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Car Insurance Discounts: What You Need to Know

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Eric Stauffer is a former insurance agent and banker turned consumer advocate. His priority is to help educate individuals and families about the different types of insurance they need, and assist them in finding the best...

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UPDATED: Mar 19, 2020

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Looking to save some cash on your car insurance policy? Aren’t we all? There are so many different ways to help cut down on your car insurance, such as having a clean driving record and a good credit score.

But there’s another way for you to save, car insurance discounts.

There are so many different kinds of car insurance discounts available out there now that you might not even know about! Discounts you qualify for that you didn’t know existed.

In this guide, we’ve broken down the most common car insurance discounts available to drivers, so keep reading to find out more!

Looking to compare your insurance rates? Use our FREE online tool now, all you need is your zip code.

What is a Car Insurance Discount?

To kick off this guide, we’ll talk briefly about what exactly a car insurance discount is, and how they can help to save you money.

A car insurance discount is a deduction from the usual cost of your car insurance policy, which is typically given for a variety of different factors.

So depending on what kinds of insurance discounts your insurance company has available, you can qualify for those discounts and have them added to your policy to help reduce your rates.

The wonderful thing about discounts as well is that you can qualify for more than just one. That means that if you meet the requirements of multiple car insurance discounts, they all can be credited toward your insurance rates.

Something important to note, however, is that not all discounts may not be available in all states or from all insurance providers. You will need to check with your state and provider to see what discounts are available for you.

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What Kinds of Car Insurance Discounts Are There?

There are so many different kinds of car insurance discounts out there, that it can be a little mind-boggling!

In this section, we’ll break down the most common categories of car insurance discounts such as customer loyalty, demographics, affiliation, driving history/training, vehicle equipment, and payment method.

Keep reading to find out more.

Car Insurance Discounts by Customer Loyalty

This type of discount would apply mostly for those of you who have a pretty good relationship already established with your insurance provider.

There are several types of customer loyalty discounts you could qualify for; bundling, early renewal, multi-car, and overall customer loyalty.

Types of Customer Loyalty Discounts:

The “Bundling” discount is applied when a driver has other policies (home, life, or health) with the same insurance provider.

The “Early Renewal” discount is when a driver signs (“renews”) before their policy expires.

The “Multi-Car” discount is when a driver insures more than one vehicle under the same insurance provider.

The overall “Customer Loyalty” discount is when a driver has their policy in effect for more than one consecutive year.

How Much You’ll Save with Customer Loyalty Discounts

The following is the typical amounts that you can see for these discounts:

Customer Loyalty DiscountAverage Savings
Bundling 5-10%
Early Renewal10%
Multi-Car10-25%
(overall) Customer Loyalty15-25%
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How to Qualify for Customer Loyalty Discounts

In order to qualify for the “Bundling” discount, you will need to have an additional insurance policy (home, health, etc.) with the insurance provider.

In order to qualify for the “Early Renewal” discount, you will want to ensure that you are on top of your insurance policy, and the date in which your policy expires.

Signing before your insurance policy expires ensures this discount, but if you fail to sign before the end period, you will have to wait until after you get your new insurance policy and start again.

If you want to qualify for the “Multi-Car” discount, you will need to insurance at least one other vehicle with your insurance company.

To qualify for the overall “Customer Loyalty” discount, you will want to remain with your insurance provider for at least a year. If you decide to change insurance providers during this period, you will start over again with your need provider.

Car Insurance Discounts by Demographic

Simply just being in a particular demographic can actually also help to save you a few extra bucks on your insurance policy.

A few of the most common types of demographic discounts include good student, homeowner, low-income, and senior discounts.

Types of Demographic Discounts:

The “Good Student” discount applies to high school/college students (under the age of 25) with at least a 3.0 (B) grade point average.

The “Homeowner” discount is when a driver also owns a single-family home or condominium (in addition to their vehicle).

The “Low-Income” discount is when a driver meets the state-mandated income requirements (state-dependent on what each state considers a “low-income”.

The “Seniors” discount is typically a state-mandated discount that can only be eligible for drivers over a particular age limit (depends on your state what that age limit is).

How Much You’ll Save with Demographic Discounts

The following is the typical amounts that you can see for these discounts:

Demographic Car Insurance DiscountsAverage Savings
Good Student15-25%
Homeowners5-15%
Low-IncomeVaries (state dependent)
Seniors15-35%
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How to Qualify for Demographic Discounts

In order to qualify for the “Good Student” discount, you will need to be a student (less than 25 years old) currently enrolled in high school or college. With this, you will also need to have, and maintain at least a 3.0 (B) grade point average.

If your grade point average dips below this, if you un-enroll from high school/college, or are over 25 years old, you will no longer qualify.

For those students who are obtaining their GED, unfortunately, this discount will also not apply to you.

As long as you own your own home, you will qualify for the “Homeowner” discount. You can not be just renting a house to qualify, but you must have purchased and obtained the rights to a home.

The “Low-Income” discount varies from state to state, as to qualify for this discount means that you will need to meet your state’s mandated requirement for income-eligible drivers.

If you’re looking to apply for a state-sponsored insurance program for low-income, currently only California, New Jersey, New York, and Hawaii have programs, as follows:

  • California –  California Low-Cost Automobile (CLCA)
  • New Jersey – Special Automobile Insurance Policy (SAIP)
  • New YorkNew York Automobile Insurance Plan (NYAIP)
  • Hawaii – Assistance to the Aged, Blind and Disabled (AABD) services

To qualify for the “Senior” discount, you will need over the particular age limit that your state mandates. Make sure to check your state’s DMV website for information on what is considered “Senior” for your state.

Car Insurance Discounts by Affiliation

Belonging to a particular organization can actually help save you some extra cash!

The most common affiliation discounts are affinity, military, and emergency roadside assistance.

Types of Affiliation Discounts

The “Affinity” (also known as “Affiliation”) discount is obtained through a driver’s employer, school, team, club or other membership.

The “Military” discount is for drivers who are active military personnel or are in a household with active military personnel.

The “Emergency Roadside Assistance” discount is for those drivers who have purchased roadside assistance, or if the driver is driving a car that comes with it.

How Much You’ll Save with Affiliation Discounts

The following is the typical amounts that you can see for these discounts:

Affiliation Car Insurance DiscountsAverage Savings
Affinity25%
Military15% on base, 90% for deployed
Emergency Roadside Assistance5%
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How to Qualify for Affiliation Discounts

In order to qualify for the “Affinity” discount, you will need to find out what kinds of discounts are available to you through your employer, your school, your team, any clubs you belong to, and any memberships you have.

The “Military” discount will only qualify for those individuals who serve in some branch of the military and is considered “active personnel”. If you are not active, retired, or discharged, you may not qualify for this discount.

To obtain the “Emergency Roadside Assistance” discount, you will need to purchase this from your insurance provider. In addition, you can also qualify for this if you have purchased Emergency Roadside Assistance from an organization such as AAA.

Check out the video below for information on Geico’s Emergency Roadside Service, right at your fingertips.

Car Insurance Discounts by Driving History/Training

Do you have a good driving record? Maybe you’ve gone above and beyond and decided to take a driving course to help improve your driving skills?

Well, if you have, you’ll be rewarded for your efforts through the various driving history and driving training discounts available.

We’ll cover the most common discounts in this category; accident-free, defensive driver education, driving training, good/safe driver, and usage/low-mileage.

Types of Driving History/Training Discounts

The “Accident-Free” discount is for drivers who have had no “chargeable” accidents (those that cost the insurer money) during the past three to five years.

The “Defensive Driver Education” discount is for drivers who have taken a specific defensive driver education course. This discount may be limited to seniors, teens or inexperienced drivers; and can only be through an approved course.

The “Driving Training” discount is for drivers under the age of 21 years old who have taken a specific (and approved) driving training course.

The “Good/Safe Driver” discount is for drivers who have had no at-fault accidents, or moving violations, within the past last three to five years.

The “Usage/Low-Mileage” discount is for drivers who typically drive only between 5,000 to 15,000 miles per year (depending on insurer requirements).

How Much You’ll Save with Driving History/Training Discounts

The following is the typical amounts that you can see for these discounts:

Driver History/Training DiscountsAverage Savings
Accident-Free5%
Defensive Driver Education10%
Driving Training8 - 10%
Good/Safe Driver20%
Usage/Low-Mileage2%
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How to Qualify for Driving History/Training Discounts

In order to qualify for the “Accident-Free” discount, you will need to have not been involved in a “chargeable” accident for a period of three to five years. But what exactly is a chargeable accident?

A “chargeable” accident is an accident in which you needed to file a claim with your insurance provider, and they had to provide you with funding for this claim.

The “Defensive Driver Education” discount can only be applied if you have gone through an approved course designed for inexperienced drivers (such as teen drivers, seniors, etc.). If you do qualify, you can check out the Defensive Driving School to see if there are any approved courses available near you.

In order to qualify for the “Driving Training” discount, you will need to be under the age of 21 years old and will need take some sort of driver training course.

But what is the difference between a defensive driving course and a driver training course?

Typically, those individuals taking a defensive driving course have already received a ticket from law enforcement due to poor driving. Driver training is typically for those individuals learning to drive for the first time.

You can qualify for the “Good/Safe Driver” discount as long as you’ve had no accidents in which you were the one who caused the accident, or if you haven’t had any moving violations during last three to five years.

https://www.youtube.com/watch?v=NqwjoVi2Ct8

The “Usage/Low-Mileage” discount will be available if you, on average, have a shorter commute. This is highly dependent upon your insurance provider, as a lot of providers will already give you a discounted rate for having a shorter commute time.

If they do not already provide this discounted rate, you can qualify for this discount if you drive anywhere between 5,000 to 15,000 miles per year.

Car Insurance Discounts by Vehicle Equipment

Just having particular equipment in your vehicle, or a specific type of vehicle, can help earn you extra discounts.

Some of the most common discounts in this category are anti-lock brakes, anti-theft, green/hybrid vehicles, new car, and safety restraints.

Types of Vehicle Equipment Discounts

The “Anti-lock Brakes” discount is for drivers who have anti-lock brakes equipped in your vehicle.

The “Anti-Theft” discount is for drivers who have installed anti-theft equipment such as alarms, tracking systems, and kill-switches.

The “Green/Hybrid Car” discount is for drivers who own (or lease) a hybrid/electric vehicle.

The “New Car” discount is for drivers who own a vehicle that is three years old or less.

The “Safety Restraints” discount is for those who have an older vehicle with factory-installed airbags.

How Much You’ll Save with Vehicle Equipment Discounts

The following is the typical amounts that you can see for these discounts:

Vehicle Equipment DiscountsAverage Savings
Anti-lock Brakes10%
Anti-Theft5 - 20%
Green/Hybrid Car10%
New Car10%
Safety Restraints5%
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How to Qualify for Vehicle Equipment Discounts

To qualify for the “Anti-lock Brakes” discount, you will simply just need to be able to prove that your vehicle has anti-lock brakes to your insurance provider.

The “Anti-Theft” discount is similar to the “Anti-Lock Brakes” discount, as you will need to provide proof to your insurance provider that you have at least one type of anti-theft equipment installed in your car, which may have to be factory-installed.

In order to qualify for the “Green/Hybrid Car” discount, you will need to find out which green/hybrid vehicles are approved for this discount per your insurance provider.

The “New Car” discount will apply for any driver who has a new vehicle, classified as any car no older than 3 years old.

The “Safety Restraints” discount will only apply to drivers who have a vehicle with factory-installed airbags. This would be typically seen in vehicles from the 1990’s or earlier. Be sure to check with your insurance provider to find more details on which specific vehicles would qualify.

Car Insurance Discounts by Payment Method

How you pay for your insurance coverage can also actually provide you with additional discounts. By far, this is probably one of the easiest categories to get insurance discounts.

The most common types of discounts in this category are auto-pay, paid in full, and paperless.

Types of Payment Discounts

The “Auto-Pay” discount is for drivers who have chosen to pay for their insurance coverage by setting up an automated payment from their checking account.

The “Paid in Full” discount is for drivers who have paid their insurance premiums in its entirety at the start of their policy.

The “Paperless” discount is for drivers who’ve opted to not have paper statements, and simply view and pay their bills online.

How Much You’ll Save with Payment Discounts

The following is the typical amounts that you can see for these discounts:

Payment DiscountsAverage Savings
Auto-Pay$45 - $50 / year
Paid in Full5 - 10%
Paperless3%
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How to Qualify for Payment Discounts

In order to qualify for the “Auto-Pay” discount, you will need to set up an automated payment system with your insurance provider. Link it to your checking account, and you won’t even need to worry about making your payments on time anymore! It’ll automatically withdraw the payment for you.

If you would like to qualify for the “Paid in Full” discount, you will need to ensure that you have paid your premium in full each month. If you are on top of your finances, this will be an easy discount to obtain.

The “Paperless” discount will be applied to any driver who opts to have their car insurance information online as opposed to having printed statements/information sent to them each month.

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Which Car Insurance Discounts Are the Most Worth It?

Now that you know what kinds of car insurance discounts are available to you, but which ones are most worth it for you?

This can be high up to your own opinion, but based on a few different factors, we can narrow out some of the discounts that would be most worth it for you!

In the table below, we’ll display the car insurance discounts from the highest average savings to the lowest.

DiscountAverage SavingsCategory
Affiliation or "affinity"25%Affiliations
Good or safe driver20%Driving History
Senior15 - 35%
Demographic
Good student
15 - 25%Demographic
Customer Loyalty15 - 25%Customer Loyalty
Military15% on base, 90% for deployedAffiliations
Multi-car10 - 25%Customer Loyalty
Anti-lock brakes10%Equipment-related
Defensive driving course10%Driver Training
Early signing/renewal10%Customer Loyalty

Green/hybrid car10%Equipment-related
New car10%Equipment-related
Driver Training8 - 10%Driver Training
Anti-theft5 - 20%Equipment-related
Bundled 5 - 10%Customer Loyalty
Paid-in-full5 - 10%Payment
Homeowner5 - 15%Demographic
Accident-free5%Driving History
Emergency road assistance5%Affiliations
Safety; passive restraint and airbag5%Equipment-related
Paperless3%Payment
Usage or low-mileage2%Driving History
Auto-pay$45 - $50 / yearPayment
Low income or occupationVariesDemographic
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So on average, the discounts that will save you the most are the “Affinity” and the “Good/Safe Driver” discounts.

Lastly, we’ll quickly talk about which of these categories will require the least amount of work from you to obtain the discounts, and which will require the most work?

Based on effort, the categories you will have to do the least amount of work for are the Payment and Affiliation categories. Why?

You can obtain pretty much all of the payment discounts online, and with just a few clicks of a button, you could potentially acquire all three of them.

The affiliation category is also easiest as most simply require you simply check with any organizations you already belong to (your employer, your team, your school, etc).

With the exception of the “Emergency Roadside Assistance” discount, which you would need to acquire, all others simply are just through things you are already associated with.

Discount categories that will require the most work would be the Vehicle Equipment and Driving History/Training categories.

To qualify for most of the discounts in this category, if your vehicle does not already have the equipment listed, you will need to take your vehicle to the dealership/car shop in order to have these parts installed. If you already do have these pieces of equipment installed, then this discount category would be easy to obtain.

Driving History and Training is by far the hardest discount category to receive, and to maintain, as it has mostly to do with your own driving abilities.

If you are able to obtain one of the discounts in this category, with the exception of the training courses, you will have to maintain very safe driving practices in order to keep your discount.

If you were to, for example, have the “Accident-Free” discount, but end up getting into an accident a few months later, this discount is taken away. Not only that, but then the clock starts all over again for you to be able to apply for the discount again.

Who Offers What Discounts?

We’ll now briefly touch on who offers what discounts.

The extensive table below displays the type of discount compared to which providers currently offer this discount to drivers.

Auto Insurance Discounts by Company
Auto Insurance Discounts21st CenturyAAAAllstateAmerican FamilyAmeripriseAmicaCountry FinancialEsuranceFarmersGeicoLiberty MutualMetLifeNationwideProgressiveSafe AutoSafecoState FarmThe GeneralThe HanoverThe HartfordTravelersUSAASources:
Adaptive Cruise Controlxxxxhttp://www.21st.com/car-insurance-by-state.htm
Adaptive Headlightsxxxxxxxxhttp://autoclubsouth.aaa.com/Insurance/Auto_Insurance_Quote.aspx
Anti-lock Brakesxxxxxxxxxxxxxxxxxxxxxxhttps://www.allstate.com/auto-insurance/auto-insurance-discounts.aspx
Anti-Theftxxxxxxxxxxxxxxxxxxxxxxhttps://www.amfam.com/resources/discounts
Claim Freexxxxxxxxxxxxxxxxxxxxxxhttps://www.ameriprise.com/auto-home-insurance/Costco/insurance-choices/auto/auto-insurance-discounts.asp
Continuous Coveragexxxxxxxxxxxxxxxhttps://www.amica.com/en/products/auto-insurance/discounts.html
Daytime Running Lightsxxxxxxxxxxxxxxxxxxhttps://www.countryfinancial.com/en/insurance/auto-recreational/auto.html
Defensive Driverxxxxxxxxxxxxxxxxxxxxxxhttps://www.esurance.com/insurance/car/discounts
Distant Studentxxxxxxxxxxxxxxxhttps://www.farmers.com/faq/discounts/#autodefinitions
Driver's Edxxxxxxxxxxxxxxxxxxxxhttps://www.geico.com/save/discounts/car-insurance-discounts/
Driving Device/Appxxxxxxxxxxxxxxhttps://www.libertymutual.com/auto/affordable-car-insurance
Early Signingxxxxxxxxxxxxxxhttps://www.metlife.com/insurance/auto-insurance/car-insurance/
Electronic Stability Controlxxxxxxxxxhttps://www.nationwide.com/car-insurance-discounts.jsp
Emergency Deploymentxhttps://www.progressive.com/auto/car-insurance-discounts/
Engaged Couplexhttps://www.safeauto.com/about/faqs
Family Legacyxxxxxxhttps://www.safeauto.com/car-insurance/car-insurance-for-teens
Family Planxxxxxhttp://www.safeco.com/auto-insurance/discounts
Farm Vehiclexxxxhttps://www.statefarm.com/insurance/auto/discounts
Fast 5xhttps://www.thegeneral.com/car-insurance/basics/cheap-flexible/
Federal Employeexxxxhttp://www.hanover.com/connections-smart-savings.html
Forward Collision Warningxxxxxxxhttps://www.thehartford.com/aarp/car-insurance
Full Paymentxxxxxxxxxxxxxxxxxhttps://www.travelers.com/personal-insurance/auto-insurance/discounts-advantages.aspx
Further Educationxxxxxxxxxhttps://www.usaa.com/inet/wc/advice-auto-lowerautoinsurance
Garaging/Storingxxxxxxhttps://www.usaa.com/inet/wc/faq_Automatic_License_index
Good Creditxxxxhttps://www.usaa.com/inet/wc/auto_insurance_teen_driver_main
Good Studentxxxxxxxxxxxxxxxxxxxxxxhttps://www.usaa.com/inet/pages/auto_event_insurance?akredirect=true
Green Vehiclexxxxxxxhttps://www.usaa.com/inet/pages/auto_insurance_driving_research_discount_main
Homeownerxxxxxxxxxxxxxxxxxxhttp://www.bankrate.com/finance/insurance/car-insurance-discounts.aspx
Lane Departure Warningxxxxhttp://www.naic.org/documents/web_market_share_160301_2015_property_lob.pdf
Life Insurancexx
Low MileagexxxxxxxxxxxxxxxxxxxDisclaimers
Loyaltyxxxxxxxxxxxx*Discounts and their availability vary by state and eligibility requirements
Marriedxxxxxxxxxxxxxx*Safety Features are not always listed as "discounts" but almost always help lower the rate
Membership/Groupxxxxxxxxxxx
Militaryxxxxxxxxxxx
Military Garagingx
Multiple Driversxx
Multiple Policiesxxxxxxxxxxxxxxxxxxxxx
Multiple Vehiclesxxxxxxxxxxxxxxxxxxxxx
New Addressx
New Customer/New Planxxx
New Graduatex
Newer Vehiclexxxxxxxxxxxxxxxx
Newly Licensedx
Newlywedsx
Non-Smoker/Non-Drinkerx
Occasional Operatorx
Occupationxxxxxxxxxxxx
On Time Paymentsxxxx
Online Shopperxx
Paperless Documentsxxxxxxxx
Paperless/Auto Billingxxxxxxxxxxxxxxxxx
Passive Restraintxxxxxxxxxxxxxxxxxxxxxx
Recent Retireesxx
Renterxxx
Roadside Assistancexx
Safe Driverxxxxxxxxxxxxxxxxxxx
Seat Belt Usex
Senior Driverxxxxxxxxx
Stable Residencexxxx
Students & Alumnixxxxxx
Switching Providerxxxxxxxxxxx
Utility Vehiclexxxx
Vehicle Recoveryxxxxxxxxxxxxxxxxxxxxx
VIN Etchingxxxxxxxxxx
Volunteerx
Young Driverxxxxxx
Discounts Provided #21212927182726343432383835362230202022382828
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Tips on Getting Car Insurance Discounts

Now that you know all of this information, we’ll give you a few tips to help get you the car insurance discounts you want and need.

Shop, shop shop! Always shop around and do your research on the discounts you think you qualify for, and compare that to your current insurance provider’s offerings (or another insurance provider if you’re looking to switch).

Bundle up! If you’re also in the market for other types of insurance coverage, see if you can get all of your insurance coverage through one provider.

Come prepared! When you are looking into the different car insurance discounts out there for you, come prepared to your insurance provider with the proof and information they need to apply these discounts to you. Receipts, print out copies, whatever you have, make sure you have it on hand.

Make it a yearly adventure! If you didn’t qualify for one discount one year, make sure you check in next year to see if you qualify then. Time is your friend, so make sure to use it to your advantage.

Be logical with spending! Instead of doling out a bunch of money for some of the fancier car insurance discounts, try going for some of the discounts you can qualify for that won’t cost you as much (or at all).

That’s it, you’ve made it to the end of this guide! We hope this was helpful for you, and can be useful when it comes time for you to start looking for car insurance discounts.

If you want to start comparing your insurance rates today, make sure to use our FREE online tool below.

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About Eric Stauffer

Author: Eric StaufferI am a former insurance agent and banker turned consumer advocate. My priority is to help educate individuals and families about the different types of insurance they need, and assist them in finding the best place to get it.

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