There are few certainties in life, but it’s a safe bet that the cost of your car insurance is probably going to increase come renewal time. Many factors — such as general inflation and rising vehicle-repair costs — are outside your control. But you can offset the price of your premium by seeking car insurance discounts.
While insurers may automatically apply some discounts, don’t count on them to ferret out all your savings. “It’s not to their benefit to look for discounts,” says Karl Susman, owner of Los Angeles-based Susman Insurance Agency.
So it's up to you to take the initiative if you want to maximize your savings.
With that in mind, we’ve identified 10 common car insurance discounts that can all help lower auto insurance premiums by up to 30%, including:
- Bundling your home and auto policies
- Maintaining a clean driving record
- Insuring multiple cars
- Installing an anti-theft device
- Driving fewer miles
- Taking a defensive driving course
- Maintaining good grades if you’re a student
- Serving in the military
- Working in select professions, such as teaching or first responder
- Being a loyal customer
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What are the best car insurance discounts?
How much you can save with car insurance discounts will depend on your insurer and level of coverage. Other factors include your age, gender, what kind of vehicle you drive, how many miles you rack up annually, and more.
The following car insurance discounts represent a range of what you can expect to find at major insurers, based on what insurers have published online. These common discounts offer the greatest potential for cost savings:
Good driver discount (up to 30%): This is one of the more lucrative discounts, according to insurers. But the criteria for qualifying as a good driver will depend on your insurance company.
For instance, Geico promises savings of up to 22% for good drivers, defined as someone who has been accident-free for five years. American Family Insurance describes a good driver as one with no accidents, violations or claims in the past five years.
Some insurers tie good driver discounts to usage-based insurance (UBI), wherein you agree to have your driving monitored by an app or telematics device in exchange for potentially lower rates. For instance, AAA Insurance’s AAADrive app monitors speed, distractions and drive times, among other things, and then awards discounts that can range from 5% to 25%.
Multi-car discount (up to 25%): Insuring more than one vehicle on your car insurance policy can also lead to a discount. Progressive says its multi-car discount can save drivers 12%, while Geico’s website promises savings of up to 25%.
Just bear in mind that these savings only apply to vehicles you own and to members of your own household.
“The caveat is to not start adding people (outside your household),” Susman says. You need to have an ‘insurable interest’ in the vehicle. That means the car you purchased for your college student might qualify but your best friend’s SUV does not.
Anti-theft device discount (15% to 25%): Anti-theft devices can reduce claims for stolen vehicles, so insurers reward drivers with discounts based on what protections their car has. Active disabling devices, audible alarms, VIN etching and electronic tracking could all result in discounts that could add up to a significant amount.
“In so many of the newer cars, the anti-theft is built in,” says Michael Silverman of Silver Lining Insurance Agency in New York. That means insurers will automatically apply discounts based on what features are indicated by a vehicle’s identification number.
If you have an older car or a basic model, it may be worth installing a third-party device such as a GPS recovery system to get a discount.
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Good student discount (15% or more): Insurers differ when it comes to what defines a “good” student, but a grade-point average equivalent of a B or better usually qualifies. State Farm will also extend savings to a student if they are on their school’s dean’s list or honor roll or are in the top 20% of their class.
From an insurer’s perspective, “kids who are better students are better drivers,” Susman says.
The amount of the discount can vary significantly. A review of published discounts online ranged from 15% at Geico to as much as 35% at Country Financial.
Military discount (15% or more): Many insurers award discounts to military members, in part because as a group they’re considered safer drivers than the general public. Active duty, retired, National Guard and National Reserve military members are typically eligible for these discounts which can save 15% or more, depending on the carrier.
Military members and their families may be eligible for other discounts related to service as well. For instance, USAA, which caters to retired and active members of the military and their families, advertises a 15% discount for vehicles garaged on a base.
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Affiliation/occupation discount (up to 12% or more): Some insurance companies also have discounts based on membership in certain organizations or employment in certain occupations. Federal employees save 12% at Geico, for example, while Country Financial rewards teachers and first responders with a 15% discount.
Memberships with alumni groups, trade organizations and labor unions may also come with access to car insurance discounts.
Bundling discount (10% or more): If you are looking for a car insurance discount, start by consolidating – or bundling – all your insurance policies with one carrier. Policies that may be eligible for bundling include homeowners, renters, condo, pet or life insurance.
Your savings will depend largely on which policies you bundle and how much coverage you carry. For instance, Liberty Mutual’s website says bundling home and auto policies can save an average of $950, while State Farm’s website touts policyholder savings of $1,273.
Low-mileage discount (10% or more): How much you drive can also impact how much you pay for car insurance. “A lot of carriers will rate for usage,” says Susman, who notes that this is a commonly overlooked discount opportunity.
If you work from home or have a short commute, rely primarily on public transit, or only drive part of the year, then you might qualify. Low-mileage thresholds vary by insurer, but typically range from 8,000 miles to 10,000 miles per year.
Another option for savings is to use a pay-per-mile insurance plan. The Nationwide SmartMiles program is one example. It charges a flat base rate plus a variable rate of 7 cents per mile drive to calculate your monthly premium.
In a sample scenario, a 35-year male with a clean driving record in Chicago may pay $95 a month for 500 miles of travel compared to a standard rate of $133 per month for unlimited travel. Safe drivers may be eligible for an additional 10% discount after their first year.
Defensive driving course discount (5% to 10%): In some states, you are legally entitled to a discount if you complete an approved defensive driver course, although how much of a discount you’ll receive will vary based on the insurer.
For instance, Colorado law provides for a three-year discount for drivers 55 and older who complete a driver’s education course. But the law says, “any discount used by an insurer shall be presumed appropriate.”
Many insurers say this discount will result in 5% off of your premium, but a few (such as Georgia Farm Bureau) tout savings of 10%.
Loyalty discount (5% to 10%): Known as loyalty, legacy or continuous-coverage discounts, you can also save 5% or more if you choose to remain with your current insurer year after year. Young drivers may be able to earn a discount based on their parent’s loyalty as well. The MyUSAA Legacy discount, for example, offers young drivers a discount of up to 10% when they sign up for a new policy and their parents also have coverage through the insurer. MyUSAA is part of USAA insurance, which is only available to active and retired members of the military and their families.
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Other car insurance discounts
Paid in full: Allstate is among the insurance companies that will discount your premium if you pay up front for the policy term, rather than in installments.
Early renewal: The early shopper discount at Liberty Mutual could save you up to 12% if you request an online quote before your policy renews. Allstate has a similar early signing discount for those who sign their policy seven or more days before it becomes effective.
Student away at school: Multiple companies, including State Farm, offer car insurance discounts for college students who are away at school but leave their vehicle at home.
Paperless billing: If you are willing to receive statements electronically, you may be eligible for a discount. Progressive says it offers a 9% average savings for those who sign their policy documents online.
Safety features: Certain vehicle safety features can make you eligible for discounts that range from 3% at Geico for daytime running lights to 40% off select coverage at State Farm for passive-restraint systems.
Check with your insurer to see what other discounts they may offer.
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Frequently asked questions
Where does my insurance policy list the discounts I have?
You’ll find all the discounts applied to your policy on the declarations page. This is a sheet summarizing all the essential facts about your policy, including the coverage period, vehicles and drivers covered, payment limits, deductibles and discounts.
If you have online access to your account, you should be able to find the declarations page listed in your plan documents there. Otherwise, look for it in the paper documents delivered to you when enrolling or renewing coverage.
How can I save money on car insurance?
Car insurance discounts are one way to save money on premiums, but they aren’t your only option. You can also try the following:
Raise your deductible. Increasing your deductible to $500 or even $1,000 can net significant savings on premiums. Before doing so, be sure you can afford the higher deductible in the event of a claim.
Choose your car wisely. Some cars are cheaper to insure than others. According to data compiled by Progressive, small and midsize SUVs tend to be the cheapest to insure. If you buy a luxury or sports car, however, expect to pay more.
Improve your credit. Since credit history can be used in setting insurance rates in most states, improving your score may lower your premiums – but doing so will take time. Reducing your overall personal debt and paying bills promptly on time are two easy ways to get started improving your credit.
How can I get discounts on my insurance?
If you bought your car insurance through a broker or agent, start with them.
“Our job is to have conversations with our clients and find out what they are eligible for based on our discussions,” Silverman says.
If you purchased your policy directly from an insurer, call their customer service team to discuss available discounts and ask that your policy be reviewed for money-savings opportunities.
While insurance companies may automatically apply some discounts — such as safety features that come standard on your car — they aren’t going to know about other potentially money-saving habits of yours (such as reducing the miles you drive or taking a defensive-driving course) unless you tell them.
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