What Are the Best Auto Insurance Discounts?
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Most auto insurance companies offer a vast range of discounts for their customers. When shopping for car insurance, you should ask each insurance provider for a full list of discounts they offer. Even if your initial premiums are high, you can use discounts to bring your monthly costs down significantly. Here are the top auto insurance discounts to look for when shopping for your car insurance.
One of the most common and most valuable discounts available is a bundling discount. Most car insurance companies also offer other types of insurance, like life insurance and home insurance. When you purchase several different types of insurance through the same company, they will usually give you a discount on all of them. This is one of the most accessible discounts to get, and it can save you a considerable amount of money. Not only will you be saving money on car insurance, but your premiums on all of your other insurance policies will be lower as well.
Good driver discount
Another discount that virtually every company offers is a good driver discount. It can be challenging to qualify for this discount, but if you do get it, you can save a tremendous amount of money on your policy. To qualify, you’ll typically need three to five years of a spotless driving record. If there are multiple drivers on your policy that are eligible for this discount, you’ll get an even more significant discount so that you can save a massive amount of money with it. When you practice safe driving habits, you will be much less likely to get into an accident, which is why insurance companies want to reward good drivers with lower premiums.
It’s also common for insurance companies to offer a multi-car discount for people who insure more than one vehicle on the same policy. Although your rate will still be higher overall when you insure two vehicles, the cost to insure each vehicle will be significantly lower. Because of this, it makes the most sense to insure all of your vehicles together instead of taking out a separate policy for each one.
Good student discount
Most insurance companies offer good student discounts to young drivers who get good grades. You’ll typically need at least a 3.0 GPA to qualify for this discount, although some insurance companies may charge more. If you’re a college student, you’ll need to be taking a minimum number of credit hours, usually at least 12, to qualify. Younger drivers are statistically riskier to insure so that car insurance companies will charge them higher rates. The good student discount is intended to offset some of these extra costs for responsible young people.
Tracking app discount
An increasing number of insurance companies are releasing apps that track their customers’ driving habits, and they offer discounts to the drivers that use them. While each tracking app is different, most options will track your speed, your braking habits, and any time spent on your phone while driving. After each ride, the app will calculate a driving safety score, and the higher your score is, the better your potential discount will be. You’ll usually get a small discount just for signing up for the program, and then that discount can increase if you drive safely. These apps encourage drivers to be safer, which can reduce accidents and insurance claims. They also give insurance companies valuable insight into their customers’ habits, which helps them to offer better products and services. Some notable programs like this include GEICO’s DriveEasy, USAA’s SafePilot, Allstate’s Drivewise, Farmers’ Signal, and Esurance’s DriveSense.
Defensive driving discount
In many states, you can earn a discount on your car insurance by taking a defensive driving course. These courses are typically just a few hours long, and in some cases, you may be able to take them online. Talk to your insurance company to see if they offer this discount. They will direct you to approved course providers so you can get signed up for a class. In some states, you may have to take one of these classes every few years to earn a discount.
Safety features discount
Car insurance companies offer discounts for having various safety features in your car. When signing up for car insurance, be sure to tell your agent about all the features your car offers – you might be surprised by what can qualify you for a discount. If you have high-quality airbags, anti-lock brakes, or anti-theft devices of any kind, this will typically qualify you for at least some sort of discount.
It may seem counterintuitive, but you can actually get a discount on your car insurance for owning a home. Even if you don’t have home insurance through the same company, car insurers will usually give you a discount on your insurance if you can prove you own a home. The logic for this is that homeowners are statistically considered to be more financially stable and, therefore, more likely to make their payments. If you can snag this discount as well as a bundling discount with your homeowner’s insurance, you can save a significant amount of money.
Full payment discount
Most people opt to pay their car insurance in monthly installments. However, if you can pay the total six-month or year-long premium in full, you can save a significant amount of money. Not only will you not be charged pesky billing fees, but you also can save up to 10 percent on your premium overall. If you’re on a budget, this may not be an option for you, but if you have the cash to spare and can make your payments upfront, it’s worth it. Not only will you save money, but you also won’t have to worry about paying that bill on time each month.
Low mileage discount
If you don’t drive often, your insurance company may offer you a low mileage discount. If you opt for this discount, you’ll receive a tracker to keep in your vehicle that will send your mileage count to your insurance provider. The less you drive, the more you can save on your insurance. Many companies are even offering mileage-based insurance programs, which will charge you a flat rate per mile instead of a monthly premium. These are great options for people who live in big cities with public transportation or those who work from home and only drive once or twice a week.
Auto insurers want to keep their customers coming back, so they’ll offer loyalty discounts to customers who have been with them for a certain period of time. This discount varies by provider, but typically you’ll qualify for it once you’ve been with a company for at least two or three years. If you’re a young driver, you might also be able to get a legacy discount by using the same car insurance company your parents use.
If you’ve served our country, many insurance companies want to reward you with a discount on your policy. These discounts can be significant – up to 25 percent in some cases – so it’s worth asking about, whether you’re an active service member, retired, or even a surviving family member. USAA is an insurance company that’s available only for members of the military and their families, and they’re known for their low prices and excellent customer service. Even if you’ve never served in the military, you may be able to qualify for a discount if one of your family members has.
Good credit discount
An increasing number of car insurance companies are offering discounts to customers who have good credit. Studies have shown that people who have good credit are more likely to pay their bills on time and are less likely to file insurance claims. If you have good credit, be sure to mention it when signing up for a new insurance policy to earn this discount. A history of on-time bill payments with previous insurers can also be beneficial. Keep in mind that this discount isn’t available in every state – some states legally prevent insurance companies from looking at your credit score.
Some insurance companies offer occupational discounts to people who work in certain professions. The most common of these are federal government employees, teachers, doctors, firefighters, and police officers, although there are other popular occupational discounts available as well. Insurance companies like to offer these discounts because they encourage loyalty among members of particular industries. Some professions also may be statistically less likely to file insurance claims.
Being a member of a certain club or organization can net you some great auto insurance savings. Costco, for example, claims it can save members $575 per year on their auto insurance premiums. AAA, AARP, and BJ’s Wholesale Club also offer discounts on auto insurance to its members. If you are a member of one of these organizations, check-in with them to see if they can help you save some money on your monthly auto insurance bill.
These are just a few of the many discounts that car insurance companies offer to their customers. These discounts can help you save a huge amount of money on your monthly premiums, and many of them don’t require you to do anything to qualify. When shopping for a new insurance policy, be sure to ask about the discounts they offer and which ones you may be eligible for.