Your car insurance discounts guide for 2024

Key points

• Most insurers offer car insurance discounts to help lower your auto insurance rates.
• You might qualify for discounted car insurance based on your policy decisions, driver profile, vehicle and driving habits.
• Discounts for car insurance range in value, with some offering as little as a 1% break while others may save you up to 40%. 

The price of consumer goods and services has been on the rise, and car insurance is no exception. The index for motor vehicle insurance has increased by 15% since March 2022, according to the U.S. Bureau of Labor Statistics’ Consumer Price Index.

Most of the best car insurance companies offer at least a few discounts, and if you’re eligible for them, you may be able to secure a more palatable rate. 

Whether you’re shopping for a new car insurance company or reviewing your current policy, here are some of the most common car insurance discounts to be on the lookout for. 

Explore the best car insurance discounts

Type of car insurance discounts available

Every insurer in our cheapest car insurance companies analysis offers multiple ways for qualified drivers to reduce their rates. 

What type of auto insurance discounts are you eligible for? Each insurer has its own unique set of insurance discounts and eligibility requirements, but most discounts fall into one of these five categories: 

• Policy-based discounts
• Payment discounts
• Driver profile discounts
• Driving behavior discounts
• Vehicle-based discounts

Policy-based car insurance discounts

The most common policy-based discounts include:

• Bundling discount. Also known as a multi-policy or multi-line discount, a bundling discount is available to drivers who purchase car insurance as well as an additional type of coverage from the same company. 
  
  Bundling home and auto insurance can save you an average of 14%, according to our analysis of rates. You can also bundle car insurance with other types of coverage, such as renters insurance, motorcycle insurance or RV insurance. 

• Multi-vehicle discount. Insure multiple vehicles and you can usually get a car insurance discount. Most insurers require applicants to be family members that live in the same household  — spouse, parent, child, etc. — but some extend this discount to unmarried couples or partners. Savings typically range from 8% to 25%.

• Loyalty discount. Recognizing that many customers shop around for the best insurance prices every couple of years, some insurers provide discounts if you stay with them for a set amount of time. While these can sometimes offer good value, you should still shop around periodically to ensure you’re getting the best rate.

Payment car insurance discounts 

How you pay your bill — and how often — can also help you score some savings. These discounts reward you for certain payment practices. 

• Pay in full discount. Many people choose to pay their car insurance premium monthly, but opting to pay in full for six or 12 months can earn you a discount — between 6% and 14% on average — with some insurers. You may also be able to save on monthly processing fees.

• AutoPay discount. Opting to have your car insurance payment automatically deducted from your bank account can qualify you for an AutoPay discount with some insurance companies. As a bonus, it also negates the risk of your policy being canceled because you forgot to pay your bill.

• Paperless discount. If you opt to have your billing statements and policy documents straight to your inbox rather than through the mail, you may qualify for a discount. Switching to paperless also makes it easier to keep up with your proof of insurance and access the terms of your policy. Discounts vary across insurers, but we found an average discount is about 3%.

Driver profile discounted car insurance

Driver profile discounts take into account who you are as a policyholder. Factors used can include your age, academic status, military affiliation or organizational affiliation. 

• Military discount for car insurance. Many insurers reward members of our armed forces with discounts specifically for active duty, reserve and retired military members. If you or someone on your policy is a military member, ask your insurer if it offers a discount. If not, shop around and see if other insurers offer discounts on car insurance or more competitive rates based on your military affiliation. 

• Car insurance student discount. This discount acknowledges students aged 16 to 25 who maintain good grades in high school and/or college. To qualify, most insurers require students to maintain a “B” grade average or higher. Discounts for car insurance vary but typically fall between 8% and 25%. Many insurers offer this discount, including Nationwide, Travelers and Geico, among others.

• Car insurance discounts for seniors. Some insurers offer discounts on car insurance for drivers who are 55 or older.  Senior drivers often see higher rates as they enter their 70s, so if you or someone on your policy is in that age group, ask about available discounted car insurance.

• Affiliation or organizational discounts. Some insurers extend discounts to policyholders that are affiliated with a specific organization, such as an employer,  professional association or even your alma mater. For instance, Geico partners with alumni associations, college conferences and student organizations to provide insurance discounts to members.

Driving behavior car insurance discount

Insurers base a lot of decisions on your habits behind the wheel, and if you’re a good driver or practice other safety habits, that may translate to a discounted car insurance.

• Good driver car insurance discount. Many insurance companies reward policyholders who go a specific amount of time without an accident or moving violation on their record. If that sounds like you or someone in your household, it’s a good idea to see if you qualify. The terms of the discount will vary from insurer to insurer. 

• Accident-free discounted car insurance. To your insurance company, going accident-free for a set period of time means you’re a lower risk when it comes to claim payouts. That driving history can earn you a lower rate, though the exact discount and accident-free period requirements vary by insurer. 

• Usage-based insurance discount. Usage-based insurance (UBI) programs allow insurers to monitor your driving habits, including speed, braking and distance driven and base your rate on the information collected. Data is usually collected through a mobile app or other system. Satisfactory driving habits can typically score you a discount between 5% and 40%. For example, if you enroll in State Farm’s Drive Safe & Save program, you can save up to 30%.

• Driving course car insurance discounts. Driving courses can help you improve your habits behind the wheel, and many insurers entice you to complete them by offering a discount. There are numerous driving course discounts available for different types of drivers. Some insurers offer them to drivers of any age, while others may extend the discount to teens or senior drivers who complete specific courses. 

Vehicle-based car insurance discounts

It’s not just how you perform behind the wheel that can earn you lower car insurance rates. You may also be able to snag a discount when your vehicle meets certain criteria or has certain features. 

• New car discount. If you’re driving a car that is less than three years old, you may be able to save with a new car discount. Several insurers, including Travelers, offer this discount. Typical car insurance discounts range from 10% to 15% but, like eligibility requirements, will vary by insurer. 

• Anti-theft car insurance discount. Vehicle thefts have been on the rise since 2019, according to a recent report by the National Insurance Crime Bureau, and that can be a costly trend for insurers. Many insurers offer discounts for insuring a vehicle with anti-theft devices, such as GPS tracking, vehicle recovery systems and audible alarms. Discounts range from 5% to 25% on average for comprehensive coverage.

• Safety features discounted car insurance. Safety features in cars have improved dramatically over the last two decades and now include plenty of technology that makes it safer to be on the road. Features like airbags, anti-lock brakes, automatic seatbelts, and daytime running headlights may help you save. 

7 ways to lower the cost of car insurance

Discounts on car insurance aren’t the only way to lower your premium.  Here are more ways to cut your car insurance costs. 

1. Shop around

Shop around and compare car insurance quotes to ensure you find the cheapest rate and best coverage for your needs. That’s true whether it’s your first time shopping for insurance or if you’re already insured and considering making a switch. 

2. Increase your deductible

Your deductible is how much your insurer will deduct from a claims check for a covered incident. A jump from a $500 to $1,000 or $1,500 deductible brings down your rate, but make sure you’re comfortable covering more for repairs yourself if you make a claim. 

3. Decrease your limits 

Insurance limits refer to how much your insurer will cover for a claim. Reducing them decreases the financial responsibility of your insurers and thus results in lower rates. However, do so with caution. Reducing your limits can put you in financial jeopardy if you cause an accident and the cost of damages for bodily injury exceeds your limit, you can be on the hook for the difference. Most states also require a minimum amount of coverage limits by law.

4. Drop unnecessary coverage 

Maybe your vehicle is older now and the cost of collision and comprehensive insurance is no longer justified. Or maybe you recently paid off your car loan but forgot to cancel your gap insurance policy. Either way, taking inventory of your existing policy and current needs can help you determine if you can cut some types of coverage. Of course, always make sure the coverages you plan to cut aren’t necessary to meet state or lender obligations — or to maintain your financial security. 

5. Consider insurance costs when buying a vehicle

Some vehicles are more expensive to insure than others, so factor this in when purchasing. Before you hit the car lot, get online quotes for an insurance policy on the vehicle(s) make and model you’re considering. 

6. Switch to pay-per-mile insurance

If you typically walk, cycle or rely on public transportation to get where you’re going — or you simply aren’t behind the wheel often — consider pay-per-mile coverage. This type of coverage bases your rate on miles driven, meaning you can save if your car is parked more often than not. 

7. Improve your credit

Some insurers include a credit check when developing a policy premium as a method of risk assessment. Drivers with higher credit scores may qualify for discounted car insurance rates, as insurers see them as less of a danger. Paying your bills on time, reducing debt and lowering your credit utilization rate can all help improve your score.

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