New Car Insurance Discount: How to Qualify, Potential Savings, and More
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Written byJanet Berry-Johnson
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Janet Berry-Johnson, CPA, is a freelance writer with a background in accounting and income tax planning and preparation. She's been writing for Compare.com since 2023 and has also appeared on various business and finance sites, including LendingTree, Chime, Insurify, Forbes, and WSJ. She’s passionate about making complicated financial topics accessible to readers.
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Edited byNick Versaw
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Nick Versaw leads Compare.com's editorial department, where he and his team specialize in crafting helpful, easy-to-understand content about car insurance and other related topics. With nearly a decade of experience writing and editing insurance and personal finance articles, his work has helped readers discover substantial savings on necessary expenses, including insurance, transportation, health care, and more. As an award-winning writer, Nick has seen his work published in countless renowned publications, such as the Washington Post, Los Angeles Times, and U.S. News & World Report. He graduated with Latin honors from Virginia Commonwealth University, where he earned his Bachelor's Degree in Digital Journalism.
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Buying a new car could actually help you save up to 15% on your car insurance. Some insurance companies offer a new car discount because new vehicles often come with the latest safety features that can help reduce the likelihood of accidents and minimize injuries if you get in a collision. This discount is typically for vehicles that are brand new or within a certain age range — usually less than three years old.
Major companies like Allstate, GEICO, and Travelers offer new car discounts, which can help lower your insurance costs while enjoying the benefits of a brand-new vehicle.
We’ll cover everything you need to know about new car discounts, including what you can expect to save, which companies offer them, and other ways to minimize what you pay for car insurance.
How Much You Can Save With a New Car Discount
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How much you can save with a new car discount depends on your car insurance company and where you live, since insurance regulations vary by state.
Many insurance companies offering a new car discount don’t publish the exact discount amount, so it may vary by state, the safety factors included in your car’s make and model, and your unique profile or driving habits.
GEICO is the only company we found that publishes its maximum new car discount, which gives eligible drivers up to 15% off their premiums. Always check with your auto insurer for potential savings.
How to Get a New Car Discount
To qualify for a new car discount, your vehicle typically needs to be brand new or less than three years old. Insurance companies may apply this discount automatically when they recognize the car’s age during the policy setup, but it’s always a good idea to verify the final discount with your insurance agent.
That said, some insurance companies have additional criteria. For example, some insurers may require the vehicle be equipped with specific features, like advanced safety features like blind-spot detection, adaptive cruise control, automatic emergency braking, and lane-departure warnings.
You may be able to add the discount to your policy through the insurance company’s website or mobile app when getting a quote or updating your policy.
If you’re unsure, contact your insurance agent or customer service to ensure you get all available discounts. It’s a quick process that can lead to significant savings on the cost of insuring your car.
Where to Get a New Car Discount
New car discounts aren’t very common — only a handful of major insurance companies offer them. And the exact savings and criteria vary from one company to another.
The table below shows several large insurers that offer this discount. But smaller, regional companies may offer similar discounts so it’s worth shopping around.
Company  | Advertised Discount |
|---|---|
| GEICO | 15% |
| Direct Auto | 10% |
| USAA | Not advertised |
| Allstate | Not advertised |
| Travelers | Not advertised |
Disclaimer: Table data sourced from real-time quotes from Compare.com's 50-plus partner insurance providers and quote estimates from Quadrant Information Services. Actual quotes may vary based on the policy buyer's unique driver profile.
Next, we’ll explore some of these companies and their rules for getting the new car discount added to your policy.
The Best New Car Discounts Currently Available
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Every insurance company offers different discounts and has varying criteria for getting them. Some offer more generous discounts than others, so shopping around and comparing car insurance quotes helps you save on the cost of car insurance.
Below, we cover the top three insurance companies known for offering new car discounts so you can make the most of your new vehicle purchase. Here’s a closer look:
GEICO
Maximum advertised savings: 15%
GEICO offers one of the most generous advertised new car discounts, giving drivers with vehicles up to three years old a 15% discount off certain coverages. The company should automatically apply the discount when you provide the car’s purchase date and model year, but double-check your quote or policy to ensure it’s included.
Direct Auto
Maximum advertised savings: 10%
Direct Auto Insurance — a subsidiary of Allstate — advertises savings of up to 10% off for new vehicles and those equipped with qualifying safety and anti-theft features.
Owning a current model year car gets you a 2% discount, and features like active recovery devices, tracking systems, airbags, and anti-lock brakes can qualify you for even more savings.
USAA
Maximum advertised savings: Varies
USAA doesn’t advertise its discount percentage but offers savings for newer vehicles with certain safety features. Your car must be no more than three years old to qualify.
Anti-theft devices may also qualify for additional discounts with USAA.
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How to Maximize Your New Car Discount Savings
While the new car discount can reduce your insurance premiums, some additional strategies can boost your savings even further.
Some ways to ensure you get the best deal possible include:
Bundle your policies. Many auto insurance companies offer discounts when you bundle your car insurance with your home insurance, renters insurance, or life insurance.
Maintain a clean driving record. Obey traffic laws and take a defensive driving course to learn how to avoid accidents, which can increase your car insurance rates.
Choose a safe vehicle. Buying a car with advanced safety features can help you qualify for even more discounts. Check the safety rankings for specific models with the Insurance Institute for Highway Safety’s Top Safety Picks rating tool before you buy a new vehicle.
Other Common Car Insurance Discounts
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Insurance companies offer various auto insurance discounts to help you save on car insurance. Stack these common car insurance discounts with the new car insurance discount to maximize your savings:
Multi-car discount: Insure more than one vehicle on the same policy to qualify for savings.
Low-mileage discount: You may be eligible for this discount if you drive fewer miles annually than the average driver.
Payment discounts: Some insurance companies offer discounts based on how you receive policy documents or pay your premiums. For example, you might get a discount for opting to receive policy documents electronically, paying your premium in full, or setting up payments through electronic funds transfer (EFT).
Good student discount: If you have high school or college students in your household, maintaining good grades can help them qualify for reduced car insurance rates.
Safe driver discounts: Your insurer may offer a safe driver discount if you go three years or more without an at-fault accident or moving violation.
New Car Discount FAQs
Many drivers have questions about how a new car discount works and what to expect in terms of savings. Here are answers to a few commonly asked questions to help you understand the details.
Not necessarily. While a new car discount can reduce your premiums, new cars may still cost more to insure because of their higher value. Still, advanced safety features in newer cars can help lower the risk of a car accident, which may help you pay less for your liability and medical coverages.
The maximum new car discount varies by insurance company. The highest advertised maximum discount we found in our research was GEICO, at 15% off certain coverages.
To get a new car discount, your car typically needs to be brand new or less than three years old, depending on the insurance company’s rules. Your agent should apply the discount automatically when setting up or updating your policy, but it’s always a good idea to confirm you received the discount.
Companies like GEICO, Progressive, and State Farm are known for offering a wide variety of car insurance discounts. Some discounts you might qualify for include multi-policy, safe driver, and vehicle safety discounts.
Yes. You can and should ask your insurance company about available discounts. Some insurers might not automatically apply all available discounts, so it’s worth asking if you’re getting the best rate possible.
Sources:
Insurance Information Institute, “How to save money on car insurance,” accessed October 23, 2024.
Insurance Information Institute, “What determines the price of an auto insurance policy?” accessed October 23, 2024.
Insurance Information Institute, “Nine ways to lower your auto insurance costs,” accessed October 23, 2024.
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Janet Berry-JohnsonPersonal Finance Writer
Janet Berry-Johnson, CPA, is a freelance writer with a background in accounting and income tax planning and preparation. She's been writing for Compare.com since 2023 and has also appeared on various business and finance sites, including LendingTree, Chime, Insurify, Forbes, and WSJ. She’s passionate about making complicated financial topics accessible to readers.
Nick Versaw leads Compare.com's editorial department, where he and his team specialize in crafting helpful, easy-to-understand content about car insurance and other related topics. With nearly a decade of experience writing and editing insurance and personal finance articles, his work has helped readers discover substantial savings on necessary expenses, including insurance, transportation, health care, and more. As an award-winning writer, Nick has seen his work published in countless renowned publications, such as the Washington Post, Los Angeles Times, and U.S. News & World Report. He graduated with Latin honors from Virginia Commonwealth University, where he earned his Bachelor's Degree in Digital Journalism.