Car Insurance Discounts: Your Guide to Getting the Best Price

Car insurance can be expensive, but there are ways you can cut down on your monthly premium by finding a discount. The best car insurance companies offer discounts for a variety of reasons, including owning a home, getting good grades if you’re in high school or college and driving safely.

Before you research individual insurers, it’s a good idea to know the general kinds of discounts available.

Here’s a more detailed look at how to get car insurance discounts:

Active or retired members of the military often qualify for discounts. Those who work for companies affiliated with the insurer may also qualify, as do many federal employees. In addition to military and employer discounts, many carriers also offer other affinity discounts. For example, alumni from some universities and members of fraternities or sororities might be eligible for discounts. Teachers, police officers, firefighters and those working in the medical field may also qualify.

In most cases, you will find small discounts for vehicles with anti-lock brakes, dual airbags or other safety features. Discounts may apply to personal injury or collision portions of insurance coverage only. Auto insurers may also provide a discount if you buy a new car or own an electric or hybrid vehicle.

Auto insurers may give you a discount if you own a home, even if you don’t buy homeowners insurance. Insurers also offer discounts for older adults (generally 55 years or older), although some require you take a defensive driving course to qualify.

Many insurers offer a discount for students who earn at least a B average, and some companies include an extra discount if you have a student away from home (with limited car access) on your policy.

Have you had a policy for over three years without an accident? Did you take a defensive driving course? If you have teenagers on your policy, did they pass driver’s education classes? All of these factors can help you qualify for discounts.

If you don’t mind sharing your data, you could save hundreds of dollars at some companies through programs like Allstate’s Drivewise. These programs use telematic technology — which tracks your driving behavior with a mobile app or device that plugs into your car’s diagnostic port — to offer discounts and rewards or to create a customized insurance rate. Telematics programs may give you a discount depending on your driving behavior but your base insurance rate won’t be affected.

However, a usage-based policy like Progressive’s Snapshot determines your insurance rate partially based on your driving behavior. Other factors such as your age, gender, and car make and model are still factored in with these types of policies. Usage-based policies may increase your rates if you’re not a safe driver.

Insurers reward loyalty with discounts for longtime customers and those who have more than one product. For example, you might qualify for a discount when you move your homeowners insurance to your auto insurance company. You can also benefit from having multiple vehicles insured with the same company.

A word of caution about loyalty discounts: Some auto insurers use a practice called price optimization to charge loyal customers higher rates because they’re less likely to switch companies. That’s why it’s so important to compare car insurance rates, even if you’re receiving a loyalty (or other) discount. Your final rate may still be higher with a loyalty discount at your current insurer than with another company.

Discounts around how you buy and pay for your policy are some of the easiest to qualify for. Many insurers will reward customers for paying in full, switching to automatic payments or receiving electronic statements. Some companies offer a continuous coverage discount for customers who sign onto a new policy before the old one expires, often seven days before the current term ends.

American Family has the most car insurance discounts out of the 10 largest auto insurance companies by market share, followed closely by Liberty Mutual. While discounts vary by insurer, all 10 offer multiple policy and good student discounts.

Although there is no such thing as an insurer with the “best” discounts, you’ll need to research the different kinds of programs and qualifications to see which company could save you the most depending on your specific needs.

Here are the discounts offered by the biggest auto insurers across the country. We’ve listed the insurers with the largest number of discounts first.

American Family offers the most discounts out of the nation’s largest insurers. With almost 20 different discounts available, almost anyone can find a way to lower their car insurance rate.

American Family doesn’t include discount amounts on its website, but you can contact an agent to find out more details.

Liberty Mutual offers a wide range of discounts, but those looking to maximize their savings may want to consider how they pay for their policy and when. Liberty Mutual offers separate discounts for paying in full, paperless policies, online purchases and automatic payments.

Top Liberty Mutual discounts:

Liberty Mutual’s website offers limited information on discount amounts as most vary by state. Amounts specified include:

• Up to 30% through Liberty Mutual’s telematics good driver program.

• An average savings of 12% when you purchase your policy online.

Geico offers a comprehensive discount list — more than many other insurers — so you’ll likely find at least one that works for you. The company offers employment, service and membership-affiliated discounts for over 500 groups including active or retired federal employees.

Top Geico discounts:

• Up to 40% off if your car has airbags for both the passenger and driver, up to 25% for driver only.

• Up to 26% off most coverage when you haven’t had an accident for five years.

• Up to 25% off if your car has an anti-theft system.

• Up to 25% off for military members on emergency deployment.

• Up to 25% off most car insurance coverage when you have more than one car insured with Geico.

Travelers offers discounts in every category, but it generally rewards good drivers, loyalty and customers who pay on time.

Top Travelers discounts:

• Up to 23% if you have no accidents, violations or claims in the past five years, up to 10% if you have a clean record for the past three years.

• Up to 20% through its telematics safe driving program.

• Up to 15% if you have continuous coverage.

• Up to 15% if you pay your premium on time consistently.

• Up to 13% when you bundle multiple policies such as auto and home insurance.

Progressive discounts vary, likely saving customers who bundle their policies the most across the board. Customers who don’t have more than one policy can still lower their rates through one of the company’s 12 other discounts.

Top Progressive discounts:

• An average of $145 through its telematics safe driver program.

• Up to 12% if you have more than one vehicle listed on your policy.

• Almost 10% if you own a home.

• Up to 8.5% for signing your policy online.

State Farm’s discount policies favor good driving and customer loyalty. The specific discount programs apply to many drivers, but there aren’t a lot of programs available.

Top State Farm discounts:

• Up to 25% off for student drivers, up to age 25, who maintain good grades.

• Up to 20% for multiple cars insured with State Farm.

• Up to 17% off for multiple kinds of insurance with State Farm.

Farmers provides specific details about its discounts by state, including lower rates for customers who pay in full, bundle multiple policies and drive an electric or hybrid car. While discount amounts aren’t given for most offers, its website states you can save up to 15% by using its telematics driving program, with an additional 10% off if you have a young driver in your household.

Allstate’s discount policies are broadly defined but somewhat limited in number. The company favors vehicle safety and customer loyalty when offering savings.

Top Allstate discounts:

Allstate doesn’t give many details on the amount you can save per discount on its website. It does state that you can save up to 10% on your auto insurance when you bundle multiple policies.

Nationwide provides the fewest discounts on car insurance policies out of the 10 largest insurers. Despite this, there are still plenty of ways drivers can save. Discount amounts aren’t available on the Nationwide website, although it does state customers save $710 per year on average when they bundle home and auto insurance policies.

USAA is available to members of the military and their family members only. The company has a narrow set of discounts, led by savings for active-duty members that depend on rank.

Top USAA discounts

• Up to 10% for drivers under age 25 if their parents have USAA insurance.

*Although USAA has a high number of discounts, it’s listed last because it is only available to active-duty military, veterans and their families.

Discounts aren’t always straightforward. Just because one company gives an accident-free discount after three years doesn’t mean the next company will have the same guidelines. Here are some tips when looking at auto insurance discounts.

Before a discount is applied, your insurance rate is calculated. Your base rate is determined by factors like your age, gender, make and model of your car, driving history and location. After your agent has your base rate, any surcharges are added for traffic violations like accidents, speeding tickets or DUIs. Then, your discount is applied.

You don’t need to wait until you renew your policy to see if you’re eligible for a discount. Review your company’s website or use our car insurance discount calculator. Once you have an idea of the discounts available, ask your agent if you qualify. Some discounts are automatically applied, but not all.

When shopping for a car insurance policy, always talk to a representative to confirm available discounts, since terms can change over time.

Although discounts can save you money on your car insurance, remember to look at the overall cost and not just the number of discounts you receive. For example, a company that offers no discounts could end up providing a lower premium than another insurer that charges a higher premium and offers 20 discounts. Still, consider discounts when you’re shopping around and talk to your insurance agent to maximize your savings.

To find the best price and company for you, shop around for car insurance quotes at least once a year. Comparing rates from three or more companies will help you find the lowest premium.