How to Get a New Car Discount for Insurance
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Have you recently purchased a new vehicle? If so, you’ll be pleased to know that you may be eligible for additional car insurance discounts. For example, according to GEICO, drivers with new vehicles can enjoy potential savings of up to 15% on car insurance.
This guide will answer all of your questions about new car discounts. So keep reading to learn more about what new car discounts are, how to qualify for a new car discount, and the five car insurance companies that offer them to policyholders.
If you’re considering switching to a new auto insurance company with a more generous new car discount, enter your ZIP code below to compare all of your options:
Check If a New Car Discount is Out There
Check If a New Car Discount is Out There
What is a New Car Discount?
A new car discount is awarded to policyholders who drive a car no more than three years old. This discount is applied to your collision and comprehensive insurance coverage.
However, different insurers have different definitions of what constitutes a new vehicle. For example, Nationwide’s new car discount applies to vehicles two years old or newer versus Progressive, which extends the discount to cars three years old or newer. Actual savings vary between insurers but generally fall between 5% to 20% of the total auto policy premium.
Insurers that offer new car discounts include State Farm, Liberty Mutual, GEICO, Nationwide, and Progressive.
Eligibility requirements also vary from insurer to insurer. For example, an insurer may limit new car discounts to specific vehicle models (e.g., sedans over SUVs) or car insurance coverage selections. Additionally, drivers’ accounts need to be in good standing (no claims, moving violations, or at-fault accidents for a specified period, as determined by the insurer) to benefit from these types of coverage.
What Are the Advantages of New Car Discounts?
Here are two main benefits of new car discounts:
- Cost savings: New car discounts can save policyholders up to 20% off their collision and comprehensive coverage premiums. Since new vehicles are valued higher with a higher cost of parts and labor, any car insurance discount can help offset a higher insurance premium.
- Additional coverage options: Outside of liability coverage and collision coverage, policyholders may take advantage of other coverage options not applicable for older vehicles, such as guaranteed asset protection (gap) insurance. Gap insurance covers the difference between the total amount owed on the car loan versus your vehicle’s actual cash value if your car is declared a total loss after a car accident.
How Do I Qualify for a New Car Discount?
Qualifying for a new car discount on your auto insurance policy generally depends on one or both of the following:
- Age of vehicle and owner of the vehicle: An insurance carrier offering new car discounts generally requires that your vehicle be two or three years of age or newer. Additionally, the vehicle must be listed in your name and added to your insurance policy.
- Type of vehicle: New car discounts may be restricted to certain states, certain vehicle makes and models, and your selected coverage options.
Remember, the qualification criteria for new car discounts varies from insurer to insurer. Every insurer has different underwriting policies. We recommend you call your insurance company to learn the requirements and eligibility criteria for new car discounts.
Which Insurers Offer New Car Discounts?
Here are five highly reputable and well-known auto insurance companies that offer new car discounts:
Policy details: GEICO’s new vehicle discount applies to vehicles three years old or newer. Discounts vary depending on the make and model of the vehicle, your selected coverage options, and if you have a clean driving record.
Savings: Up to 15%
What sets them apart: GEICO has been in business for 85 years. The company offers 24/7 support online or via its smartphone app.
Policy details: Nationwide’s new car discount applies to vehicles two years old or newer. Discounts vary depending on the make and model of the car. The savings are applied to a policyholder’s collision and comprehensive coverage. The exact amount of the discount varies based on the make and model of the vehicle, selected insurance products/coverage options, and the policyholder’s driving record.
Savings: Approximately 10%
What sets them apart: New car discounts can be applied to sedans, pickup trucks, and motorcycles. Nationwide also offers gap insurance and a vanishing deductible program, which allows you to drop your deductible by $100 every year (up to $500) for each year you maintain a clean driving record — meaning no claims, moving violations, or at-fault accidents.
Policy details: Progressive’s new car discount is available for vehicles three years old or newer. Like GEICO and Nationwide, your exact savings would depend on the make and model of your car, your selected coverage options, and your driving record.
Savings: Approximately 5%
What sets them apart: As the largest auto insurer in the United States with an accident forgiveness program, it forgives policyholders for any accidents with claims valued at $500 or less.
Policy details: Not disclosed
Savings: Up to 12%
What sets them apart: Liberty Mutual is the sixth largest property and casualty insurer in the United States. Drivers in select states may also receive a discount of up to 30% on their premium by enrolling in Liberty Mutual’s RightTrack telematics program, which asks that drivers download the Liberty Mutual app and use their phone’s GPS location and sensors to monitor their driving behaviors, including how many miles driven, what time of day they drive, etc. Other available discounts include a multi-car discount and a loyalty discount.
Policy details: Allstate awards new car discounts to policyholders with vehicles belonging to the current model year or one year prior. Additional savings can be had by adding safety features, such as anti-lock brakes and anti-theft devices.
Savings: Not disclosed
What sets them apart: Allstate is the fourth largest auto insurance company in the United States. They also award an automatic 10% discount for enrolling in their “DriveWise” program, available to drivers who download the Allstate app to monitor driving behavior, plus an additional 6% just for staying enrolled. Other types of insurance Allstate offers include rideshare insurance for Uber and Lyft drivers.
What Other Auto Insurance Discounts Can I Get?
Outside of new vehicle discounts, three other types of discounts are a safe driver/accident-free discount, a multi-policy (bundling) discount, and a telematics discount.
Also referred to as a good driving discount, safe driver discounts are awarded to drivers who have maintained a clean driving record for the past three to five years with no claims, moving violations, or at-fault accidents.
Policyholders who purchase two or more policies from the same insurer (e.g., auto and homeowners insurance) may qualify for a multi-policy discount. For example, Nationwide policyholders can save up to 20% when bundling their auto and homeowners insurance.
Telematics discounts are also available for drivers who agree to allow auto insurance companies to monitor their driving behaviors using an in-vehicle telematics device, such as a windshield-mounted Bluetooth beacon or GPS-enabled smartphone app. Depending on the insurance company, policyholders who allow this monitoring can save up to 30% off of their collision and comprehensive car insurance premiums.
With your auto insurance coverage, don’t forget to consider other safety-related and policy-related discounts. Adding airbags, enrolling in a defensive driving course, and installing anti-theft devices/anti-lock brakes or similar safety features could all earn you a pretty penny. You may even save money by enrolling in paperless billing and automatic payments. Remember, you don’t need a perfect driving history to take advantage of policy-related discounts.
Lastly, you may save more by excluding miscellaneous coverage on your new or existing policy, such as rental car reimbursement, roadside assistance, new car replacement, underinsured/uninsured motorist coverage (if your state laws don’t require it), and similar coverage options. However, we wholeheartedly recommend that you apply for full coverage with comprehensive insurance and collision insurance for additional first-party benefits, as well as higher liability limits to reduce the chances of you having to pay out of pocket in an at-fault accident.
If you’re interested in exploring the available discounts that may be available to you, call your local insurance agent to see if you qualify for lower car insurance rates.
Get Rewarded for Your New Car Purchase
Now that you know everything there is to know about new car discounts, take advantage of potential savings and shop around for cheap car insurance quotes from multiple affordable auto insurance providers like GEICO, Liberty Mutual, Allstate, and Nationwide. An auto insurance quote is only two minutes away.
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