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From home insurance to life insurance and everything in between, insurance companies aren’t exactly known for being friendly, outgoing, or easy to deal with, despite persistent marketing campaigns designed to convince consumers otherwise. That said, insurance is a frustrating but necessary factor in car ownership, and even if you choose the company with the perkiest mascot, you’re likely to run into some common issues and questions about the process. 

To help you find the best car insurance policy for you and the other drivers in your household, we’ll look at some of the most common car insurance discounts offered across the industry. The savings can vary from a little to a lot, but one of the keys to saving as much as possible on car insurance is claiming as many discounts as you can. Common discounts include policy bundling rebates, good driver and driver education rate cuts, and price breaks for students, teachers, members of the military, and veterans. Keep in mind that not every insurance company offers all of these discounts, and since insurance regulations vary by state, where you live also plays a role in how much you’ll pay for insurance. To learn more about car insurance, be sure to check out our guide on how car insurance works and our guide to how much car insurance you need to help you shop for the right policy for you.

Types of Car Insurance Discounts

Here, we’ll take a quick look at the most common types of discounts offered by auto insurance companies. Chances are, you’ve already had one or more of these discounts applied to your current insurance policy, but it’s always worth taking a few minutes to check. If you see discounts listed here that sound as if they might apply to you, check with your current insurance company to see if they are offered and if you are eligible. If you’re currently shopping around for a new car insurance company and policy, make sure to ask if these discounts are offered and if you meet the eligibility requirements. If it’ll help save you money, don’t be shy about asking.

Loyalty Discounts

Insurance companies aggressively recruit new customers with extensive advertising campaigns, innovative discount offerings, and the promise of being better than the next guy. If you’re generally satisfied with your insurance company but feel you deserve a little more attention for staying put, the loyalty discount was created to appease customers just like you.

To get a loyalty discount, ask your insurance company whether a discount is offered, how long you’ll need to be a customer to be eligible, and any other terms that might apply. Insurance companies apply the discount after a predetermined period of time, and some companies will increase the discount the longer you remain a customer. However, availability of this discount depends on your insurance company, and it may also vary by the state you live in. For example, the states of Maryland and Ohio prohibit insurance companies from evaluating customers based on loyalty, so these discounts are not available in those states.

As finance expert Dave Ramsey cautions, even if your insurance company offers you a loyalty discount, it might not be enough to offset what you could save by shopping around. In other words, if your insurance company assumes you’re comfortable sticking with them, they might not be offering you incentives that are competitive with rival insurance companies eager for your business. So if you’re happy with your insurance company and confident you’re getting the best deal, a loyalty discount is a nice bonus, but don’t let a loyalty discount alone convince you to stay with your insurance company.

Good Student Discounts

High school and college students are often eligible for discounts. Some companies offer discounts to all students (usually with the caveat that they are enrolled in school full-time rather than part-time) though generally, insurance companies make this discount contingent on academic achievement (the theory being that a good student is likely to be a more responsible driver than a mediocre or poor student). This is similar to the way insurance companies use homeownership or credit score as a way of assessing an adult’s risk as an insurance company.

Graduate in car with diploma
(Sarah Fix Photography Inc / Getty Images)

Keep in mind that insurance companies aren’t obligated to offer student discounts, and that there is no industry standard for such discounts, so companies can set their own criteria as they see fit. For example, Nationwide’s good student discount requires the student to maintain a B average, while Allstate simply says “good grades” with no specific metric. Most good student discounts are available to full-time students aged 25 or younger, and will require the policyholder (usually the parent) to provide periodic proof that the student meets the grade criteria by submitting a report card or transcript. Generally, insurance companies don’t specify the amount or percentage of the discount up front (often using language that the discount could be “up to” a certain percentage, which implies that it’s often less), and you’ll lose the discount if the student's grades slip, enrollment status changes, or reaches the upper age limit of the discount.

If you’re a parent with a student on your car insurance plan, or a student with your own insurance policy, it’s worth a phone call to your current insurer to see if such discounts are available. If you’re shopping around for a new company, it’s definitely worth asking about. If your student goes away to school and leaves his or her vehicle at home (and it’s not driven by anyone else in the household), your insurance company may also be willing to reduce the rate on that vehicle for the part of the year the student is away. 

Learn more about the cheapest car insurance for teens, students, and new drivers »

Bundling or Multipolicy Discounts

Most insurance companies offer discounts if you buy two or more policies together. Examples of other insurance policies you can often bundle with an auto insurance policy include homeowner’s or renter’s insurance and recreational vehicle insurance (such as boat or RV insurance). You may also be eligible for bundling discounts by insuring multiple vehicles together (some insurance companies may call this a multivehicle discount instead, but it’s the same idea). The more types of insurance you can bundle together, the more money you are likely to save.

There are some exclusions to bundling discounts, so it’s always worth a conversation with your current insurance company, or any new insurance companies you may be considering. Due to the way life insurance is regulated, this insurance product is usually excluded from bundling discounts, but if you have life and auto policies with the same company, it doesn’t hurt to ask. Furthermore, the state of California does not allow insurance companies to evaluate insurance customers using homeownership as a merit, and therefore, residents of California cannot get a specific “homeowners insurance discount” on auto insurance, but bundling discounts are still mentioned by many insurers. As always, your eligibility may vary based on location and company.

GuidoMieth / Getty Images

According to a 2017 survey published by InsuranceQuotes, there are other scenarios in which bundling might not save you as much as you might expect. Customers who don’t fit an insurance company’s ideal customer profile get fewer deals, particularly when considering factors like a below-average credit score or poor driving record. It’s also possible that you may be disappointed by the bundling discount you’re offered not because of the auto insurance cost, but because your insurance company is reluctant to discount your other insurance policies (such as a homeowner’s policy in an area with a high risk of natural disasters). Furthermore, you’re more likely to be offered a bundling discount from larger insurance companies rather than smaller ones, but that doesn’t necessarily mean you’re better off with a larger company overall. Finally, since bundling discounts depend on your particular situation, it’s unlikely you’ll be offered one (or understand the specific discount you’re getting) by shopping for quotes online. Seeking out this discount will probably require some phone calls. According to the InsuranceQuotes survey, the nationwide average savings for a bundling discount is about 16%.

Good Driving Discounts 

There are two main types of good driving discounts: those offered to drivers who maintain a clean driving record free of crashes and moving violations, and those offered to drivers who opt-in to tracking programs.

First, let’s look at whether you can save simply by being a good driver. Though some companies do offer small discounts (think 5% or so) if you maintain a clean record for a certain period of time, this isn’t as common as you might expect. It’s true that a clean driving record rewards you with lower premiums, but it might make more sense to realize this is simply how insurance works, rather than expect discounts for it. If you cost your insurance company money in the form of payouts, you’re going to see higher rates sooner or later. Keep it simple, and you’re less likely to see higher rates. So, while maintaining a clean record is one of the key factors in achieving cheap car insurance rates, it’s unlikely you’ll be offered a substantial discount for doing so. The goal is to keep your rates from going up in the first place, rather than expecting them to come down later.

Jung Getty / Getty Images

Over the last few years, some major insurance companies have started offering a way to demonstrate that you’re a safe driver. These discounts first started appearing around 1998 but have become much more common recently. If you’re a customer with Progressive, State Farm, Allstate, American Family Insurance, and some others, you may be able to save money by letting your insurance company track your driving habits using a device installed in your car or a smartphone app. The programs track and report data like how often you drive, how fast you tend to drive, and risk factors such as how quickly you accelerate and how often you perform fast braking maneuvers. 

These programs have pros and cons. If your insurance company likes what they see, you’ll save money, and you might drive more safely as a result. That’s really the main and only upside. There are several drawbacks to consider. First, you’re giving your insurance company access to a lot of data, such as where you go, how often, and how much time you spend in certain locations. This is well above and beyond the information insurance companies say they need to assess your driving habits. It’s up to you to decide if that tradeoff is worth it to you right now, and if it’s worth it over time as these programs have potential to become more common and possibly even expected by insurance companies and consumers alike. Then, it’s worth noting that these programs don’t guarantee a discount. If the insurance company doesn’t like your data, they can refuse a discount and possibly even raise your rates. If you do get a discount, it’s at the company’s discretion. Each company that offers a tracking discount has its own terms, so think carefully about whether the maximum discount possible is worth it to you, and consider that you might not even save that much. 

Learn more about opt-in tracking programs » 

Defensive Driving Discounts

If you like the idea of becoming a better, safer driver, see if your insurance company offers defensive driving or driver training discounts. These discounts provide savings after you successfully complete an approved driver training course. They are fairly common with major insurance companies, though companies set their own criteria for qualifications. If you’re interested in such a discount, check with your insurance company to find out exactly what’s expected. Some companies, such as Geico, will allow you to complete an approved online course, though most only accept hands-on training from certain in-person schools and courses. In some cases, the discount is only offered to new drivers, and in other cases, it’s only available for older drivers. It’s well worth a phone call to ask, especially if it’s something you’re interested in doing anyway. 

Driving test with cones
(Don Mason / Getty Images)

It’s unlikely you’ll save a substantial amount with a driver training course, especially since in most cases you’ll have to pay for the course itself. Still, you’ll probably find it’s worth the investment in time and effort to become a better, safer driver.

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Employer/Affinity Group Discounts

An employer or affinity group discount can save you money on car insurance, though if you don’t already qualify for such a discount, it’s not worth the effort to go find one. If you work for a company that has negotiated a bulk rate with a certain insurance company, you will qualify for an employer discount, although you’re sacrificing your ability to shop around for better rates or to find the company that’s best for you. Examples of affinity groups include clubs such as AAA or AARP, some credit unions, and some other groups, like alumni associations. These groups sometimes negotiate bulk discounts similar to employer discounts. To see if you qualify, contact your employer’s benefits department or group membership department, or your insurance company. 

Drawbacks to these discounts may make them not worth your while. A typical affinity group discount can be anywhere from 5% to 20%, though your actual savings depends on the terms your group has negotiated with the insurance company. Discounts of 10% are common with membership in groups like AAA and AARP. You can usually combine affinity group discounts with other available discounts. While some affinity group discounts might just mean you’ll get a flat percentage off, others mean you’re giving up a certain amount of control. In addition to the fact that you often won’t be able to choose from different insurance companies, you may be accepting a group rate on a predetermined policy or amount of coverage without being able to customize a policy to your needs. 

Teacher Discounts

Many major auto insurance companies offer special discounts, rates, or perks especially for teachers and educators, including Geico and Farmers. Some of these perks include a waived deductible for vehicle damage incurred on school property and special compensation for work-related belongings stolen from a teacher’s car. If you’re a teacher, check with your insurance company to see if you are eligible for any such discounts or benefits.

Military and Veteran Discounts 

Most major auto insurance companies offer special rates or discounts to active military personnel, veterans, and their families. Companies that offer military-specific discounts or rates include State Farm, Progressive, Nationwide, Geico, Farmers, and USAA. Other perks and privileges are common as well. USAA, for example, was founded specifically as an insurance and financial services company for military benefits, and as such, perks include discounts on vehicles parked on a military base and discounts on vehicles stored during active deployment. In general, insurance companies that offer military rates or discounts will be flexible in the case of a sudden deployment or other special situation. 

Read more about car insurance for military and veterans » 

Safety Equipment Discounts

Unfortunately, safety equipment discounts aren’t as common as many consumers expect them to be. Most new vehicles are equipped with technology that reduces or minimizes the risk and impact of a crash, which, in theory, reduces how much an insurance company will pay out for injuries. However, it’s rare for an insurance company to offer specific discounts for vehicles with such features. Insurance companies say that, in general, customers with such vehicles already pay lower rates for vehicles with safety features such as anti-lock brakes, and furthermore, it’s more expensive to repair for vehicles with the cameras and complicated sensor networks that enable advanced safety systems. As of a 2016 study, only The Hartford and Liberty Mutual offered specific discounts for certain collision avoidance technology, such as automatic emergency braking, but in the case of The Hartford, the discount was only available in certain states.

Teacher instructing class
(Tom Werner / Getty Images)

The situation for theft reduction technology is similar. You may see lower rates thanks to alarm and tracking systems, but are unlikely to see savings in the form of a specific discount. 

Low Mileage Discounts

The low mileage discount is another situation that might seem obvious to consumers, but insurance companies don’t agree. In fact, our ranking of the cheapest auto insurance companies in 2020 revealed that, all other factors being equal, consumers who drive an average of 12,000 miles per year pay similar rates to consumers who drive an average of 6,000 miles per year or less. However, a number of companies say they do offer discounts to drivers who rack up less than 15,000 miles per year. 

If you drive very little, you do have some options to save money, but they likely won’t come in the form of a significant discount from your current insurance company. Some do offer discounts for low mileage as part of the tracking programs we discussed earlier, but that requires opting in to such a program, and considers rates based on time spent behind the wheel rather than actual mileage.

There are also pay-per-mile insurance options, such as Metromile, and collector car insurance policies offered through specialty insurance companies for vintage or high-value vehicles that are stored most of the year and driven only occasionally. 

Car Insurance Discounts by Company

Next, we’ll take a look at the nation's largest auto insurance companies, as determined by our ranking of the best auto insurance companies in 2020.


Of the discount types previously discussed, USAA offers the following: good student, multivehicle, good driver, driver training, new driver training, military, and low mileage.


Geico offers the following discounts of those previously discussed: good student, bundling, multivehicle, safe driving/claims-free for three years without making a claim, defensive driver training, new driver training, affinity, teacher, military, discounts for certain safety equipment (specifically anti-lock brakes, daytime running lights, and passive restraints), and low mileage.


Allstate offers the following discounts: good student discount, students attending school more than 100 miles from home, bundling, good driver, new driver training, and discounts for certain safety equipment (specifically anti-lock brakes).

State Farm

Of the discount types previously discussed, State Farm offers the following: good student discount, students attending school away from home, bundling, multivehicle, good driver with no moving violations in three years, safe driving/claims-free discounts for customers who go three years without a chargeable accident, defensive driver training, new driver training, and discounts for certain safety equipment (specifically passive restraints).


Of the discount types discussed on the previous slides, Farmers Insurance offers the following discounts: loyalty, good student discount, students attending school more than 100 miles from home, bundling, multivehicle, good driver with no moving violations in three years, safe driving/claims-free discounts for customers who go three years without making a claim, defensive driver training, new driver training, older driver training, affinity, teacher, military, discounts for certain safety equipment (specifically anti-lock brakes, daytime running lights, and passive restraints), and low mileage.


Progressive offers the following discounts: loyalty, good student, students attending school more than 100 miles from home, bundling, multivehicle, good driver with no moving violations in three years, and defensive driver training.

American Family

American Family offers the following discounts: loyalty, good student, students attending school more than 100 miles from home, bundling, multivehicle, good driver (clean record and tracking program), new driver training, and older driver training.


Of the aforementioned discounts, Nationwide offers the following: loyalty, good student, bundling, good driver (good record and tracking program), defensive driver, safety equipment, affinity, and low mileage.


Of the discounts discussed above, Travelers offers the following: good student, students attending school more than 100 miles from home, bundling, multivehicle, safe driving (claims- and violation-free and tracking program), new driver training, and affinity.

How to Get the Best Car Insurance Discounts

Below, you’ll find more ways to save as much as possible on your auto insurance policy.

Shop Around When It’s Time to Renew

The Insurance Information Institute recommends getting quotes from at least three insurance companies whenever it’s time to shop around. Insurance rates vary widely from driver to driver and state to state, so you might be surprised to find out which company is the cheapest for you.

Learn how to get car insurance quotes online » 

Call an Agent for Personalized Coverage

Independent insurance agents can help you shop around and find the lowest rates for you. And, by picking up the phone, you can talk to someone who can help you find discounts or specialized coverage that you might not be able to find online.

Raise Your Deductible or Lower Your Coverage

When you raise your deductible or lower your coverage, you get lower premiums, but you’re taking a risk that you’ll have to pay more if you are in a crash or your car is damaged some other way. This strategy can be especially beneficial as your car loses value and won’t cost as much to repair or it isn’t as important to repair minor damage. 

Find out how much car insurance you need » 

Maintain Good Credit

Good credit is a sign of trustworthiness, and most insurance companies offer the best rates to customers with a history of paying their bills on time.

Check Insurance Rates Before Buying a New Car

It’s no secret that it costs more to insure some cars than others, but did you know that you can check to see how a new car will affect your premiums before you actually buy it? Cars with high theft rates or powerful engines are two examples of a way a new vehicle can quickly make your premiums more expensive.

The Best Car Insurance Companies in 2020

Our Car Insurance Ranking

  1.     USAA
  2.     Geico
  3.     Allstate
  4.     State Farm
  5.     Farmers
  6.     Progressive
  7.     American Family
  8.     Nationwide
  9.     Travelers

The Cheapest Car Insurance Companies in 2020

Average Annual Rates:

Car Insurance Hub | Best Car Insurance Companies | Cheapest Car Insurance Companies

Get Cheap Car Insurance Quotes in Your Area

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