It’s no secret that car insurance costs are getting out of hand. According to a recent analysis, the average cost of full coverage car insurance has reached $2,679 per year– or $223 per month.
With auto coverage taking up a growing portion of American budgets, it’s becoming increasingly essential to find ways to save. But many drivers are still leaving money on the table.
Here’s a guide to all of the available car insurance discounts that you may qualify for, so you can claim the savings you deserve.
Note: These tips should not be considered official insurance guidance. Please consult an insurance professional or broker when making decisions regarding insurance.
Why Discounts Matter
Even a small percentage off your premium can add up to substantial savings over a year. Insurance companies offer these discounts because they reward behaviors that reduce their risk, such as being a safer driver or a more reliable customer.
That’s all to say that car insurance discounts aren’t just free money. Oftentimes, they’re a way to get more accurate and affordable pricing based on your risk profile.
The Ultimate Checklist of Car Insurance Discounts
There’s a wide variety of potential car insurance discounts, including some you may not even have heard of. Remember, not all offers are available from every insurer, so it pays to shop around and ask specific questions.
1. Driver-Related Discounts
These discounts are based on your personal characteristics and driving habits.
- Good Student Discount: Many insurers offer a discount for high school or college students who maintain a certain GPA (ex: 3.0 or B average). Whether you’re a student yourself or you have one in your household, this is a great way for young drivers to reduce premiums.
- Safe Driver Discount / Accident-Free Discount: If you have a clean driving record free of accidents, violations, or claims for a certain period (ex: three to five years), you could qualify for significant savings. Some insurers might even offer this based on participation in telematics programs.
- Defensive Driving Course Discount: Completing an approved defensive driving course can not only make you a safer driver but also lower your insurance rates. This is especially useful for drivers with a few points on their license who are looking to reduce them, or simply for those wanting to refresh their skills.
- Low Mileage Discount: Do you work from home, use public transport, or simply don’t drive much? If your annual mileage falls below a certain threshold, you might be eligible for a low mileage discount. Less time on the road often means less risk.
- Good Driver Discount: This is a broad category that might encompass elements of safe driving and accident-free records, rewarding drivers with a consistently good driving history.
- Away at School Discount: If a young driver on your policy goes away to college or university and does not take their car with them, you might get a discount, especially if the school is a certain distance from home.
2. Policy-Related Discounts
These discounts are related to how you manage your insurance policies.
- Multi-Policy Discount / Bundling Discount: This is a huge money-saver! If you purchase multiple insurance policies from the same provider, you can often save a substantial percentage on both. Always ask about bundling options.
- Multi-Car Discount: Insuring more than one vehicle on the same policy with the same company almost always results in a discount for each vehicle.
- Pay in Full Discount: If you pay your entire premium upfront for the full policy term instead of making monthly installments, many insurers will give you a small discount.
- Paperless Discount: Opting to receive your policy documents and bills electronically instead of by mail can earn you a small discount, as it reduces administrative costs for the insurer.
- Autopay Discount: Setting up automatic payments from your bank account or credit card can also lead to a discount, as it ensures timely payments and reduces processing.
- Early Quote/Advance Quote Discount: Some insurers offer a discount if you get a quote and purchase a policy before your current policy expires (ex: 7-10 days in advance).
3. Vehicle-Related Discounts
These discounts are based on the features and safety of your vehicle.
- Anti-Theft Device Discount: If your car is equipped with factory-installed or aftermarket anti-theft devices, you can often get a discount because these devices reduce the risk of theft. This may include car alarms, immobilizers, or tracking systems, but it’s best to ask your insurer for specific requirements.
- New Car Discount: Some insurers offer a small discount for insuring a brand-new vehicle, particularly if it’s less than a certain number of years old.
- Safety Feature Discount: Vehicles equipped with specific safety features like anti-lock brakes (ABS), airbags (especially side airbags), daytime running lights, electronic stability control, and adaptive cruise control can qualify for discounts. These features demonstrably reduce the risk of accidents or the severity of injuries.
- Hybrid/Electric Vehicle Discount: As part of promoting environmentally friendly vehicles, some insurers offer discounts for hybrid or electric cars.
- Vehicle Tracking/Telematics Discount: Many insurers now offer programs where a device is installed in your car to monitor your driving habits, such as speed, braking, mileage, and time of day driven. If you demonstrate safe driving, you can earn significant discounts. This is often called a “usage-based insurance” discount.
- Garage Parking Discount: If you park your car in a garage overnight, it may be less susceptible to theft or damage, leading to a small discount.
How to Maximize Your Car Insurance Savings
Once you’ve identified any discounts and programs you may qualify for, it’s time to figure out how to convert them to savings.
- Be Proactive: Don’t wait for your insurer to offer discounts. Call them and specifically ask about every discount on this list. Provide any necessary documentation, such as good student transcripts and defensive driving course certificates.
- Review Your Policy Annually: Life changes, and so should your insurance policy. Re-evaluate your coverage and potential discounts every year, especially at renewal time. Have you moved? Did you get married? Has your teenager gone to college? All these changes can impact your eligibility for discounts.
- Shop Around: While your current insurer might offer some discounts, another company might offer more, or a combination of discounts that results in a lower overall premium for the same coverage. Get quotes from at least three different providers.
- Maintain a Clean Driving Record: This is the most impactful long-term strategy. Avoiding accidents and traffic violations not only keeps your record clean but also directly qualifies you for safe driver discounts.
- Consider a Higher Deductible: While not a discount, raising your deductible (the amount you pay out-of-pocket before insurance kicks in) can significantly lower your premium. Just make sure you can comfortably afford the higher deductible if you need to make a claim.
- Improve Your Credit Score: In many states, your credit score can influence your insurance rates. A higher credit score often indicates greater financial responsibility, which insurers may reward with lower premiums.
- Know Your Vehicle’s Features: Be aware of all the safety and anti-theft features your car has. Don’t assume your insurer knows; proactively tell them and find out if any features qualify you for a discount.
- Ask About Group Discounts: Are you part of an alumni association, a professional organization, or a specific employer? Many insurance companies partner with various groups to offer exclusive discounts to their members. Always inquire if your affiliations qualify you for any group rates.
Balancing Price with Reliability
When looking for the best deal on car insurance, it’s easy to lose sight of why you have coverage in the first place. While it’s good to save money, you also want a reliable plan that kicks in when you need it. In other words, the cheapest policy isn’t always the best if it leaves you underinsured in the event of a claim.
As you’re comparing your options, pay attention to the level of service you get from each company. If they seem uninformed, unprofessional, or hard to get a hold of, there’s a good chance that’s how they’ll be when you need to use your insurance.
Start Saving on Insurance
Finding car insurance discounts isn’t about luck; it’s about being proactive and persistent about finding the programs available to you.
Don’t leave money on the table. Contact your insurer to ask about potential savings, and gather quotes from a few different carriers to make sure you’re getting the best deal.
Shop now and save!
