Car Insurance Discounts

If you are looking for the lowest rate on your car insurance, one great way to save money is by maximizing your discounts. Car insurance companies typically offer a variety of discounts, but the specifics vary between insurance carriers.

Car insurance discounts can cut your total policy premiums down anywhere from 10% to 45%, depending on the insurer and the discount type. Learn about some of the most common discounts that may be available to you.

Multi-Policy Discount

This is one of the biggest discounts available on a car insurance policy. Also known as bundling, this is when you purchase multiple types of insurance from the same insurance company. For example, you might buy home and auto insurance.

Some insurance companies offer a bundling discount as high as 20%. It is rare for someone to obtain cheaper insurance by separating their car and home insurance through different carriers. If you own a home, consider finding an insurance carrier that packages your car and home policies together.

Homeowner Discount

It might be surprising that owning a home gets you a discount on your car insurance. Insurance carriers often offer this discount to clients regardless of whether the home is insured with the same company.

Insurance companies reward homeowners because they often have more stability than a renter. A homeowner can double dip with this discount by combining it with the multi-policy discount.

New Car Discount

When you purchase or own a car that is less than three years old, you may qualify for a discount of up to 10% just for owning a newer model vehicle.

Car safety discounts

If your car has safety equipment like anti-lock brakes, air bags and daytime running lights, you may get a discount. Daytime running lights are typically very small discounts, but air bag discounts for full-front seat air bags can be as much as 40% applied to your medical payments or personal injury protection coverage.

Good driver discounts

 Car insurance companies love good drivers and often reward them with savings. A car insurance company will typically require you to be incident-free for a certain amount of time. For example, if you haven’t had any accidents in five years, Geico offers up to 26% in potential savings. If you haven’t had any accidents, car insurance claims or traffic violations, you could qualify for a discount. Good driver discounts often range between 10% to 40%.

Pay in full discount

 If you pay your full-term up front, car insurance companies typically offer a discount such as 10%.

Electronic Funds Transfer (EFT) discount

 If you pay in installments, you may be able to get a small discount for using automatic withdrawals.

Paperless discount

 If you’re willing to go paperless, you’ll get your policy documents and billing electronically. The insurance company may offer a small discount.

Online quote discount

 Some car insurance companies will offer a discount if you get an online car insurance quote and sign up for a policy. This can range from 4% to 12%.

Usage-based insurance program discount

 Your insurance company might offer usage-based insurance (UBI), which adjusts insurance premiums based on how often and how well you drive. Data is typically collected using a device installed using your car’s ODB-II port or collected from a smartphone app. Most UBI programs offer a discount for enrolling (between 5% to 10%) and then a discount based on your driving habits. The discount is typically applied at policy renewal time. If you’re a good driver, a typical UBI discount could be anywhere between 5% to 40%.

Note that a UBI discount might not apply to your entire policy.