#save on car insurance
An earlier version of this column misspelled Doug Whiteman’s name. It has been corrected.
Did you know that at least four of the nation’s largest insurers will give you a discount on your car insurance if your vehicle has daytime-running lights?
That’s one money-saving secret Bankrate.com uncovered in its annual deep dive into discounts available from car-insurance plans.
“People don’t know this stuff,” says Doug Whiteman, insurance analyst for Bankrate.com. “It’s difficult to find all these things and insurance companies are under no obligation to provide you with discounts or even a list of them.”
Daytime-running lights, which are lower-beam lights that automatically switch on when a vehicle is moving forward, are a safety feature meant to make cars more visible during daylight hours.
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Though their efficacy in the U.S. has been debated and the National Highway Traffic Safety Administration has determined after three studies, the last of which was in 2008, that the lights have “no significant overall effects on …crashes,” they’re gaining popularity in the dog-eat-dog world of auto insurance because they think consumers want daytime running lights, Whiteman says.
“This is a very, very competitive industry and car insurers want your business.” State Farm, Geico BRK.A, -0.78% , Farmers and USAA all offer the daylight-running lights discount while Allstate, Progressive, Liberty Mutual, Nationwide, American Family and Travelers do not. It may be because daytime-running lights aren’t required in the U.S. and aren’t available on all makes and models like they are in Canada and the European Union. GM GM, -2.22% cars, as well as a handful of foreign carmakers like Toyota TM, -0.38% , Volkswagen VOW, +1.07% , Volvo and Mercedes-Benz, do have them as standard installations.
Safety-related bells and whistles on U.S. cars get lots of discount points from car insurers. Anti-theft and passive-restraint features like air bags, for example, score near across-the-board discounts, with nine of the 10 offering them. (See chart below of which insurers offer what allowances.)
Anti-lock brakes, which would seem a given, are discount-favorites for seven of 10 insurers while hybrids or alternative-fuel vehicles only attract concessions from three insurance companies.
Half the insurers will cut your rates if you drive a newer car, usually brand-new up to three-years-old or less, thinking you’re a more conscientious driver when your vehicle is still ding-free. And if you keep the driving record clear of accidents, all but Liberty Mutual will take the prices down.
Many insurers – eight of the top 10 – would prefer if you didn’t drive so much. And if you’re up for letting them install an electronic monitoring device that will track your mileage – and your whereabouts — they will pare prices.
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Most also like it if you’re part of a group, like a member of the armed forces, an employee of certain companies or graduate of some colleges.
But all that safety and affinity are not as important to insurers as your devotion to them. All 10 will discount policies that bundle car insurance with, say, home insurance and all but Allstate will do so if you’ve got more than one vehicle covered by them.
If you’ve got teens and young adults driving your cars, you already know that you’re paying an extra 20% to 50% on premiums. That’s because car crashes are the leading cause of death for U.S. teens, particularly males ages 16 to 19, according to the Centers for Disease Control.
But smarter kids – because they tend to be more focused, more vigilant and more responsible – will get discounts ranging from 6% to 20%, dependent on what cities they live in, according to a 2013 study by NerdWallet. And they don’t have to be that smart: B average and above is what most insurers require. (New York males showing signs of intelligence can get as much as 50% off those hefty premiums.)
You’ll also see your premium fall if you pay your bill the way insurers most prefer you to — in full annually or with automatic payments.
Check out the chart to see if you qualify for any discounts: