Auto Insurance Discounts: The Best Ways to Save

Whether you’re looking for a new auto insurance provider or trying to save on a current policy, information is power. Here are the auto insurance discounts you can expect from major providers in the U.S.:

• Alumni, for being a graduate of an affiliated university or institution.
• Bundling, for buying a homeowner/renter and car insurance policy from the same provider.
• Continuous coverage, for having no lapses in coverage for a specified number of years.
• Defensive driving course, for taking a state-approved driver’s education program.
• Early quote, for getting and purchasing a quote before your current policy expires.
• Emergency deployment, for being a military member designated to high-risk areas.
• Federal employee, for working for the government.
• Good student, for maintaining good grades while enrolled in high school or college.
• Homeownership, for owning a home.
• Hybrid/electric vehicle, for insuring a hybrid, electric, or alternative fuel car.
• Low mileage, for driving less than 8,000 miles annually.
• Membership/employee, for being a member or employee of specific companies.
• Military, for being an active military member, veteran, or family member.
• Multi-vehicle, for having more than one car insured on a policy.
• Multi-policy, for pairing your coverage with another policy, like homeowners, life, or boat insurance.
• New car, for insuring a vehicle that is three years old or newer.
• Renewal, for renewing your policy with the same provider.
• Safe driver, for being accident-free for a certain number of years.
• Student away from home, for attending school at least 100 miles from where the covered vehicle is garaged.
• Switch-and-save, for switching from your current provider to a new one.
• Paperless/automatic billing, for opting for paperless statements or enrolling in automatic payments for your policy.
• Paid-in-full, for paying the entire amount of your policy upfront.
• Vehicle equipment, for having safety equipment installed in your vehicle, including anti-theft devices and airbags.
• Vehicle storage, for not using your car for an extended period.
• Welcome back, for buying a policy from a previous provider after switching to another.
• Young driver, for drivers under 25.

Not every auto insurance provider offers every type of discount. Check your provider’s website to see what discounts it offers, and follow up with an agent to make sure all potential savings are being applied.

Compare Quotes

Your car insurance rate depends on a number of factors, like your zip code, driving history, age, vehicle, and more. Each company weighs these factors differently, so the best way to find the cheapest rates is to compare quotes from at least three providers.

Sign Up for a Telematics Program

Many providers have telematics programs where you can get an additional discount for good driving habits. To participate, you download a designated app, or use a device in your car to track your driving behavior. Depending on your insurer, you can get up to 10 percent off for signing up, and up to 30 to 40 percent off at renewal depending on your driving.

Your provider will monitor your behavior for anywhere between 30 to 60 days, then apply your discount at the next policy period. Before you sign up, make sure to look at the fine print — some programs, like GEICO DriveEasy or Progressive Snapshot, can raise your rates if you display risky driving behavior.

Raise Your Deductible

Your deductible is the amount you pay before insurance kicks in to cover a collision or comprehensive claim. The higher your deductible, the lower your monthly premiums. If you have the savings, many experts recommend a deductible of at least $1,000. In part, that’s because you want to avoid filing claims under that amount anyway, due to the possibility of your rates increasing.

Bundle Home and Auto

Bundling your auto and homeowners/renters policy is a great way to save on monthly costs. Most insurance companies offer a bundling discount (also called a multiline discount). In some cases, you can save up to 25 percent.

Drop Collision and Comprehensive

Older cars probably don’t always need comprehensive coverage or collision coverage. As a rule of thumb, if your annual collision and comprehensive are more than 10 percent of the car’s value, consider dropping the coverages. For example, if your car is worth $2,000 and your annual collision and comprehensive premium are greater than $200, you might drop that coverage.

Buy Minimum Coverage

As a last resort, you can get the cheapest rates by purchasing your state’s minimum required coverage. Note that minimum coverage can leave you financially vulnerable in the event of an accident, and won’t cover repairs to your car in the event of an at-fault accident.

If you purchase liability-only coverage, it’s wise to raise your limits above the state minimum; if your chosen limits don’t cover the damages you cause, you could be vulnerable to a lawsuit. Many experts recommend 100/300/100 limits. Typically, raising your limits only increases your monthly payments by $10 to $15.

Among the major, nationally available providers, the following companies have some of the cheapest full coverage rates. You can learn more with our guide to cheap car insurance.

Note that Root is a usage-based insurance company, so you’ll pay the least if you’re a safe driver with low annual mileage. Regional providers like Erie ($137 monthly) also tend to have cheaper-than-average rates.