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If you have a car, paying for car insurance is a necessary expense. But shopping your policy and asking about discounts are great ways to save money on your car insurance policy. 

Learn about policy-based discounts – those for advance purchase, loyalty, electronic funds transfer, multiple policies and more – and how to qualify for them. 

Key Takeaways

  • Policy-based car insurance discounts are available based on how you buy and pay for the policy. 
  • Some common car insurance discounts are available for paperless billing, automatic payments and bundling policies. 
  • Most auto insurers cap the total amount you can save through discounts. 

Our take

Policy-based car insurance discounts can help you trim the costs from your budget. While the available discounts can vary from insurer to insurer, it’s helpful to shop around to find an insurance company offering the best rates and discount opportunities for your unique situation. 

What are policy-based car insurance discounts?

A policy-based car insurance discount is granted based on how you buy and pay for your car insurance policy. As you consider your car insurance options, making changes to your policy or how you pay for the policy can help you tap into policy-based discounts. 

Understanding policy-based car insurance discounts

Insurers offer policy-based discounts to drivers who make things easier for the insurance company. For example, buying a policy before your current one expires or paying for the entire policy upfront streamlines the renewal and billing processes. 

We explore some of the most common policy-based auto insurance discounts below so you can understand your options. 

Early signing discount: Beat the clock, boost your savings

If you don’t need a new insurance policy immediately, shopping a week or more in advance can net a discount. In general, you’ll need to get a quote from the insurance company at least a few days or an entire week before your current policy expires to land this discount. But the qualifications for an early shopper discount vary from insurer to insurer. 

See the average discount for advanced purchase in the table below.

Days advanced purchaseBefore discountAfter discountDifferenceDifference
7+ Days$2,360$2,186$1737%
10+ Days$2,272$2,099$1747%

If possible, shop for a new car insurance policy at least a week before your current policy expires. But starting the process around two weeks in advance can give the breathing room you might need. 

Which insurance companies offer early-signing discounts?

Not every car insurance company offers an early-signing discount, but some do. The table below shows the average early-signing discounts from major insurers.

CompanyAverage discount

*Please note: USAA is only available to military community members and their families.

Paid-in-full discount: Pay now, save more later

Many insurance companies will offer a discount if you pay your entire car insurance premium upfront. This reduces the risk that the insurer will have to chase down a payment from you. 

For drivers who want this 9% discount, consider setting aside a monthly amount to pay your next car insurance premiums. For example, if you expect to pay around $500 for a six-month policy, you could set aside $100 for five months to pay for your next renewal. 

The table below highlights how much you might be able to save by paying in full. 

Payment typeBefore discountAfter discountDollar differencePercent difference
Paid in full$1,895 $1,724 $171 9%

Insurance companies offering discounts for paying in full

Many insurance companies offer a pay-in-full discount, but not all do. Additionally, the amount you can save by paying upfront varies from insurer to insurer. The table below highlights insurers who offer this discount. 

CompanyAverage discount

Electronic billing/autopay: Go digital, get discounts

Opting to pay your bill electronically or putting the cost on autopay makes things easier for the insurance company, which is why many offer discounts. 

While the amount you can save varies, most drivers can tap into savings with electronic payments. In addition to saving money, opting for an automated solution can help you avoid accidentally missing a deadline. 

The table below highlights how much you might be able to save through automatic or electronic payments.

CategoryBefore discountAfter discountDollar differencePercent difference
Electronic funds transfer$1,895 $1,824 $71 4%
Electronic signature$1,895 $1,728 $167 9%

What insurance companies offer discounts for digital payments and autopay?

If you want to tap into savings through electronic or automatic payments, you could find an option through a large insurer such as Allstate, Farmers, Nationwide, Progressive, Travelers and more.

See the average discount for electronic funds transfers and electronic signatures in the table below.

CategoryCompanyAverage discount
Electronic funds transferAllstate4%
Electronic funds transferFarmers3%
Electronic funds transferNationwide3%
Electronic funds transferProgressive3%
Electronic funds transferTravelers4%
Electronic funds transferUSAA3%
Electronic signatureProgressive10%
Electronic signatureMercury Insurance3%

Paperless discount: Save the planet, save your money

While you could get a paper bill, most insurance companies offer a discount for going paperless. The table below illustrates how much the average driver saves by going paperless. 

CategoryBefore discountAfter discountDollar differencePercent difference
Paperless/electronic documents$1,895 $1,824 $71 4%

What auto insurance companies offer paperless discounts

To qualify for a paperless discount, consider working with one of the following companies: Allstate, Farmers, Nationwide or Progressive. See their average discounts in the table below.

CompanyAverage discount

Loyalty discount: Stay put, save big

Staying in a long-term relationship with your insurer could help you tap into savings. Many insurance companies offer customer loyalty discounts, which reward drivers for sticking with them year after year. 

The table below shows drivers’ average savings by sticking with the same insurance company year after year. 

Loyalty: Number of yearsBefore discountAfter discountDollar differencePercent difference
1$1,895 $1,805 $90 5%
2$1,895 $1,792 $103 5%
3$1,895 $1,749 $146 8%
4$1,895 $1,740 $155 8%
5$1,895 $1,731 $164 9%
10$1,895 $1,689 $206 11%
15$1,895 $1,687 $208 11%
20$1,895 $1,686 $209 11%

Evaluating loyalty vs. shopping around

If you are happy with your insurance company, it’s worth looking into potential savings through a loyalty discount. But before you sign up for another year with your current insurance company, take some time to shop around. 

But loyalty discounts aren’t always the best way to save money on car insurance: If you’ve been with an insurance company for more than 10 years, you can get a loyalty discount of 11%, but if you shop around, you can save more. 

According to a 2023 drivers survey, 49% of drivers shopped for a new car insurance company in the past year. Of people who switched insurers, 26% of drivers saved 10% on a new policy and 29% of drivers saved 15%.

Depending on the situation, you may or may not find a better deal available through another insurance company. If you find a better rate elsewhere, you’ll have to decide if you want to lock in those savings or pay more for the ease of sticking with your current insurer.

Insurers that offer loyalty car insurance discounts

Insurance companies like Allstate, Geico, Progressive, Nationwide, State Farm and USAA offer loyalty discounts. See more discounts in the table below.

CompanyAverage discount
State Farm18%

Some insurers require you to stay for several years before a loyalty discount is available. If you don’t see your current insurer in the table above, don’t hesitate to ask a customer representative if you qualify for a discount.

Bundling/multi-policy discount: Bundle, save, and smile

Most people have more than one type of insurance. For example, you might have homeowners or renters insurance in addition to car insurance. Or you might have more than one vehicle to insure in your household. These situations could lead to savings if you purchase multiple policies through the same company. 

Beyond the potential savings, getting multiple policies through the same insurer is often convenient. You won’t have to deal with bills from multiple insurers. And if you need to file a claim, you can get familiar with the process to make things easier across all of your policies. 

“My best tip is to bundle your car insurance with other policies, such as homeowners or renters insurance, to receive a multi-policy discount,” says Michael Benoit, a licensed property and casualty insurance broker. 

The table below illustrates how much drivers can save on their auto policies – on average – when bundling different types of policies:

CategoryBefore discountAfter discountDollar differencePercent difference
Condo Policy$1,895 $1,664 $231 12%
Homeowers Policy$1,895 $1,636 $259 13%
Life Policy$1,895 $1,826 $69 4%
Renters Policy$1,895 $1,768 $127 6%

If you want to bundle policies, you’ll likely need to be named on all of the relevant insurance policies

Car insurance companies that offer bundling options and discounts 

Most insurance companies that offer multiple types of insurance policies also offer a bundling discount – Farmers, State Farm, Allstate and Progressive offer the highest discounts. But the amount you can save varies from insurer to insurer.

The table below highlights some of the companies offering a bundling discount:

CompanyAverage discount 
State Farm10%

How often should I review my policy to ensure I’m getting the best discounts?

Reviewing your car insurance policy at least once yearly is useful to ensure you get the best discounts. 

In addition to reviewing your policy for discount opportunities, re-evaluate your situation to ensure that your current insurance coverage is sufficient. 

Do all insurance companies offer the same discounts and at the same rates?

No. While most insurance companies offer discounts, the type offered and the amount you can save vary from company to company. 

Since every insurance company offers different insurance rates and discounts, it’s critical to shop around to find the most affordable car insurance policy for your unique situation. You’ll likely find lower car insurance rates by comparing multiple car insurance quotes. 

What should I do if I believe I qualify for a discount, but it’s not reflected on my premium?

If you think you qualify for a discount, contact your insurance provider.

Sometimes, the insurance company will offer a discount on your current policy. In other cases, the insurer may ask you to wait until the policy renews for the discount to take effect. Note that discounts typically apply to part of your policy—not the entire policy.

Is there a cap on the total discounts one can receive on a car insurance policy?

Yes. Insurance companies will cap your discounts. 


What our expert says

Q: What’s the best way to save money on car insurance?

Michael BenoitLicensed property and casualty insurance broker
“My best tip is to bundle your car insurance with other policies, such as homeowners or renters insurance, to receive a multi-policy discount.”


Methodology editors in 2024 collected rates from Quadrant Information Services for a 40-year-old male driving a 2021 Honda Accord LX with a good insurance score and no violation on record for a full coverage insurance policy with limits 100/300/50 and $500 comprehensive and collision deductibles. We analyzed 2,677,890 records, 4,686 ZIP codes and 1,252 cities nationwide.

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Sarah Sharkey
Contributing Researcher


Sarah Sharkey is a personal finance writer with a master’s degree in management from the Hough School of Business at the University of Florida. She enjoys helping readers find money solutions that work. She has written for numerous personal-finance publications including Money Under 30 and The College Investor.