Car insurance discounts: A complete guide

By Tara McCabe ·
Woman standing next to car door, checking car insurance discounts.

There’s no question that having your own car can open up possibilities. Think last minute road trips, travelling further for work and not having to lug your shopping home on the bus. The problem is maintaining your wheels can be pricey. Getting cover for your vehicle, fuel and registration all adds up. 

With all that in mind, we’ve come up with a list of car insurance discounts to help you cut costs.

1. Online discounts

If you’re looking for a more low maintenance way to save money on insurance, then look no further than online discounts. Most insurers these days will offer a percentage off your premium, simply for signing up to a policy online.

It almost seems too good to be true that you can be rewarded for taking care of your finances from the comfort of your sofa, but you can! Online discounts usually count for the first year’s premium and can range anywhere from 5% to 15% off.

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2. Multi-policy discounts

More often than not, insurers won’t just operate in one space. For instance, your car insurer won’t just offer cover for vehicles but also for buildings and contents and even life and income protection.

If your insurer does have more than one type of insurance under its belt, you will often be given the option to combine your policies and get a ‘multi-policy discount’.

3. Multi-car insurance discounts

Not to be confused with the multi-policy discount above, the multi car insurance discount is for if you or your household has more than one car. So, if you have multiple cars, or you have a car and live with friends, siblings or other relatives with a car, then you could get a multi-car discount.

Each car can be owned by a different person but the insurance policy for all will have to be listed under one name. Some insurers will limit the number of cars listed on one multi-car policy to about five, but this will vary from policy to policy.

4. Restricted driver discounts

This one would work for anyone who is either the sole driver of their car or who knows that there won’t be many others getting behind the wheel.

In other words, if you can guarantee that there won’t be too many other drivers, or that the other drivers will all be over a certain age, then you may be eligible for a discount on your premium.

5. No claim bonus

If you’ve been trawling through car insurance websites hunting for a better deal, you will most likely have come across the ‘no claim bonus.’ This is sometimes also referred to as a ‘no claim discount’ or even a ‘safe driver discount.’

Now the first thing to know about this discount is that it isn’t so much an immediate ‘money off’ promotion, as it is a long game reward for driving safely. How does it work you ask?

Well, for every 12 months that you don’t make a claim, a discount will be applied to your car insurance premium. The discount, which increases year-on-year can get to as high as 60% or even 70%. Most insurers will cap it at five years or at a certain amount.

Of course, if you do have to make a claim, then your no claim bonus will return back to zero in your next policy period. Some insurers will also have slight variations of this deal, including ones where you build up a discount on claims that you might make, rather than on your actual premium.

6. Family discount

One for the struggling millennial, the family discount can usually be nabbed if you’re under 25 and you opt for the same insurer as your parents.

You might even be eligible for a no-claims discount if you have previously been listed on your parent’s insurance policy and haven’t made any claims.

7. Loyalty discount

As the name suggests, you may be offered a discount on your premium come renewal time, if you’ve been loyal to the same insurer for a number of years.

Top tip: If your insurer doesn’t offer you a discount for being a loyal customer, ask for one!

8. Fuel efficient discount

If you’ve just invested in an eco-friendly set of wheels then you should definitely look for a ‘fuel efficient discount.’ As electric and hybrid vehicles are becoming more popular, more and more insurers are offering discounts for those driving environmentally friendly cars.

9. Pay per km plans

This may not be a ‘discount’, so to speak, but it is a way to pay less on your premium - if you don’t drive your car that much. Usually you can get a ‘pay per km plan’ if you drive less than 15,000 km per year.

Different insurers will work out what you owe in different ways. This could include charging you a low premium and adding on a few cents for each kilometre you drive.

10. One-off specials

One last thing to look out for is one-off specials. These could be anything from actual discounts to gift vouchers. Some insurers will even have offers that include free roadside assistance for a limited time.

You can look out for these anytime of the year and some may be worth your while. As with all these types of car insurance discounts, it will really depend on what your situation is and whether or not the particular car insurance policy suits your needs. 

Head to Mozo’s compare car insurance page to both review policies and discounts.

*Any information provided on this page should be considered a summary and general advice only. All information should be verified before purchase via the relevant Product Disclosure Statement (PDS).

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Tara McCabe
Tara McCabe
Money writer

Tara McCabe writes across all areas of personal finance here at Mozo from banking through to insurance. Tara is expert at practical money tips, showing readers ways to live richer and be socially conscious while doing it. She earned a BA (Hons) in English Literature from Canterbury Christ Church University.