How Can I Get a Discount on My Car Insurance?
Posted on January 28, 2021 in Insurance
Unless public transport can get us everywhere we need to go, a car is an expensive necessity. But, the costs really stack up, and even have the potential to put you in debt. When you factor in a car note, gas, maintenance, insurance, and tax, most car owners are looking at anywhere from $500 to $900 a month. The average car owner spends $773.50 a month on their car. Luckily, there are discounts that can lower your car insurance premiums. From energy-efficient to safe driver discounts, there’s a discount out there for just about everyone. You only have to know how to find them!
How to Find Auto Insurance Discounts
If you’re interested in saving money, then don’t just sit on your laurels! Look, compare, and ask.
Some discounts are automatic like safe driver discounts, but some you have to request. Also, discounts vary from company to company and state to state, so compare insurance quotes for the maximum savings.
Unfortunately, car insurance ads can be misleading. Many auto insurance discounts list potential savings up to 30% off or more. Just because the company offers a discount doesn’t mean YOU will get that much off.
Some car insurance companies will discount only part of your bill. For example, installing an anti-theft device may only lower the comprehensive coverage section of your bill. Because anti-theft devices aren’t cheap, you need to evaluate the savings to see if it’s worth making the investment.
Here’s the big one! Remember this! Some car insurance companies put limits on how much you can save via discounts. You may qualify for a host of discounts, so you get super excited about saving money. However, the company can limit you to a 25% off max savings. So, get those quotes and pay attention to the fine print, especially if you do delivery and are adding in commercial rates for something like Shipt car insurance.
What Are The Common Discounts for Car Insurance?
Good Driver Discounts
All insurance companies run your license and look at your MVR (motor vehicle record) for good driving. If you’ve had an accident in the past 3 to 5 years, don’t expect the best rates. If you’re accident-free though, you can get safe driver discounts and some awesome car insurance rates. Safe driver discounts may save you up to 40%.
If you take a defensive driving course, you may be able to save some money, too. Defensive driver discounts are mandated by some states.
Similar to safe driver savings, usage based insurance (UBI) discounts can save you money by monitoring how much you drive and how well you drive. Insurance companies do this by sending you a simple device to install in your car or an app to download. You may get a small discount just for installing an UBI. If your usage reports show you’re a good driver, then you may be looking at a 5 to 40% savings when renewal time comes.
When you bundle, you save. Life, renter’s, home, boat, motorcycle, and car insurance can all be bundled and save you some serious dough. Insurance companies want your business, so this is a discount that will almost always be on offer. Expect to save 5 to 25% when you bundle.
Save 8 to 25% on your car insurance premiums when you insure more than one car at the same company.
Vehicle Safety Savings
Depending on your car’s equipment, your car safety features may bring some savings. Airbags and anti-lock brakes qualify as safety equipment. Full frontal airbags may give you as much as 40% savings on your personal injury protection.
If your car is outfitted with anti-theft equipment like VIN etching or GPS, you may see a 5 to 25% savings on your comprehensive coverage. Some car insurance companies only offer this discount for factory installed anti-theft while others allow you to add it later and qualify. So once again, pay attention to the details.
New Car Discounts
If you drive a car less than 3 years old, you may qualify for a small discount of 10 to 15%. But, remember that newer cars cost more to insure because new cars are more costly to replace. So in the end, this vehicle discount may not save you anything at all.
Good Student Savings
Teenagers can be costly to insure due to being young drivers, but if your highschool or college student is getting good grades, ask about a good student discount. If your kid maintains a B average, you may save 8 to 25% with a good student discount.
This one is so simple. Go paperless, save some trees, and some money. It’s a small savings, but they add up!
Pay in Full Discount
Paying your car insurance premium six months at a time may save you up to 10%.
Teachers and the military are offered savings through some companies. Often times there are specific credit cards for teachers and other occupation specific discounts available – It never hurts to check!
If you’ve been a long-time customer, your car insurance company may reward that loyalty with a discount. A word to the wise though, these discounts may not be worth much. Some insurers use price optimization which basically means they overcharge long-term customers, because they figure they’re not going anywhere. Shocking, right? So, don’t get complacent if you want the best deal. Shop around. A loyalty discount may look great, but if you’re being overcharged to begin with, you’re not going to save with the discount.
What Car Insurance Companies Offer The Best Discounts?
Multi-policy discounts and safe driver discounts are offered by almost all insurance companies. Those two discounts bring the most savings. If you’ve been involved in an accident (whether it was your fault or not), know that it can affect your rate for 3 to 5 years. Once you’re considered accident-free again, start comparing quotes to see which one will save you the most.
But, what companies, in general, offer the best ways to save? You’ll find the biggest savings with the most well-known auto insurance companies. Here’s a quick, non-comprehensive list of some discounts at major car insurance companies:
American Family– anti-theft, safety discount, good student, multi-policy, paid in full, paperless, loyalty, multi-vehicle, safe driver, new customer (if you switch from a competitor)
Geico – anti-theft, safety discount, good student, military, multi-policy, paperless, multi-vehicle
Liberty Mutual – good student, paid in full, alternative energy, anti-theft, multi-car, paperless
Farmer’s – safety discount, multi-policy, paid in full, loyalty, multi-vehicle
Traveler’s – anti-theft, safety discount, UBI, good student, multi-policy, paperless, multi-vehicle
State Farm – anti-theft, safety discount, multi-policy, paid in full, loyalty, multi-vehicle, UBI
Progressive – anti-theft, safety discount, UBI, good student, multi-policy, paid in full, paperless, loyalty, multi-vehicle
All State – anti-theft, safety discount, UBI, multi-policy, paid in full, paperless, good student, safe driver
Nationwide – anti-theft, safety discount, good student, multi-policy, paid in full, paperless, loyalty
How Long Do You Have to Be With A Car Insurance Company to Get Discounts?
It depends on the discount, but never be afraid to ask how to cut car insurance costs. There are ways you can save right away such as with policy bundling. Other discounts are applied when you do something such as install an anti-theft device or an UBI. Last, discounts such as loyalty discounts are applied after you’ve been a customer for a while.
Final Tips to get the best discounts on car insurance
Understand how discounts work
Your basic rate is calculated before any discounts are applied. So, don’t just pay attention to the number of discounts. Find out the total premium you can expect to pay (basic rate minus any discounts). Your gender, age, car make and model, MVR, and location all affect your basic insurance rate.
Ask about discounts
Even if you aren’t due for renewal for a bit, call your current provider and see if there are any discounts you can get. Many discounts aren’t automatically applied. You have to ask for them. A lot of the info on available discounts can be found on the car insurance company’s website.
Call to confirm
Once you check the available discounts, talk to an agent to see if you qualify. Never switch car insurance policies on the assumption you qualify for discounts. Confirm your calculations and get a car insurance quote straight from an agent.
Depending on your area, discounts will vary by state and region. Also, different car insurance companies offer different discounts. This is where due diligence comes into play, so shop around and compare to get the best insurance coverages. If you’ve been with one auto insurance company for a while, definitely check and see if you can get a better deal elsewhere. The possible loyalty discount may not save you more money if you can get a lower car insurance rate elsewhere.
Need to find an easy tool to weigh discounts across various competitors? Check out some of the best car insurance comparison sites & how to use them.
Related blog posts
Need expert financial advice?
Let TurboFinance connect you with the best consulting services and resources to help you take control of your finances and find a path to build wealth.Get A Free Consultation Today!