Almost all insurance companies offer car insurance discounts based on five factors: your driver profile, driving history, vehicle, payment methods, and insurance policy. Discounts can lead to significant savings on your insurance premium—especially if you can stack several together.
Car insurance discounts can help you save
Taking advantage of available discounts is one of the best ways for policyholders to pay less for car insurance. Some types of discounts are more significant than others, but stacking discounts can make quite a dent in your bill.
The insurance industry is very competitive, and every company wants to offer you the lowest rate they can—so most auto insurance discounts are applied automatically based on the information you share when requesting a quote.
But, if anything in your life changes, like if you retire or change jobs, make sure to reach out to your insurance agent to see if you are eligible for any new discounts.
Five types of car insurance discounts
Most car insurance companies break their discounts down into five major categories:
| Discount category | What it includes |
|---|---|
| Driver profile discounts | These discounts are based on things about you—your age, driving habits, and how many years you’ve been insured, for example. |
| Driving history discounts | You may be able to save by avoiding speeding tickets, serious moving violations, or at-fault accidents. |
| Vehicle discounts | If you own a newer vehicle or have an anti-theft device installed in your car, you might be able to save on your annual rate. |
| Payment discounts | How you pay for your insurance policy can reduce your premium—like if you pay in full or sign up for online billing. |
| Policy discounts | Insurers reward you for bundling multiple policies, so it’s often a good idea to combine your home insurance or life insurance with your car insurance. |
1. Driver profile discounts
Discounts in this category reward you for having reached certain milestones or for having certain affiliations. If you’re a student, senior, or a member of the military, for example, you may qualify for a discounted car insurance premium.
Here are some of the most common driver profile discounts to reduce your car insurance costs:
| Discount | Get it for… | Average savings |
|---|---|---|
| Affiliation discount | Being involved with a personal, professional, or school association | 3–12% |
| Continuously insured discount | Maintaining continuous insurance coverage without any lapses | 5–15% |
| Good student discount | Being a full-time student in high school or college and maintaining good grades (at least a B average) in your studies | Up to 25% |
| Homeowner discount | Owning your home—bonus if you insure it with the same company as your auto insurance | Around 15% |
| Military discount | Being an active or past member of the U.S. military | Up to 15% |
| Senior discount | Being over the age of 55 (or 60 in some states) and completing an approved driver education course | Up to 15% |
| Student away at school discount | Attending college at least 100 miles away from your family’s home without a car | Up to 25% |
2. Driving history discounts
Your driving history plays a big part in calculating your car insurance rate—but a good driving record can also score you discounts on your policy.
Here are some of the most common ones based on how you drive:
| Discount | Get it for… | Average savings |
|---|---|---|
| Accident-free or safe driver discount | Exhibiting safe driving behavior and maintaining a clean driving record with no accidents or claims for at least three years (also known as a good driver discount) | Up to 30% |
| Defensive driving discount | Completing an approved defensive driving course that is not court mandated—young drivers can take advantage of this discount | Up to 15% |
| Low-mileage discount | Driving less than 10,000 miles each year | Around 8% |
| Telematics discount | Signing up for your insurer’s telematic program—many usage-based insurance plans include an initial discount plus further discounts based on the way you drive | Up to 30% |
3. Vehicle discounts
Some vehicles are already cheaper to insure than others—but if your vehicle has certain safety and security features, your insurance company might discount your policy a little more. Unless you’ve added an aftermarket feature, these discounts are usually applied automatically.
Here are some of the most common vehicle discounts:
| Discount | Get it for… | Average savings |
|---|---|---|
| Anti-theft discount | Having a factory-installed or aftermarket anti-theft device in your vehicle | Up to 15–20% |
| Alternative energy discount | Owning an electric or hybrid vehicle (not available in all states) | Up to 5–10% |
| New car discount | Owning a car that’s less than three model years old | 10–15% |
| Safety equipment discount | Having equipment like daytime running lights, anti-lock brakes, seat belts, airbags, and advanced safety features in your vehicle. | Up to 40% (may only apply to the cost of medical payments (MedPay) and personal injury protection (PIP) coverage) |
4. Payment discounts
The way you pay for your policy can make a difference in your total premium—like signing up for online billing, paying in full upfront, and signing up for your policy in advance.
Here are some of the most common payment discounts:
| Discount | Get it for… | Average savings |
|---|---|---|
| Automatic payment discount | Setting up direct withdrawals from your checking account without using a card | 2–6% |
| Early sign-up discount | Signing up for a policy before your renewal date | 2–10% |
| Paid-in-full discount | Paying your premium in full instead of in monthly installments | 5–10% |
| Paperless discount | Signing up to receive your policy documents and bills online | Up to 10% |
| Responsible payer discount | Not missing a payment for a specific period of time | Up to 15% |
5. Policy discounts
Your policy choices can have a substantial impact on your premium—especially if you opt to bundle multiple insurance products with the same insurance company. Not all insurers offer policy-based discounts, so check with your provider.
Here are some of the most common auto policy discounts:
| Discount | Get it for… | Average savings |
|---|---|---|
| Bundling or multi-policy discount | Buying more than one type of policy with the same insurance company—like auto insurance, renters insurance, and home insurance | 10–25% |
| Customer loyalty discount | Staying with the same insurer for a certain length of time | 5–20% |
| Multi-car discount | Purchasing policies for more than one vehicle with the same insurance company | Up to 10% per car |
The best car insurance companies for discounts
Most car insurance companies offer a lot of discounts, but Farmers is currently the best auto insurance company for discounts, offering a total of 23 discounts to its policyholders.
Our experts at Jerry compiled a table of the number of discounts that are offered by major providers:
Asking your car insurance company about your eligibility for discounts is a great way to save money on your annual premium. But if you’re looking for cheap car insurance, you should do some comparison shopping.
The easiest way to compare quotes is to use the Jerry app. Jerry can find you the best discounts and coverage based on your driver profile. With the Jerry app, you can easily compare car insurance quotes from dozens of providers to find the cheapest car insurance. Simply download the Jerry app, enter your information, and start scrolling.
FAQ
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Hillary Kobayashi is an insurance writer and editor specializing in insurance and finance topics. Hillary’s mission is to use her knowledge and love of education to help car owners better understand how they can save time and money on car ownership. The articles Hillary has published for Jerry span topics from state-specific bill of sale requirements to SR-22 insurance information. Prior to joining Jerry, Hillary spent over ten years in education at Pacific University and the University of Oregon.
Expert insurance writer and editor Amy Bobinger specializes in car repair, car maintenance, and car insurance. Amy is passionate about creating content that helps consumers navigate challenges related to car ownership and achieve financial success in areas relating to cars. Amy has over 10 years of writing and editing experience. After several years as a freelance writer, Amy spent four years as an editing fellow at WikiHow, where she co-authored over 600 articles on topics including car maintenance and home ownership. Since joining Jerry’s editorial team in 2022, Amy has edited over 2,500 articles on car insurance, state driving laws, and car repair and maintenance.
