discount: State Farm, Geico, Progressive, Allstate, USAA, Liberty Mutual, Farmers, Nationwide, American Family, and Travelers.
Resident Student Discount
You can save on premiums if an insured student is attending school at least 100 miles away and doesn’t have access to the insured vehicle. For example, Travelers offers a 7% discount for long-distance students.
- Potential Savings: 7% – 35%
- Major insurers offering this discount: State Farm, Progressive, Liberty Mutual, Farmers, American Family, and Travelers.
Good Driver Discount
Having a clean driving record and no history of car insurance claims will save you money. Some insurers will allow you to qualify even if you have claims on your record, as long as you’ve been a good driver for a certain period of time. For example, you can get a good driver discount at USAA if you go five years without a claim or moving violation.
- Potential Savings: 10% – 30%
- Major insurers offering this discount: State Farm, Geico, Progressive, Allstate, USAA, Liberty Mutual, Farmers, Nationwide, American Family, and Travelers.
Driver Education Discount
Take an approved defensive or safe driver course for reduced rates.
- Potential Savings: 2% – 10%
- Major insurers offering this discount: State Farm, Geico, USAA, Nationwide, and Travelers.
Usage Based Discount
Allowing an insurance company to track your actual driving habits, usually through a device attached to your car or a smartphone app, can offer substantial savings. Drivers at Progressive, for instance, save an average of $145 through the Snapshot program.
- Potential Savings: Up to 30%
- Major insurers offering this discount: State Farm, Progressive, USAA, Allstate, Nationwide, American Family, and Travelers.
Mature Driver Discount
Thirty-four states and the District of Columbia require insurance companies to provide discounts to older drivers who take an approved mature/senior driving course. Farmers and American Family, however, offer the discount to all eligible drivers, regardless of their state.
- Potential Savings: 1% – 15%
- Major insurers offering this discount: Farmers and American Family.
Occupational Discount
Certain professions are statistically less likely to file expensive claims. As a result, they pay lower rates for car insurance.
- Potential Savings: 10% – 20%
- Major insurers offering this discount: Most insurers provide lower rates for drivers in certain occupations, such as scientists and pilots. They do not specify a separate discount.
Organizational Discount
Many private organizations such as school alumni groups, credit unions, and auto clubs like AAA give savings opportunities to members by partnering with a specific insurer. Geico, for example, offers discounts for members of more than 500 organizations.
- Potential Savings: 2% – 20%
- Major insurers offering this discount: Geico, Farmers, and Nationwide.
Non-Drinker Discount
Some companies offer minor savings if you certify that you don’t drink alcohol.
- Potential Savings: 1% - 3%
- Major insurers offering this discount: Few insurance companies offer this discount, and it does not apply to any of the 10 largest insurers.
Married Discount
A married person is statistically less likely to file expensive claims, so insurance companies often quote them lower rates. However, insurers in Hawaii, Massachusetts, and Montana do not allow insurers to consider a customer’s marital status when calculating their insurance premium.
- Potential Savings: 10% – 20%
- Major insurers offering this discount: Most insurance companies offer lower rates to married individuals. They do not advertise a specific discount.
Homeowner Discount
Homeowners are usually offered a discount on car insurance because they are considered to be financially stable. At Travelers, for example, drivers can save up to 5% if they own a home or condo, even if they insure it with another company.
- Potential Savings: 2% – 10%
- Major insurers offering this discount: Progressive, Liberty Mutual, Farmers, and Travelers.
Safety Features Discount
You may save more if your car has safety features like anti-lock brakes and stability control, which are common among newer vehicles. State Farm, for instance, offers up to 40% off of medical payments coverage for drivers whose vehicles were made in 1994 or later.
- Potential Savings: 4% – 40%
- Major insurers offering this discount: State Farm, Geico, Liberty Mutual, Farmers, and American Family.
Passive Restraints Discount
Cars with airbags and automatic seatbelts can be cheaper to insure. At Geico, for example, drivers save 25% on their medical payments premium for driver-side air bags, and 40% for full-front seat air bags.
- Potential Savings: 2% – 40%
- Major insurers offering this discount: State Farm, Allstate, Geico, USAA, and Farmers.
Anti-Theft System Discount
Several insurers offer discounts for cars with alarms, LoJack, or steering wheel locks, which can help prevent auto theft. For instance, Geico’s anti-theft discount is the highest among major insurers, offering up to 25% off your rate.
- Potential Savings: 5% – 25%
- Major insurers offering this discount: State Farm, Geico, Allstate, Liberty Mutual, Farmers, and Nationwide.
New Car Discount
If you’re insuring a brand-new car, you may receive a discount from your insurer. Travelers, for example, offers a discount of up to 10% for newer model vehicles.
- Potential Savings: 5% – 20%
- Major insurers offering this discount: Geico, Allstate, USAA, and Travelers.
Best Companies for Car Insurance Discounts
| Insurer | Number of Discounts | User Rating on WalletHub |
|---|---|---|
| Farmers | 23 | 3.5/5 |
| American Family | 18 | 3.5/5 |
| Liberty Mutual | 17 | 2.5/5 |
| Geico | 16 | 2.5/5 |
| Travelers | 15 | 2.2/5 |
| USAA | 14 | 2.7/5 |
| State Farm | 13 | 3.5/5 |
| Progressive | 13 | 2.7/5 |
| Allstate | 12 | 3.0/5 |
| Nationwide | 11 | 3.3/5 |
How to Get Car Insurance Discounts: 4 Tips
1. Look Up Your Insurer’s Discounts Online
Most insurance companies clearly advertise their auto insurance discounts, so you should always check your insurer’s website to see if there are any discounts that you might qualify for.
2. Check for Mandatory Discounts
Some discounts might be automatically applied to your premium if they’re required by state law. For example, California mandates that insurance companies provide at least a 20% discount to all drivers who have been continuously insured for at least three years and who have one point or less on their driving record.
3. Contact Your Insurance Agent
If you still have questions about available discounts or want to know more about specific discount terms, then you should reach out to your insurance agent or call your insurer’s customer service line for help.
4. Lower Your Base Premium
The best way to save money on car insurance is to lower your base premium by taking steps to reduce your risk as a driver. This may include practicing good driving habits to avoid tickets and having to file claims, improving your credit score, and choosing to drive a cheaper vehicle. You can also shop around for quotes from other companies and consider switching insurers if you find a cheaper policy elsewhere.
