The 12 Best Car Insurance Discounts That Will Save You Money

Who wants to pay full price for car insurance? With all the discounts insurers offer, you shouldn’t have to. This guide will help you get the insurance discounts you deserve, so you can lower your monthly premiums in 2023.

First, however, there are a few things to know about car insurance discounts:

• Actual savings vary. You’ll notice that insurers often say you can save “up to X%.” You may not be eligible for the full discount, however.
• Discounts may apply to just part of your car insurance (like liability) and not your entire bill. Saving 20% on comprehensive coverage sounds great, but the actual dollar savings may be small.
• Some discounts aren’t available in every state. Others are required in certain states. In California, for instance, you’re entitled to a 30% discount if you have a good driving record and at least three years of continuous insurance.
• Ask your insurer to check for hidden discounts. Not every auto insurance discount is advertised or publicly listed. You might be eligible for extra savings based on your profession, your vehicle make and model, your grades (if you’re a student), etc.

The Most Common Car Insurance Discounts

Below, we’ve listed the most common car insurance discounts that drivers can earn.

Multi-Car Discounts

Insure more than one vehicle on a policy, and you’ll save. It’s as simple as that! A multi-car discount is one of the best discounts you can get on your auto insurance. You can save 25% or more on your premium compared to insuring the cars separately.

Multi-Policy Discounts

Bundling your home and auto insurance is one of the most common discounts offered. Insurance companies love getting all your business, and they’ll reward you with a multi-policy discount of up to 25%. 

But this is key: When you’re shopping for insurance, ask if the bundling discount applies to your home insurance, your auto insurance, or both. You can bundle other policies with car insurance to get savings as well, such as life insurance or renters insurance.  

Policy Payment Discounts

One of the easiest ways to save is to pay your policy premium in full. Most auto insurance companies offer a discount for paying upfront, which may just mean waiving the monthly payment service fee. 

Of course, when you’re budgeting your expenses month to month, it can be hard to come up with the entire amount of your premium. Luckily, many companies also offer an automatic payment discount (or a lower monthly fee) when you set up automatic withdrawals from your bank account, as well as a paperless discount if you opt to get all your policy documents online. 

Vehicle Safety Discounts

If your car, truck, or SUV has certain safety features installed, you can earn a discount on your car insurance — though it’s typically a small one. Qualifying features vary by insurance company but usually include anti-lock brakes, airbags, running lights, and electronic stability control.

A lot of people ask, “Do you get a car insurance discount for having a dashcam?” The answer is no — not in the United States, at least. The same goes for advanced safety features like automatic braking, lane departure warning, collision prevention systems, etc. These features do reduce the chance of an accident, but they also increase the cost to repair your vehicle after a collision. So they won’t necessarily earn you a discount.

Anti-Theft Discounts

Did you know that car alarms don’t really work? Research has found that alarms are just not effective at preventing auto theft, although they’re very good at annoying neighbors. 

The good news is that they can save you a little money if you can get an anti-theft discount on your car insurance. Features such as a car alarm, a vehicle disabling feature, or a vehicle tracking system can save you 15% to 20% on your comprehensive coverage. Some states even require insurers to give you a discount for anti-theft features.

Passive Restraint Discounts

Unless you drive a classic car, chances are your vehicle has seat belts and front airbags. These are called “passive restraints,” and you can earn a small discount for having them. The discount typically applies only to your personal injury protection or medical payments coverage premium because passive restraints help prevent passenger injuries.

Good Driving Discounts

Being a safe driver can earn you a sizable discount on car insurance. But how do car insurers define a safe driver? One, they look at your driving record. If you haven’t had a ticket or an accident for three years or more, then you may be eligible for a good-driver discount ranging from 10% to as much as 40%.

Two, they may (with your consent) use a tracking device installed in your car or on your phone to monitor your driving habits. These tracking (or telematics) programs can earn you a discount of 30% or more on your insurance — but only if your driving meets very high standards. That means no night driving, no hard braking incidents, no fast acceleration, no speeding, etc. In practice, few drivers get the maximum discount available.

Accident-Free Discounts

If you haven’t had an at-fault accident for three years or more, then most insurance companies will give you a generous discount — up to 30%. If you have accident forgiveness on your policy, then you may be able to keep that discount even after an accident.

Defensive Driving Course Discounts

Taking a safe-driving class probably isn’t on your list of the top 10 fun things to do… but it could save you 10% or more on car insurance. Many auto insurers will give you an insurance discount when you take a course that’s approved by your state. 

The National Safety Council is a good source for reputable, approved courses that you can take online. Just make sure that your insurance company will accept the DDC Online Certificate of Completion issued by the NSC. 

Some insurers limit this defensive-driving discount to older drivers.

Usage-Based Discounts

The average American drives 13,500 miles every year. That’s a lot! If you drive less — usually under 7,500 miles per year — then you may be eligible for a pay-per-mile (or usage-based) car insurance discount. 

Typically, usage-based car insurance requires a tracking device or app to monitor your miles driven. You pay a low monthly base rate and then additional insurance costs based on the amount you drive each month. The savings can be sizable. 

Customer Loyalty Discounts

You can earn discounts for staying with a company for a long time. Some companies, like Progressive, give customers big discounts and perks — such as large accident forgiveness — after 5 years, 10 years, or more of being a customer.

However, it’s often true that you can save more by shopping around than by remaining loyal to your auto insurer. Many companies practice something called price optimization. This means they calculate your sensitivity to price changes, and then they nudge your premiums a little higher each year, hoping you won’t really notice. In cases like this, loyalty can cost you more than it saves.

New Customer Discounts

Insurance companies love new customers! They’ll often offer a modest discount, maybe 5-10%, for the first year you have a policy with them. Other companies offer a special discount specifically for switching from a competitor. If you purchase a policy several days before your old one expires, you may be eligible for an early-bird discount too.

Thinking of switching to a new insurance provider? Enter your ZIP code below and get free quotes (complete with all the best discounts) from dozens of companies in minutes!

What Company Offers the Most Car Insurance Discounts?

Insurers don’t always list every discount they offer, so it can be hard to figure out which company will offer you the most discounts. Some top contenders:

• American Family offers 18 car insurance discounts. This includes some other insurers don’t have, such as the Young Volunteer discount and the Generational discount.
• Liberty Mutual lists 17 distinct car insurance discounts, including a military discount, an early shopper discount, and a special discount for hybrid or electric vehicles.
• GEICO lists 16 discounts (although vehicle-safety savings, such as airbags and running lights, are listed separately).
• Travelers Insurance offers 16 discounts, including up to 23% for five years or more of safe driving and up to 15% for having continuous insurance.
• Progressive names 14 discounts, including 10% for owning a home (even if you don’t insure it with Progressive). It says that drivers save $145, on average, by using its Snapshot driver-tracking program.
• State Farm lists around 11 discounts (varying by state), including 40% on Medical Payments coverage if you have certain vehicle safety features.
• Allstate lists 11 as well, including a new-car discount and an early signing discount.

However, when it comes to car insurance discounts, quality beats quantity. You probably won’t qualify for every discount out there, and that’s OK! Look for the savings that best fit your life, whether you’re a college student, a veteran, an older person or a low-mileage driver. 

You may save more with a low-cost insurance carrier that offers cheap rates without special discounts.

How Much Can I Save with Discounts?

Have you ever found a great jacket on the 50% off clearance rack, then brought it to the register and gotten another 30% off? It’s a thrill. But don’t expect that to happen with your car insurance. 

You’ll never save 80% on your policy, no matter how good a driver you are. That’s because insurance companies place a cap on the total discount percentage you can receive.  

When you’re shopping for car insurance and comparing different policies, it’s smart to focus on the biggest possible discounts you’re eligible for. Usually, these will include the:

• Multi-policy discount (bundling home, auto, and other eligible policies)
• Multi-vehicle discount
• Usage-based discount
• Safe driving discount (as long as you’re OK with your insurance company monitoring your driving)

How to Get the Best Auto Insurance Discounts

You’re a price-savvy shopper, and you hate to pay extra for a simple car insurance policy. Here’s our best advice for saving big:

Look Up Your Insurer’s Discounts Online

Many insurers list their available discounts on their websites. Take a look! If you see some savings you’re eligible for, ask how to get them. One good example is affinity discounts given to members of various groups: college alumni, fraternities or sororities, professional organizations, etc.

Contact Your Insurance Agent

Not every insurance company uses agents. If you have one, however, talk to your agent about discounts. With their insider knowledge, their advice can be priceless — your agent may tell you how to get the biggest possible discounts on car insurance.

Check for Mandatory Discounts

Some states actually require insurance companies to give you certain discounts if you qualify. For instance, if you live in New York, you’re entitled to a discount on your liability, collision, and no-fault coverages of your auto insurance policy for three years if you complete an approved accident prevention course. 

New York drivers also get mandatory discounts for having anti-lock brakes, airbags, running lights, and certain anti-theft devices.

Lower Your Base Premium

Discounts can only do so much to help you save on auto insurance. A more direct way to cut costs is to lower your premium by shopping for low-cost auto insurers, opting for state minimum car insurance, and/or cutting insurance extras, such as towing and rental car coverage.  

Don’t under-insure yourself, though. “Keep in mind that the lowest price isn’t always the ‘cheapest’ option,” the Insurance Information Institute advises. “Make sure the company you choose is reputable and that you’re comfortable with the service you get from the insurance professionals you speak to.”

Raise Your Deductible

To instantly lower your insurance costs, you can choose a higher deductible for your collision/comprehensive coverage. The deductible is the amount you pay out of pocket toward your repairs before your insurance company covers the rest. Just make sure it’s an amount you can afford in case you need to file a claim.

Compare Car Insurance Rates Often

Car insurance rates are volatile, changing all the time. Your personalized rates change too, as you get older and build a good driving history. Don’t assume that your current auto insurance policy is a good deal — shop around online to find out how much you could save. Compare free, accurate, personalized quotes in minutes on Compare.com.

Frequently Asked Questions

How can I make sure I get the most discounts?

First, compare quotes to make sure you’re starting with the lowest base premium you can find. Once you’ve identified the company that offers the lowest insurance rates, do a little research. Search for a list of the discounts they offer, and then see if you’re eligible for any of them. You may have to call your insurance company and ask for certain discounts if they’re not automatically applied.

Who offers the cheapest car insurance?

We wish it were that simple! There isn’t one insurance company that offers cheap car insurance for every person. Each insurer calculates risk and sets rates differently, so your quote from one company could be hundreds of dollars less than a quote from another. A better question to ask is, “Who has the cheapest car insurance for me?” Run the numbers for yourself and compare them.

How much should I be paying for car insurance?

To get a baseline idea of how much drivers pay in your state, visit our Auto Insurance by State page. You’ll see the average monthly car insurance premium compared to the national average. You’ll also find info on how to save in your state, such as opting for cheap liability coverage.

Can you negotiate lower car insurance rates?

Unfortunately, no. You can’t haggle with an insurance company to get lower rates. You can, however, ask your agent or customer service representative if there are special discounts you’re eligible for.

How often should you shop for car insurance?

Ideally, you’d compare rates every six months, or whenever your current policy is about to expire. But life gets busy… so a more realistic goal is to shop for car insurance once a year. It only takes a few minutes to enter some basic info and then compare all the quotes you get from different companies. If you see quotes that are substantially lower than what you’re paying now, it’s time to switch!