The average American spends more than $2,000 annually on car insurance. While those costs can make up a significant line item on monthly budgets, it's worth it in the event of an accident. The good news: there are multiple ways to lower your car insurance premiums without switching providers. Auto insurance discounts are one of the easiest ways to save, but insurance companies don't automatically apply them.
- Bundling Discounts: Multi-Policy Bundle
- Bundling Discounts: Multi-Car Discount
- Paid-in-Full Discount
- Automatic Payment/EFT
- Paperless/Electronic Documents
- Early Quote/Renewal
- Safe Driver/Accident-Free
- Defensive Driving Course
- Usage-Based/Telematics
- Low Mileage
- Safety Features
- Anti-Theft Devices
- Hybrid/Electric Vehicle
- New Car
- Good Student
- Other Discounts
- How to Actually Get These Discounts
- Key Things to Remember
- FAQs
Quick Answer: What Car Insurance Discounts Am I Missing?
The highest impact and most common discounts include:
- Bundling home/renters insurance with auto
- Paid-in-full
- Paperless/electronic billing
- Good student
- Defensive driving
Often overlooked discounts include:
- Affiliation (alumni, employer)
- Low mileage (under 7,500 miles/year)
- Homeownership
- Automatic payment
- Anti-theft
- Loyalty
- Multiple vehicle
Tech-based discounts include:
- Usage-based/telematics devices
- Early quote/renewal
Even experienced agents may forget to mention available discounts because they're focused on gathering information or completing the transaction. Often, you need to ask about discounts you qualify for and whether they can be applied. Some require action on your part, like taking a defensive driving course or installing a telematics device to monitor your driving habits. Others, such as good student discounts, require verification from third parties, like your child's school. Life events — like getting married or buying a home — can also unlock discounts, so keeping your information up-to-date is essential. Ultimately, it's up to you to ask what other discounts you might be eligible for.
Bundling Discounts: Multi-Policy Bundle
Combine your auto insurance with your home insurance or renters insurance under the same provider. Some insurers may allow you to bundle motorcycle insurance or even life insurance policies for additional savings. Or, if you own a condo, you can bundle condo insurance for further discounts.
Most major insurers offer discounts for bundling multiple insurance products, though it's important to compare the bundled price to ensure you're getting the best deal. Some providers offer better bundling discounts than others, but they may have higher rates, so an apples-to-apples comparison is essential.
How to Start Bundling:
- Ask for a bundled quote from your current auto insurer
- Get bundled quotes from two to three other insurers for comparison
- Compare with your current separate polices
- Switch if the savings are significant
If you don't currently own a home, renter's insurance is relatively inexpensive and often just a couple of hundred dollars a year. Many drivers find that the multi-policy discount exceeds the cost of the renter's policy, and they're also protected if something happens to their apartment or rental home.
Bundling Discounts: Multi-Car Discount
Households with multiple drivers or cars may be eligible for a multi-vehicle discount if you insure more than one vehicle under the same policy. This can be useful for newly married couples combining policies, families adding a teen driver, or drivers who have multiple vehicles.
Paid-in-Full Discount
Paying your annual premium upfront can save you money, as it helps insurers avoid monthly billing costs and reduce mid-term cancellations. This discount can be worthwhile if you have the cash flow to pay in full upfront rather than splitting it over the course of the year.
Automatic Payment/EFT
Many insurers also offer a discount for setting up automatic payments from their checking account. These savings may only be a few dollars per month, but can add up to $30 to $100 per year. Just beware that if you cancel the automatic payment, you'll also lose the discount.
Paperless/Electronic Documents
If you find yourself trashing your insurance bills when they show up in your mailbox without even opening them, a paperless discount is for you. Policyholders who opt to receive documents to their email rather than through a traditional mail service can save a few dollars per month. Combined with auto-pay, your savings can add up to a whole month's payment. Plus, less junk mail to recycle!
How to Sign Up For Paperless Discount:
- Log into your account or call your insurance agent
- Opt in to electronic delivery
- Confirm your email
- Discount typically applies immediately
Early Quote/Renewal
If your insurance policy is up for renewal, your carrier may offer early renewal discounts. Start shopping 30 to 45 days before your policy expires (remember, this is a good thing to do every year anyway to ensure you're getting the best car insurance rates), and ask if your provider can apply an early quote or early renewal discount.
Safe Driver/Accident-Free
Auto insurance is expensive because your insurer is guaranteeing they'll cover the cost if you're involved in an accident. That's a risky bet to place for insurers covering drivers who push the limits on the road. That's why many insurers offer safe driver or accident-free discounts to incentivize drivers to reduce their risk of an accident. Good driver discounts often kick in for drivers with a clean driving record with no accidents or violations for three to five years. This discount is often automatically applied at renewal if you qualify, but it's always good to ask and ensure it's being applied.
Defensive Driving Course
Taking a defensive or safe driving course can reduce car insurance premiums. These courses are often offered through the state or by nonprofits such as the National Safety Council or I Drive Safely, but check with your insurer to see which courses qualify. Some can often be completed online and only require a few hours. Many insurers require you to retake the course periodically to maintain the discount.
Usage-Based/Telematics
Modern technology enables you to secure discounts simply by installing an app or device that monitors your driving habits. Most programs guarantee your rates won't increase, but discounts only kick in if your driving habits meet their requirements.
This option is best suited for safe and cautious drivers who are comfortable with being monitored. It's also a good option for low-mileage drivers as you secure discounts based on your actual driving mileage rather than estimated mileage. However, this isn't ideal for aggressive or high-mileage drivers, those who work night shift, or those concerned about protecting their privacy.
What They Monitor:
- Hard braking
- Rapid acceleration
- Speeding
- Time of day driving
- Cornering
- Total mileage
- Phone use (some apps)
Low Mileage
If you're a remote worker, retiree or stay-at-home parent, you might look into low-mileage discounts. Drivers logging fewer than the average 10,000 miles per year may qualify. Remember, the mileage is based on the vehicle, so if you drive multiple vehicles, you might still qualify.
How to Get It:
- Update the annual mileage estimate with your insurer
- If they require verification, you might need to send service records, like receipts from your last two oil changes
- Usage-based insurance tracks mileage automatically, but you may still need to ask for the discount
Safety Features
Most modern cars are equipped with numerous safety features that can qualify you for discounts on your insurance. Make sure your Vehicle Identification Number (VIN) is correct to verify factory features and provide proof for any options you installed, such as a backup camera.
What Qualifies:
- Anti-lock brakes (ABS)
- Airbags (front & side)
- Electronic stability control
- Automatic emergency braking
- Lane-departure warning
- Backup camera
- Blind-spot monitoring
Anti-Theft Devices
Features that help prevent theft, like car alarms, GPS tracking systems (like OnStar), immobilizers, or VIN etching, can qualify for discounts. Factory systems are typically automatically applied, but aftermarket installations may require documentation.
Hybrid/Electric Vehicle
Environmentally friendly vehicles, such as electric, hybrid, and plug-in hybrid vehicles, often qualify for additional discounts for newer models (i.e., safer, more reliable) and often include advanced safety features.
New Car
If you have a new car in your fleet at home, you're likely already seeing a discount. Newer vehicles under three years old typically automatically qualify. This discount often expires after a few years once the vehicle is no longer "new."
Good Student
Full-time students under 25 with a 3.0 GPA or higher, and/or who sit on their college Dean's list or high school honor roll, may qualify for significant discounts thanks to their good grades. Maintaining a strong academic record shows responsibility and can translate to driving discounts for young drivers.
How to Qualify:
- Confirm your policy rewards good student status and that you (or your student) qualify
- Collect the required proof of good grades, such as a report card, transcript, or letter from the school
- Confirm how often you need to resubmit proof to retain the discount
Other Discounts
| Student Away at School | If your young driver's car stays at home while attending a boarding school or college a significant distance from home, you may be eligible for a discount since their car will likely only be driven during school breaks. |
| Military/Veteran | Active-duty personnel, reserves, veterans, and military families may qualify with proof of service through a military ID or DD-214 (for veterans). |
| Mature Driver (50+) | Seniors with a clean driving record may qualify for a mature driver discount. |
| Homeowner | Owning your own home may also qualify you for a discount, as homeowners statistically have fewer claims. This discount might require proof of ownership. |
| Alumni Association | If you are a member of your college or university's alumni association, you may qualify for discounts through certain insurers. |
| Professional/Trade Organization | Professional and trade associations also offer discounts to members. |
| Employer | Large employers, like Fortune 500 companies, government and state agencies, unions, and even some small businesses, have group discount agreements with insurers. |
| AAA | Many insurers also recognize AAA membership and offer discounts. |
| Loyalty/Tenure | If you've remained loyal to your insurance company for multiple years, you may qualify for a loyalty discount. However, it's important to shop around and consider your options as new customer discounts often offer more savings. |
| Marriage | If you've recently gotten married, update your insurance, since many insurers offer discounts to married couples as they're statistically less likely to get into an accident. This discount is usually combined with a multi-car discount. |
How to Actually Get These Discounts
Step 1: Audit Your Current Policy and Discounts
Log in to your insurance account or review your last insurance statement and note which discounts are currently applied, as well as your current premium.
Step 2: Make Your Checklist
Make a checklist of:
- Do I have the right insurance coverage?
- Do I drive less than the mileage I'm insured for?
Bundle Discounts
- Do I have home insurance elsewhere
- Do I have renters insurance elsewhere?
- Do I have motorcycle insurance or condo insurance elsewhere?
- Do I have another car insured through another provider?
- Do I pay monthly?
- Am I getting paper bills?
- Have I taken a defensive driving course in the last three years?
- Am I affiliated with any groups (alumni, employer, professional)
- Do I own my home?
- Am I a good driver with a clean driving history?
- Are any of my insured drivers good students?
- Do I have anti-theft devices?
- Am I a veteran?
- Am I a mature driver?
Step 3: Gather Proof
Gather proof for your eligibility, such as student transcripts, membership cards, and/or military IDs.
Step 4: Call Your Insurance
Call your insurance and say: "Hi, I'm reviewing my policy, and I've identified a few areas where I might be eligible for discounts that I'm not currently receiving, and I'd like to go through to confirm eligibility."
Ask about each applicable discount individually, specifically if it's currently applied to your policy, and if not, what steps you need to take to qualify.
End with asking if there are any other discounts you might qualify for that you haven't already discussed.
Step 5: Take Action on New Opportunities
If you find you're not currently eligible for a discount but with a few steps could be, take action to:
- Enroll in a usage-based program
- Sign up for a qualified driving course
- Bundle policies
- Set up paperless and autopay billing
- Submit documentation for affiliation or membership discounts
Step 6: Shop Around
- Even with all discounts, get car insurance quotes from three to five other companies
- Companies weigh factors differently
- One insurer's discounts may beat another's base rate
Key Things to Remember
- Discounts aren't automatic; you have to ask for them
- Many require documentation and periodic updates
- Life changes, such as getting married, buying a home, or changing jobs, may trigger new discounts
- Some discounts may trump others. For instance, new customer rates often beat loyalty rates
- Small discounts, like paperless and automatic payments, can add up to significant savings
- Ask what else you may be eligible for. You might be eligible for multiple.
- While not discounts, certain factors can affect your auto insurance policy rates, like credit scores, understanding what optional coverage you could drop (like comprehensive coverage or medical payments), or adjusting your deductible
FAQs
What car insurance discounts am I eligible for?
You may be eligible for multiple auto insurance discounts. Call your insurer and ask if you might be eligible for common discounts like: bundling home and renters insurance with auto, being a safe driver, being a good student, paying in full, driving low mileage, or others.
How much can car insurance discounts save?
Individual discounts differ depending on the driver, the insurance company, and other discounts you may already receive. The highest-impact discounts are bundled policy discounts, usage-based discounts, and good student discounts.
Do car insurance discounts stack?
Yes, most discounts stack and apply to your premium. However, insurers typically apply discounts sequentially to the remaining balance, rather than to the original amount. Additionally, some insurance companies cap the total discounts you can apply at one time.
How do I ask for car insurance discounts?
Call your insurer and ask to go through a full list of available discounts you think you qualify for. Ask specifically about each discount applicable to your situation. End with asking if there are any other discounts for which you qualify. Provide proof as requested.
What is the best car insurance discount?
Bundling home and renters insurance with your auto policy (15-25% off both policies) provides the largest single discount, perhaps saving as much as $400-800 a year. For young drivers, good student discounts (10-25%) are most valuable. Usage-based/telematics programs (10-30%) offer the highest potential savings for safe drivers. The "best" depends on your situation, but bundling is universally available and high-impact.
Are there hidden car insurance discounts?
Yes, many discounts are often overlooked because they offer a low impact. However, they can often be stacked with other discounts for more substantial savings. Examples include alumni and employer group, low mileage, homeownership, paid-in-full, early renewal, anti-theft device, and paperless billing discounts. These discounts often aren't automatically applied and require you to ask.
Do all insurance companies offer the same discounts?
No, discounts and eligibility requirements vary significantly by company. Always ask specific companies about their discount programs and compare total premiums after discounts, not just discount percentages.
