Auto indemnity discounts fall into five categories : driver safety, driver status, policy, vehicle and usage-based. We explain which ones are automatically applied when you get a quotation and which ones require driver enterprise, and we show you how to obtain these discounts and save money on your cable car policy .

Driver safety car insurance discounts

These types of cable car insurance discounts reward drivers for their good drive habits. These are the most common discounts across insurers, and make up a goodly ball of consumers ‘ savings on car insurance rates .

Discount name

Companies that offer the discount

Defensive driving State Farm, Geico, Allstate, Travelers, Nationwide, Progressive, Farmers
Accident-free State Farm, Geico, Allstate, Travelers, Nationwide, Progressive, Farmers
Safe driver State Farm, Geico, Allstate, Travelers, Nationwide, Progressive, Liberty Mutual
Low mileage State Farm, Allstate, Travelers, Nationwide, Progressive

Defensive driving discount (10% to 15%)

Drivers who take defensive drive lessons from a attest or register school will be qualified for a 10 % to 15 % discount on their liability, collision and personal injury or medical payments coverages. Classes teach drivers how to better tax road, dealings and upwind conditions to avoid accidents .
One way to find classes is through the National Safety Council, which offers online defensive driving lessons certified by most states. Some companies mechanically ask whether you ‘ve taken defensive drive lessons when quoting your rate, but you can even get the discount rate in the middle of your policy. last, before signing up for the moral, check with your insurance company to see if you must be a senior citizen to be eligible for these reductions .
The table under shows how much classes can cost at two national schools, and the size of the rebate ( using Geico as an exercise ). Savings are calculated based on average policy outgo per the National Association of Insurance Commissioners ( NAIC ) .

State

I Drive Safely

American Safety Council

Sample discount

Average premium

Estimated savings

California $19.95 $19.95 5% $745.55 $37.28
New York $29.95 $24.95 10% $750.63 $75.06
Pennsylvania $30.00 $19.95 10% $488.19 $48.82
Delaware $14.95 $12.95 15% $748.55 $112.28

Accident-free and good-driver discounts

Companies like Allstate, Geico, State Farm and most others offer good-driver discounts if you have been accident-free for three to five years. This dismiss is normally automatically applied. If you do not qualify at signup, you can adjust your premium at the time of your future refilling if you have been accident-free for the ask fourth dimension. The definition of a “ good driver ” may change slightly across companies, thus check with your agent for the details .

Safe driver discount (10%)

safe driver discounts are given to motorists for cautious habits such as having all passengers wear seat belts, abject driving speeds, less aggressive brake, etc. We have seen insurers discounting indebtedness and collision car insurance premiums by about 10 % and higher for these commodity drive habits .
For many insurers, safe and good-driver discounts are the lapp, with the exception of Geico and Allstate, which distinguish between the two and offer them as discriminate discounts. Companies like Progressive and Allstate normally monitor safe repel via their Snapshot and Drivewise programs, which we discuss more below .

Savings for low mileage and usage (varies, up to 20%)

If you do n’t use your car often, you may qualify for a low mileage usage dismiss. Whenever you get a quote, insurers will ask about your modal annual mileage. The average person drives about 12,000 miles per year, but those who drive less than 7,500 can see some great discounts. Safeco offers a rebate deoxyadenosine monophosphate high as 20 %. In decree to qualify for this discount rate at sealed companies, however, you may have to sign up for driver monitoring engineering, which we discuss more downstairs .

Driver status car insurance discounts

These are discounts that are based on the driver, good not on their drive habits. Whether your child is a thoroughly student or you served in the military, your personal visibility can be key to saving a good sum on your car indemnity .

Discount name

Companies that offer the discount

Good student State Farm, Geico, Allstate, Travelers, Nationwide, Progressive, Liberty Mutual
Student away State Farm, Allstate, Travelers, Liberty Mutual, Farmers, Nationwide
Military Geico, Esurance, USAA
Professional Geico, Farmers, Travelers, Nationwide, Liberty Mutual
Senior Geico, Allstate, Liberty Mutual

Good-student discount (5% to 25%)

For young drivers, rates are very high until you turn 25. If you maintain a B average, however, you can qualify for savings american samoa high as 25 % in the form of a good-student dismiss. You just need to be a full-time student and provide proof of your scholastic records to your insurance company .

Away-from-home student discount (5% to 25%)

As a rear, you can save on your policy if your child driver left their car at home when they went to college and the college is located more than 100 miles aside from home plate. You may ask your agent about this rebate right aside or during your adjacent reclamation. This dismiss should show a significant decrease in your liability coverage, as we have seen ampere much as 25 % savings on premiums .

Professional and academic organizations, employee discounts (2% to 10%)

Most indemnity companies have affiliations and partnerships with other organizations that provide their members or employees with extra discounts. These tend to be trade or professional organizations and university alumni groups. Geico presently partners with more than 500 professional and university organizations whose members may earn membership discounts upon buying a policy. For these members, Geico offers a 3 % discount on the total policy premium .

Senior/mature driver (5% to 10%)

Drivers above the age of 55 may qualify for extra premium reductions in the shape of a “ senior ” or “ senesce ” discount. Allstate offers a 10 % discount for their basic liability and physical damage coverage. Some insurers will besides reward drivers past the long time of 55 if they receive certification from taking a ripen driver improvement course on-line. This course covers alike ground as a defensive driving class and helps you brush up on your cognition of the latest defensive drive tips .

Military and federal employee (8% to 15%)

If you have served the United States through military or federal government use, you can find companies that honor that contribution. Geico, for exercise, gives 8 % to 15 % discounts to active service members and federal employees, angstrom well as veterans and retirees, for their integral policy premium. other companies such as USAA entirely provide car indemnity products to military and refutation personnel, and extend that profit to up to two generations of family members .

Policy car insurance discounts

policy cable car policy discounts are based on your policy. You can alter your policy in certain ways so that you get specific discounts. sometimes the discounts are mechanically applied, and sometimes you have to request them .

Discount name

Companies that offer the discount

Homeowner State Farm, Geico, Allstate, Travelers, Nationwide, Progressive, Farmers
Bundling/multi-policy State Farm, Geico, Allstate, Travelers, Nationwide, Progressive, Farmers
Early signing State Farm, Geico, Allstate, Travelers, Nationwide, Progressive, Liberty Mutual
Paid in full State Farm, Allstate, Travelers, Nationwide, Progressive
Electronic billing Geico, Allstate, Progressive, Farmers, Liberty Mutual, Nationwide, Travelers
Loyalty State Farm, Progressive, USAA, Farmers, Nationwide

Homeowner car insurance discount (varies, 3%)

Some insurers provide a homeownership deduction evening if the policyholder has not purchased homeowners policy with them. When available, the deduction is applied to the liability, physical wrong, personal wound protection and uninsured/underinsured motorist premiums — a majority of the unlike types of coverage, except lease and tow coverage. We found that Progressive gives a 3 % dismiss to qualifying homeowners. Some insurers will honor both bundling and being a homeowner, and the discounts are normally mechanically applied when you acquire your quote on-line. We discuss bundling discounts below .

Multi-car discount (varies, up to 25%)

We have seen insurers such as State Farm giving ampere much as a 25 % deduction for a multi-car policy. For a 34-year-old copulate insuring their Toyota Camry and Nissan Versa, putting both cars under the same policy could save them about $ 200 per year on their car insurance costs. Most insurers will ask that all vehicles on the lapp policy be owned by persons related by blood or marriage, but in some cases, insurers will besides accept unrelated roommates for multi-car discount retainer ( given that they might jointly own or drive the vehicles ) .

Bundling/multi-policy discount (5% to 25%)

Consumers with multiple assets to protect, such as car and home, can potentially save on their overall policy costs by placing them with the same caller. The bunch can come in many combinations, such as car plus home, car plus gravy boat, and car plus home plus umbrella policy, to name a few, and each results in a different premium reduction. While the discounts are not necessarily equally applied across different indemnity lines, insurers give a range of 5 % to 25 % off the sum car insurance bounty for bundling policies .

Savings for signing early (~3%)

When you shop for insurance before your current policy expires, look out for the early on sign discount. This tends to be a rare rebate — less than half of the major insurers we ‘ve looked into crack it. When it is available, you can get 3 % to 10 % taken off your full policy agio, depending on how far in advance you sign up for the policy. Travelers, for exemplar, offers this rebate if you sign up three days ahead of your current policy ‘s passing .

Paid-in-full reduction (5% to 10%)

Insurers encourage you to pay your entire six-month or annual premium up front by giving you a discount of around 5 % to 10 %. This is a separate option on your quote page that you will have to choose, and it normally requires the full premium upon the policy ‘s first effective date in order for the discount rate to kick in .

Electronic billing/autopay (5% to 10%, or $30)

If you have opted for electronic charge, there is a casual you can qualify for some savings on your premiums. This type of discount is n’t very common ; by and large, home and larger policy companies with on-line presences have this available, while smaller carriers do n’t have the infrastructure .
Nationwide and Allied take $ 30 off for setting up automatic payments through electronic investment company transfer ( EFT ). Allstate has two divide discounts under this class : 5 % for automatic EFT payments and 10 % for keeping your bills paperless .

Loyalty discount

Insurers fight to keep their business by offering loyalty discounts to congregation customers. While some providers like Geico refer to their multi-car and bundling discounts as loyalty discounts, we have seen other insurers rewarding consumers who ‘ve stayed with the lapp carrier for a long time. This dismiss does n’t necessarily come in the usual shape as a premium decrease, but it could be more reinforce in the long run .
For exercise, Progressive has a tiered commitment rewards plan that honors fifth-year customers with one big accident forgiveness and distinguished customer service. What does accident forgiveness sum to ? Loyal drivers could be saving approximately 20 % in sum by avoiding the accident surcharge applied to their indebtedness and collision coverage premiums. Loyalty plan specifics vary by insurance company and department of state .
One note of caution for patriotic customers : It might hush be worth your while to shop around for rates if price is crucial to you and your insurance company has regularly increased rates. Some studies, such as one from the Office of Public Insurance Counsel in Texas, indicate that on average long-run policyholders could save over 19 % on their annual car premiums by switching .

Vehicle car insurance discounts

If your car comes with certain attributes such as an anti-theft device, VIN stitching or anti-lock brakes, you will probably qualify for a few discounts. These additions to your vehicle provide a level of comfort to your policy party because they can prevent dearly-won price .

Discount name

Companies that offer the discount

Anti-theft State Farm, Geico, Allstate, Travelers, Nationwide, Progressive, Farmers
Anti-lock brakes State Farm, Geico, Allstate, Travelers, Nationwide, Progressive, Farmers
Passive restraint State Farm, Geico, Allstate, Travelers, Nationwide, Progressive, Liberty Mutual
New car State Farm, Allstate, Travelers, Nationwide, Progressive
Daytime running lights Geico, Allstate, Progressive, Farmers, Liberty Mutual, Nationwide, Travelers

Anti-theft car insurance discount (5% to 15%)

Having these devices and features may help provide drivers with peace of mind, deter actual larceny or help recover steal vehicles, but they actually do little when it comes to saving on your car indemnity premiums. Motorists can save 5 % to 15 % on their comprehensive coverage ( up to 25 % when insurers allow stacking ), but comprehensive premiums tend to be the cheapest nibble of your entire coverage. Since these devices begin at about $ 20, and can cost up to $ 200 or more, their costs normally outweigh their benefits .
We do n’t recommend purchasing anti-theft devices for the sake of saving on your premiums .
Consumers should consider them an investing that can go a long way in preventing further property loss and the resulting premium increase. If your car is frequently the target of car thefts, investing in one of these anti-theft devices may make sense.

here ‘s an model of an anti-theft rebate in action : A State Farm customer gets both a hood-lock and a passive disabling system totaling $ 180. The company gives drivers a 10 % discount rate on their comprehensive coverage premiums. Based on the average comprehensive coverage premium of $ 134 a year, this works out to a savings of only $ 13.40 .

Anti-lock brakes (5% to 10%)

Most insurers require an anti-lock brake system ( ABS ) to be factory-installed in orderliness for a vehicle to qualify for this dismiss. As a solution, this dismiss is normally mechanically applied when you obtain a quote. however, if you do not see this discount on your policy, always ask your agent to verify. The discount rate could mean 5 % to 10 % off your collision coverage agio, and depending on your cable car type and deductible, that could translate to savings of $ 20 to $ 100 a year .

Passive restraint (25% to 30%)

passive voice restraint equipment includes front airbags and induct belts. Since 1983, all raw cars have passive voice restraint systems installed by default, and insurers give out generous discounts for at least driver ‘s buttocks and front passenger seat airbags and seat belts. When the vehicle meets the requirements, passive restraint discounts of 25 % to 30 % are applied to the policy ‘s personal injury auspices or aesculapian payments coverage premium .

New car (10%)

For drivers insuring a car they fair purchased, a raw car discount could be available to reduce the monetary value of your physical damage coverage premium. This truly differs by insurance company and express, along with how “ raw ” is defined. For exemplar, Allstate offers new car discounts if the driver is the car ‘s beginning title owner and the vehicle is a stream model year or one year anterior. Once drivers and their vehicles qualify, however, the 10 % discount will remain on the insured ‘s policy for three years without extra renewal carry through .

Daytime running lights (~3%)

fair like your night headlights, day running lights are believed to reduce collision accidents. While manufacturers do n’t always equip cars with day running lights, having them could get drivers a 3 % deduction on about the integral cable car indemnity agio ( except for comprehensive coverage ). Although there are still debates about the potency of day running lights, respective large insurers offer this discount, including but not limit to : Geico, Allstate and State Farm .

Usage-based discount programs

A phone number of insurers have gone a pace further to reward condom drive by creating gadgets that monitor a customer ‘s drive habits. Drivers can insert a doodad that measures metrics like speed, mileage, time of day driven and braking natural process. here are a few examples :

  • Progressive Snapshot
  • Allstate Drivewise
  • Travelers IntelliDrive

Upon policy registration, drivers receive a appliance that connects to their car ‘s on-board diagnostics ( OBD ) port ( standard for cars manufactured after 1996 ), which allows the insurance company to record their drivers ‘ data. Based on the data collected over six straight months, your cable car insurance company will determine if you ‘re eligible for a usage-based discount or rewards program. With Progressive, Snapshot discounts range from 0 % to 30 % on your full premium — with the average being 6 % according to the caller ‘s reports .

Expert Insights to Help You Make Smarter Financial Decisions

ValuePenguin has curated an exclusive panel of professionals, spanning respective areas of expertness, to help dissect difficult subjects and empower you to make smart fiscal decisions. Read on for more car policy insights .

  1. Discounts help companies learn about consumers’ behaviors. For instance, auto insurance companies provide discounts based on safe driving and grades. Are certain age groups more likely to trade their personal data for discounts?
  2. How might the perception of a good deal or discount, even if there is risk associated with it, impact someone’s buying decision? How does that compare with the perception of a low price with no discount?
  3. Are discount and/or reward programs, such as accident forgiveness or safe driving discounts, more beneficial to attract new customers or to help maintain a current, loyal consumer base?
  4. A recent survey by ValuePenguin revealed that nearly 30% of women had never taken advantage of an auto insurance discount, compared to only 13% of men. Can you please elaborate on why you believe there may be a gap in those taking advantage of these types of loyalty programs?
  5. Some car shoppers may be willing to shell out more cash up front to purchase upgraded technology, with the anticipation that an insurance discount will offset the splurge. At what point do discount programs become problematic for consumers?

headshot of expert

  • Julio Sevilla, Ph.D.
  • Associate Professor of Marketing, University of Georgia
  • Read Answer

headshot of expert

  • J. Ian Norris
  • Associate Professor of Marketing, Berea College
  • Read Answer

headshot of expert

  • Benjamin R. Shiller
  • Assistant Professor of Economics, Brandeis University
  • Read Answer

headshot of expert

  • Joy Lu
  • Assistant Professor of Marketing, Carnegie Mellon University
  • Read Answer
  • Abhijit Roy
  • Professor of Marketing at the Kania School of Management
  • Read Answer
  • Ryan McCann
  • Assistant Professor, Division of Math and Science
  • Read Answer

The comment provided by these industry experts represent their viewpoints and opinions alone .

Julio Sevilla, Ph.D.

Associate Professor of Marketing, University of Georgia

Discounts help companies learn about consumers’ behaviors. For instance, auto insurance companies provide discounts based on safe driving and grades. Are certain age groups more likely to trade their personal data for discounts?

In general, younger consumers, as in millennials or younger, are more receptive to trusting on-line entities and volition to parcel their data in exchange for access to free services, tailored discounts or search results, and overall a more customize and effective on-line experience. In the case of car indemnity discounts, this is the group that is normally considered riskier and pays the highest premiums, therefore getting a rebate in exchange for data may be a win-win .

How might the perception of a good deal or discount, even if there is risk associated with it, impact someone’s buying decision? How does that compare with the perception of a low price with no discount?

I think this depends on who is offering the discounted or lower price. If it is a market-leading tauten, then consumers may however trust the brand and find the opportunity appealing. If the off is a less know or suspect brand, then this discounted or lower price may be perceived as bad and not trustworthy, which may lead consumers to second-guess or at least to further scrutinize the details of the offer. This may besides apply to credible brands offering discounted or lower prices if these truly deviate from what a consumer considers normal .

Are discount and/or reward programs, such as accident forgiveness or safe driving discounts, more beneficial to attract new customers or to help maintain a current, loyal consumer base?

These are both persuasive tools to attract new customers and to maintain current ones equally long as the prices are competitive. Some consumers do not bargain on their policy, as this is a not highly involving product class despite its relatively high price. These are the consumers who may stay indefinitely with a sword unless the price becomes prohibitive. There are other consumers who like to shop around every six or 12 months, particularly if they see an ad with this type of oblation or if their premium goes up even if good slightly. For these consumers, being exposed to this type of appeal either by their stream or prospective provider can be very persuasive .

A recent survey by ValuePenguin revealed that nearly 30% of women had never taken advantage of an auto insurance discount, compared to only 13% of men. Can you please elaborate on why you believe there may be a gap in those taking advantage of these types of loyalty programs?

In general women are more involve with patronize, which will lead them to look for discounts more than men. This applies to department shop patronize, groceries, etc. interestingly, car is an exception, as cars are more involving to men than to women, therefore men will shop around more when buying cars, policy, etc. For couples, men may besides be in charge of handling car-related purchases, hence their higher likelihood of having taken advantage of discounts in this product category .

Some car shoppers may be willing to shell out more cash up front to purchase upgraded technology, with the anticipation that an insurance discount will offset the splurge. At what point do discount programs become problematic for consumers?

Past work has shown that consumers are very sensitive to the presence of a rebate and not constantly american samoa much to the magnitude of the deduction, specially for not highly involving product categories like insurance. Given this, they may overspend on cable car technologies that may cost hundreds and good deliver discounts in the tens. additionally, if the consumer truly desires acquiring the engineering beyond the opportunity of getting a car insurance rebate, then this small deduction may serve as a license to justify acquiring the engineering. Past research has shown that some people like to pay for advanced technologies that they may not even use, so even better if a small discount helps justify the purchase .
Back to all experts { “ backgroundColor ” : ” ice ”, ” content ” : ” \u003C\/p\u003E\n\n\u003Ch3 id=\ ” expert-julio-sevilla\ ” \u003EJulio Sevilla, Ph.D.\u003C\/h3\u003E\n\n\u003Cp\u003EAssociate Professor of Marketing, University of Georgia\u003C\/p\u003E\n\n\u003Cp\u003E\u003Cdiv class=\ ” ShortcodeToggle — root ShortcodeToggle — article \ ” id=\u003E\n \u003Cbutton class=\ ” ShortcodeToggle — toggle\ ” onclick=\ ” this.parentNode.classList.toggle ( ‘ShortcodeToggle — assailable ‘ ) ; \ ” \u003E\u003Cp class=\ ” ShortcodeToggle — label\ ” \u003ESee their advice\u003C\/p\u003E\u003C\/button\u003E\n \u003Cdiv class=\ ” ShortcodeToggle — contents-wrapper\ ” \u003E\n \u003Cdiv class=\ ” ShortcodeToggle — contents\ ” \u003E\n \u003C\/p\u003E\n\n\u003Ch4\u003EDiscounts assistant companies learn about consumers\u2019 behaviors. For exemplify, car policy companies provide discounts based on safe drive and grades. Are certain age groups more likely to trade their personal data for discounts ? \u003C\/h4\u003E\n\n\u003Cp\u003EIn general, younger consumers, as in millennials or younger, are more open to trusting on-line entities and volition to share their data in exchange for access to free services, tailored discounts or search results, and overall a more customize and efficient on-line experience. In the case of car indemnity discounts, this is the group that is normally considered riskier and pays the highest premiums, therefore getting a discount in commute for data may be a win-win.\u003C\/p\u003E\n\n\u003Ch4\u003EHow might the perception of a good deal or rebate, tied if there is risk associated with it, impact person ‘s buy decisiveness ? How does that compare with the perception of a moo price with no rebate ? \u003C\/h4\u003E\n\n\u003Cp\u003EI think this depends on who is offering the discounted or lower price. If it is a market-leading tauten, then consumers may calm trust the mark and find the opportunity appealing. If the off is a less know or suspect brand, then this discounted or lower price may be perceived as hazardous and not trustworthy, which may lead consumers to second-guess or at least to far scrutinize the details of the oblation. This may besides apply to credible brands offering discounted or lower prices if these sincerely aberrant from what a consumer considers normal.\u003C\/p\u003E\n\n\u003Ch4\u003EAre dismiss and\/or reward programs, such as accident forgiveness or dependable driving discounts, more beneficial to attract newly customers or to help maintain a current, loyal consumer base ? \u003C\/h4\u003E\n\n\u003Cp\u003EThese are both persuasive tools to attract new customers and to maintain current ones arsenic long as the prices are competitive. Some consumers do not bargain on their insurance, as this is a not highly involving product category despite its relatively high price. These are the consumers who may stay indefinitely with a brand unless the price becomes prohibitive. There are other consumers who like to shop around every six or 12 months, specially if they see an ad with this type of offer or if their premium goes up even if fair slightly. For these consumers, being exposed to this type of invoke either by their current or prospective supplier can be very persuasive.\u003C\/p\u003E\n\n\u003Ch4\u003EA recent surveil by ValuePenguin revealed that about 30 % of women had never taken advantage of an car policy discount rate, compared to only 13 % of men. Can you please elaborate on why you believe there may be a break in those taking advantage of these types of loyalty programs ? \u003C\/h4\u003E\n\n\u003Cp\u003EIn general women are more involve with shopping, which will lead them to look for discounts more than men. This applies to department storehouse shop, groceries, etc. interestingly, car is an exception, as cars are more involving to men than to women, hence men will shop about more when buying cars, policy, etc. For couples, men may besides be in commission of handling car-related purchases, hence their higher likelihood of having taken advantage of discounts in this merchandise category.\u003C\/p\u003E\n\n\u003Ch4\u003ESome car shoppers may be bequeath to shell out more cash up front to purchase promote technology, with the anticipation that an indemnity discount will offset the splurge. At what point do discount programs become baffling for consumers ? \u003C\/h4\u003E\n\n\u003Cp\u003EPast make has shown that consumers are very medium to the presence of a deduction and not always vitamin a much to the magnitude of the deduction, specially for not highly involving product categories like insurance. Given this, they may overspend on car technologies that may cost hundreds and merely deliver discounts in the tens. additionally, if the consumer rightfully desires acquiring the engineering beyond the opportunity of getting a car policy discount rate, then this small discount may serve as a license to justify acquiring the engineering. Past research has shown that some people like to pay for advance technologies that they may not flush use, so even better if a little rebate helps justify the purchase.\u003C\/p\u003E\n\n\u003Cp\u003E\u003Cdiv class=\ ” ShortcodeAlign — root ShortcodeAlign — horizontal-center\ ” \u003E\n \u003Cdiv class=\ ” ShortcodeAlign — container\ ” \u003E \n \u003Cspan\u003E\u003Ca class=\ ” ShortcodeLink — root Button — root Button — primary coil Button — auto-width\ ” title=\ ” Back to all experts\ ” href=\ ” # expertadvice\ ” \u003EBack to all experts\u003C\/a\u003E\u003C\/span\u003E\n \u003C\/div\u003E\n\u003C\/div\u003E\n\u003C\/p\u003E\n\n\u003Cp\u003E\n \u003C\/div\u003E\n \u003C\/div\u003E\n\u003C\/div\u003E\n\n ”, ” padding ” : ” double ” }

J. Ian Norris

Associate Professor of Marketing, Berea College

Discounts help companies learn about consumers’ behaviors. For instance, auto insurance companies provide discounts based on safe driving and grades. Are certain age groups more likely to trade their personal data for discounts?

research demonstrates that younger consumers are more comfortable with sharing since they have grown up in an environment in which it is relatively convention to trade, say, social media insights for the unblock use of Facebook and such. On the other hand, younger consumers are besides a bite more digitally grok, so they know more about when they are being tracked and how. This might besides make them a morsel more disbelieving of these kinds of offers if they are perceived to be deceptive or misleading in any means .

How might the perception of a good deal or discount, even if there is risk associated with it, impact someone’s buying decision? How does that compare with the perception of a low price with no discount?

There is some research in consumer demeanor that shows discount can affect quality perceptions. Of course, low-cost alternatives can besides be perceived as lower quality when they are easily comparable to other options. so I think it would come down to whether consumers are doing a lot of monetary value comparison-shopping for indemnity, as I imagine they are. On the other hand, “ quality ” might not be well evaluated for consumers when it comes to policy. My guess is the bigger interrogate is one of hope : Will the company take wish of me when I need it ? In this encase, the more important question will be how discount or casual broken price affects perceptions of faith for automobile indemnity .

Are discount and/or reward programs, such as accident forgiveness or safe driving discounts, more beneficial to attract new customers or to help maintain a current, loyal consumer base?

In general, discounts are much used to attract new customers or bring back old ones. This is particularly authoritative in an industry where the options are reasonably homogeneous — there are many ways of packaging and customize indemnity, of naturally, but it is a mature product with a well-established clientele model that works very similarly across providers. It can be a bite hard for providers to differentiate themselves for customers in a way that might allow them to use a more agio price model. angstrom far as reward programs, these are designed to maintain current customers. Reward programs work like anything else by reinforcing consumers for the decisions they make — decisions to renew a policy or, as we are seeing increasingly, condom force decisions. Given that safe drive discounts are relatively fresh, I do think it is an interest wonder as to how effective they might be in attracting new customers. I imagine that drivers who already know they drive safely might find this an appealing promotional scheme. For dangerous drivers, the more concern question would be whether it actually promotes behavior exchange .

A recent survey by ValuePenguin revealed that nearly 30% of women had never taken advantage of an auto insurance discount, compared to only 13% of men. Can you please elaborate on why you believe there may be a gap in those taking advantage of these types of loyalty programs?

If I knew nothing about the product, I would assume that any consumer more likely to take advantage of a deduction may have evaluated the product less carefully. That is, discounting is sort of a low-effort consumer scheme — it works when consumers do n’t care ampere much about the specific product attributes, or when they do n’t see competitors as highly differentiated. then this discover suggests to me that women are evaluating insurance options more carefully than men, possibly. This could mean women are more careful shoppers in general, or it could mean that men and women perceive indemnity, as a product, differently. For exemplify, a consumer that sees insurance as a strictly utilitarian intersection may precisely make a quick cost-benefit calculation and be tempted by a discount. But insurance is besides a product that could be associated with needs and motives related to safety, believe and belong — needs that could motivate a deeper evaluation of the merchandise .

Some car shoppers may be willing to shell out more cash up front to purchase upgraded technology, with the anticipation that an insurance discount will offset the splurge. At what point do discount programs become problematic for consumers?

I think carefully segmenting the grocery store is necessary here. A customer that is able to buy more car improving front is, in hypothesis, a customer of greater means — thus this would reflect some pretty advanced fiscal argue. I would think transparency with this kind of consumer would be all-important on the share of an insurance company .
Back to all experts { “ backgroundColor ” : ” frost ”, ” message ” : ” \u003C\/p\u003E\n\n\u003Ch3 id=\ ” expert-j-ian-norris\ ” \u003EJ. Ian Norris\u003C\/h3\u003E\n\n\u003Cp\u003EAssociate Professor of Marketing, Berea College\u003C\/p\u003E\n\n\u003Cp\u003E\u003Cdiv class=\ ” ShortcodeToggle — etymon ShortcodeToggle — article \ ” id=\u003E\n \u003Cbutton class=\ ” ShortcodeToggle — toggle\ ” onclick=\ ” this.parentNode.classList.toggle ( ‘ShortcodeToggle — open ‘ ) ; \ ” \u003E\u003Cp class=\ ” ShortcodeToggle — label\ ” \u003ESee their advice\u003C\/p\u003E\u003C\/button\u003E\n \u003Cdiv class=\ ” ShortcodeToggle — contents-wrapper\ ” \u003E\n \u003Cdiv class=\ ” ShortcodeToggle — contents\ ” \u003E\n \u003C\/p\u003E\n\n\u003Ch4\u003EDiscounts help companies learn about consumers\u2019 behaviors. For exemplify, car policy companies provide discounts based on dependable drive and grades. Are certain historic period groups more probably to trade their personal data for discounts ? \u003C\/h4\u003E\n\n\u003Cp\u003EResearch demonstrates that younger consumers are more comfortable with sharing since they have grown up in an environment in which it is relatively normal to trade, say, social media insights for the free use of Facebook and such. On the other hand, younger consumers are besides a morsel more digitally grok, so they know more about when they are being tracked and how. This might besides make them a bit more doubting of these kinds of offers if they are perceived to be deceptive or misleading in any way.\u003C\/p\u003E\n\n\u003Ch4\u003EHow might the perception of a effective deal or dismiss, even if there is gamble associated with it, impact person ‘s buy decision ? How does that compare with the perception of a low price with no deduction ? \u003C\/h4\u003E\n\n\u003Cp\u003EThere is some research in consumer behavior that shows discount can affect quality perceptions. Of class, low-cost alternatives can besides be perceived as lower quality when they are well comparable to other options. indeed I think it would come down to whether consumers are doing a fortune of price comparison-shopping for insurance, as I imagine they are. On the other hand, \ ” quality\ ” might not be well evaluated for consumers when it comes to policy. My guess is the bigger question is one of entrust : Will the company take care of me when I need it ? In this subject, the more crucial wonder will be how discount or everyday low price affects perceptions of trust for automobile insurance.\u003C\/p\u003E\n\n\u003Ch3\u003EAre rebate and\/or advantage programs, such as accident forgiveness or safe driving discounts, more beneficial to attract new customers or to help maintain a current, firm consumer base ? \u003C\/h3\u003E\n\n\u003Cp\u003EIn general, discounts are frequently used to attract newly customers or bring back old ones. This is particularly important in an industry where the options are slightly homogeneous \u2014 there are many ways of box and customize insurance, of course, but it is a mature intersection with a well-established commercial enterprise model that works very similarly across providers. It can be a spot hard for providers to differentiate themselves for customers in a way that might allow them to use a more agio price model. arsenic far as wages programs, these are designed to maintain current customers. Reward programs work like anything else by reinforcing consumers for the decisions they make \u2014 decisions to renew a policy or, as we are seeing increasingly, safe drive decisions. Given that safe tug discounts are relatively new, I do think it is an concern interrogate as to how effective they might be in attracting new customers. I imagine that drivers who already know they drive safely might find this an invoke promotional scheme. For insecure drivers, the more interest interview would be whether it actually promotes behavior change.\u003C\/p\u003E\n\n\u003Ch4\u003EA recent surveil by ValuePenguin revealed that closely 30 % of women had never taken advantage of an car insurance discount rate, compared to merely 13 % of men. Can you please elaborate on why you believe there may be a opening in those taking advantage of these types of commitment programs ? \u003C\/h4\u003E\n\n\u003Cp\u003EIf I knew nothing about the product, I would assume that any consumer more likely to take advantage of a deduction may have evaluated the intersection less cautiously. That is, discounting is sort of a low-effort consumer strategy \u2014 it works when consumers do n’t care a much about the specific product attributes, or when they do n’t see competitors as highly differentiated. so this find suggests to me that women are evaluating policy options more cautiously than men, possibly. This could mean women are more careful shoppers in general, or it could mean that men and women perceive insurance, as a product, differently. For example, a consumer that sees insurance as a strictly utilitarian product may just make a quick cost-benefit calculation and be tempted by a dismiss. But indemnity is besides a intersection that could be associated with needs and motives related to safety, trust and belong \u2014 needs that could motivate a deeper evaluation of the product.\u003C\/p\u003E\n\n\u003Ch4\u003ESome car shoppers may be will to shell out more cash up front to purchase upgrade engineering, with the prediction that an insurance dismiss will offset the splurge. At what detail do deduction programs become debatable for consumers ? \u003C\/h4\u003E\n\n\u003Cp\u003EI think cautiously segmenting the commercialize is necessary here. A customer that is able to buy more car improving front is, in theory, a customer of greater means \u2014 so this would reflect some pretty sophisticate fiscal reason. I would think transparency with this kind of consumer would be essential on the separate of an policy company.\u003C\/p\u003E\n\n\u003Cp\u003E\u003Cdiv class=\ ” ShortcodeAlign — root ShortcodeAlign — horizontal-center\ ” \u003E\n \u003Cdiv class=\ ” ShortcodeAlign — container\ ” \u003E \n \u003Cspan\u003E\u003Ca class=\ ” ShortcodeLink — root Button — root Button — elementary Button — auto-width\ ” title=\ ” Back to all experts\ ” href=\ ” # expertadvice\ ” \u003EBack to all experts\u003C\/a\u003E\u003C\/span\u003E\n \u003C\/div\u003E\n\u003C\/div\u003E\n\u003C\/p\u003E\n\n\u003Cp\u003E\n \u003C\/div\u003E\n \u003C\/div\u003E\n\u003C\/div\u003E\n\n ”, ” padding ” : ” double ” }

Benjamin R. Shiller

Assistant Professor of Economics, Brandeis University

Are discount and/or reward programs, such as accident forgiveness or safe driving discounts, more beneficial to attract new customers or to help maintain a current, loyal consumer base?

While dependable driving discounts ( like Progressive ‘s Snapshot course of study ) initially attracted a lot of newfangled customers, their impact on customer commitment is last, at least for condom drivers. condom drivers receive a hearty rebate based on their observe force habits ( using a telematics device ). But entirely their current insurance company — the one that monitored them — knows that they have such safe driving habits. typically, no other insurance company can offer a competitive price to these drivers, at least initially. If a consumer were to switch to another insurance company with a safe force deduction, they would need to pay a higher price at least until they have been monitored long enough to verify that they indeed have safe drive habits. furthermore, many consumers dislike being monitored therefore close. The consumer besides faces a risk that the adjacent insurance company may not reach the like ending that the driver is then safe, and then the dismiss may be smaller .

Some car shoppers may be willing to shell out more cash up front to purchase upgraded technology, with the anticipation that an insurance discount will offset the splurge. At what point do discount programs become problematic for consumers?

There are versatile policy cost estimators one can use when factoring insurance costs into new car purchase decisions. however, one should be very careful. Some of the safest vehicles incorporate accident prevention technologies into the bumper and side mirrors of vehicles. While these technologies help prevent and lessen the impact of severe accidents, they are expensive to repair. evening a minor accident can result in a large bill for vehicles with progress guard technologies, which consumers end up paying a fortune of through their deductible and higher premiums later on if they submit a title .
Back to all experts { “ backgroundColor ” : ” ice rink ”, ” message ” : ” \u003C\/p\u003E\n\n\u003Ch3 id=\ ” expert-benjamin-r-shiller\ ” \u003EBenjamin R. Shiller\u003C\/h3\u003E\n\n\u003Cp\u003EAssistant Professor of Economics, Brandeis University\u003C\/p\u003E\n\n\u003Cp\u003E\u003Cdiv class=\ ” ShortcodeToggle — root ShortcodeToggle — article \ ” id=\u003E\n \u003Cbutton class=\ ” ShortcodeToggle — toggle\ ” onclick=\ ” this.parentNode.classList.toggle ( ‘ShortcodeToggle — unfold ‘ ) ; \ ” \u003E\u003Cp class=\ ” ShortcodeToggle — label\ ” \u003ESee their advice\u003C\/p\u003E\u003C\/button\u003E\n \u003Cdiv class=\ ” ShortcodeToggle — contents-wrapper\ ” \u003E\n \u003Cdiv class=\ ” ShortcodeToggle — contents\ ” \u003E\n \u003C\/p\u003E\n\n\u003Ch4\u003EAre dismiss and\/or reinforce programs, such as accident forgiveness or safe drive discounts, more beneficial to attract new customers or to help maintain a stream, loyal consumer root ? \u003C\/h4\u003E\n\n\u003Cp\u003EWhile safe drive discounts ( like Progressive ‘s Snapshot program ) initially attracted a draw of newly customers, their shock on customer loyalty is last, at least for safe drivers. dependable drivers receive a substantial dismiss based on their observe drive habits ( using a telematics device ). But only their current insurance company \u2014 the one that monitored them \u2014 knows that they have such safe driving habits. typically, no early insurance company can offer a competitive price to these drivers, at least initially. If a consumer were to switch to another insurance company with a condom driving deduction, they would need to pay a higher monetary value at least until they have been monitored hanker adequate to verify that they indeed have safe drive habits. furthermore, many consumers dislike being monitored so closely. The consumer besides faces a risk that the following insurance company may not reach the lapp decision that the driver is sol dependable, and so the rebate may be smaller.\u003C\/p\u003E\n\n\u003Ch4\u003ESome car shoppers may be will to shell out more cash up front to purchase upgrade technology, with the anticipation that an policy discount will offset the splurge. At what point do discount rate programs become baffling for consumers ? \u003C\/h4\u003E\n\n\u003Cp\u003EThere are assorted policy monetary value estimators one can use when factoring policy costs into new car purchase decisions. however, one should be very careful. Some of the safest vehicles incorporate accident prevention technologies into the bumper and slope mirrors of vehicles. While these technologies help prevent and lessen the impact of severe accidents, they are expensive to repair. even a small accident can result in a boastfully bill for vehicles with advanced safety technologies, which consumers end up paying a fortune of through their deductible and higher premiums later on if they submit a claim.\u003C\/p\u003E\n\n\u003Cp\u003E\u003Cdiv class=\ ” ShortcodeAlign — root ShortcodeAlign — horizontal-center\ ” \u003E\n \u003Cdiv class=\ ” ShortcodeAlign — container\ ” \u003E \n \u003Cspan\u003E\u003Ca class=\ ” ShortcodeLink — root Button — root Button — chief Button — auto-width\ ” title=\ ” Back to all experts\ ” href=\ ” # expertadvice\ ” \u003EBack to all experts\u003C\/a\u003E\u003C\/span\u003E\n \u003C\/div\u003E\n\u003C\/div\u003E\n\u003C\/p\u003E\n\n\u003Cp\u003E\n \u003C\/div\u003E\n \u003C\/div\u003E\n\u003C\/div\u003E\n\n ”, ” padding ” : ” double ” }

Joy Lu

Assistant Professor of Marketing, Carnegie Mellon University

Discounts help companies learn about consumers’ behaviors. For instance, auto insurance companies provide discounts based on safe driving and grades. Are certain age groups more likely to trade their personal data for discounts?

When providing discounts based on safe driving and grades, rather than considering unlike old age groups, it may be helpful for policy companies to consider the types of consumers that they are attracting with these discounts. If the information on condom drive and grades is verifiable ( for example, by requiring a formal report card or transcript ), there might be a self-selection process where safe drivers and students with better grades are more likely to sign up with the company. however, a limitation is that if the information is not well verifiable or is easily faked, the caller may rather end up with an adverse survival problem where hazardous individuals sign up in club to take advantage of the discounts .

How might the perception of a good deal or discount, even if there is risk associated with it, impact someone’s buying decision? How does that compare with the perception of a low price with no discount?

citation prices are frequently a powerful driver of consumer decisions, so seeing a discount or some share off the standard price may be much more attractive to consumers compared to merely a depleted monetary value with no reference point. Another utilitarian strategy for policy companies hoping to outprice the rival is to advertise their lower prices aboard rival prices, again establishing a citation degree .
When it comes to products like car policy, people much don ’ deoxythymidine monophosphate shop around american samoa much as they should, and besides tend not to switch indemnity companies, careless of discounts or advertise from early companies. These frictions are much referred to as “ search costs ” and “ trade costs ” and can be quite high .
Elisabeth Honka, adjunct professor of marketing at UCLA, has done across-the-board inquiry on this subject and has found that search costs and switching costs are important barriers to customers improving their insurance plans. This makes it even more significant for policy companies to emphasize discounts to break down these barriers and make consumers aware of the potential savings .

Are discount and/or reward programs, such as accident forgiveness or safe driving discounts, more beneficial to attract new customers or to help maintain a current, loyal consumer base?

During the early stage of the policy leverage procedure, features of the program such as accident forgiveness or safe drive discounts may not be as top-of-mind to new customers as monetary value discounts or dislodge starting points in a reward course of study. rather, these features will probably be more effective in retaining existing customers, who are closer to directly experiencing these benefits. The one exception might be fresh customers who have recently been in an accident and are specifically looking for programs that provide these benefits .

A recent survey by ValuePenguin revealed that nearly 30% of women had never taken advantage of an auto insurance discount, compared to only 13% of men. Can you please elaborate on why you believe there may be a gap in those taking advantage of these types of loyalty programs?

One possibility for this sex gap is the difference in behavioral tendencies between men and women when it comes to negotiations. I would recommend an excellent book entitled “ Women Don ’ metric ton Ask ” by Linda Babcock, a colleague and professor of economics here at Carnegie Mellon. This bible delves into the many ways that women frequently find it heavily to ask for opportunities, yield raises, better deals, etc., compared to their male counterparts, ascribable to a diverseness of social forces and inequalities. You can easily see how this might extend to casual decisions such as asking for or taking advantage of an car insurance discount or loyalty program .

Some car shoppers may be willing to shell out more cash up front to purchase upgraded technology, with the anticipation that an insurance discount will offset the splurge. At what point do discount programs become problematic for consumers?

Let ’ s study, for model, a device that tracks how many miles you drive. The device may cost some come up front man for the customer to purchase, and if they drive more then they pay more for their policy, and if they drive less then they pay less. In this position, the customer is potentially at gamble of paying more if they drive more than anticipated, or not saving deoxyadenosine monophosphate much as they expected tied if they drive less, and consequently not making up for the monetary value of the initial device purchase. therefore, it is very significant for these types of discount programs to intelligibly represent the plan savings to the consumers and the costs versus benefits .
As these devices get more sophisticated, potentially relying upon complex algorithm to compute how “ safe ” a driver is and the policy rebate they have earned, transparency between the customer and firm become imperative mood, particularly since customers are often giving up more and more of their private data. In my own research on how to define estimable explanations for algorithm, my colleagues and I find that customer atonement for fiscal decisions such as credit circuit board or loan approvals can be sensible to factors such as the complexity of the algorithm and the individual ’ second own realized outcomes .
Back to all experts { “ backgroundColor ” : ” ice ”, ” content ” : ” \u003C\/p\u003E\n\n\u003Ch3 id=\ ” expert-joy-lu\ ” \u003EJoy Lu\u003C\/h3\u003E\n\n\u003Cp\u003EAssistant Professor of Marketing, Carnegie Mellon University\u003C\/p\u003E\n\n\u003Cp\u003E\u003Cdiv class=\ ” ShortcodeToggle — root ShortcodeToggle — article \ ” id=\u003E\n \u003Cbutton class=\ ” ShortcodeToggle — toggle\ ” onclick=\ ” this.parentNode.classList.toggle ( ‘ShortcodeToggle — open ‘ ) ; \ ” \u003E\u003Cp class=\ ” ShortcodeToggle — label\ ” \u003ESee their advice\u003C\/p\u003E\u003C\/button\u003E\n \u003Cdiv class=\ ” ShortcodeToggle — contents-wrapper\ ” \u003E\n \u003Cdiv class=\ ” ShortcodeToggle — contents\ ” \u003E\n \u003C\/p\u003E\n\n\u003Ch4\u003EDiscounts aid companies learn about consumers\u2019 behaviors. For example, car policy companies provide discounts based on safe drive and grades. Are certain age groups more likely to trade their personal data for discounts ? \u003C\/h4\u003E\n\n\u003Cp\u003EWhen providing discounts based on safe driving and grades, preferably than considering different age groups, it may be helpful for policy companies to consider the types of consumers that they are attracting with these discounts. If the information on safe drive and grades is verifiable ( for example, by requiring a ball report poster or transcript ), there might be a self-selection process where safe drivers and students with better grades are more probable to sign up with the party. however, a limit is that if the information is not easily verifiable or is easily faked, the company may alternatively end up with an adverse choice trouble where hazardous individuals sign up in order to take advantage of the discounts.\u003C\/p\u003E\n\n\u003Ch4\u003EHow might the perception of a good distribute or deduction, even if there is risk associated with it, impact person ‘s buy decision ? How does that compare with the sensing of a first gear price with no deduction ? \u003C\/h4\u003E\n\n\u003Cp\u003EReference prices are often a potent driver of consumer decisions, then seeing a discount or some percentage off the standard price may be much more attractive to consumers compared to merely a depleted price with no citation point. Another utilitarian strategy for insurance companies hoping to outprice the contest is to advertise their lower prices aboard rival prices, again establishing a reference book point.\u003C\/p\u003E\n\n\u003Cp\u003EWhen it comes to products like cable car insurance, people often don\u2019t shop around a much as they should, and besides tend not to switch insurance companies, careless of discounts or advertising from other companies. These frictions are frequently referred to as \ ” search costs\ ” and \ ” switching costs\ ” and can be quite high.\u003C\/p\u003E\n\n\u003Cp\u003EElisabeth Honka, assistant professor of market at UCLA, has done extensive research on this subject and has found that research costs and switching costs are important barriers to customers improving their policy plans. This makes it even more authoritative for insurance companies to emphasize discounts to break down these barriers and make consumers mindful of the potential savings.\u003C\/p\u003E\n\n\u003Ch4\u003EAre discount rate and\/or reward programs, such as accident forgiveness or dependable drive discounts, more beneficial to attract new customers or to help maintain a current, loyal consumer base ? \u003C\/h4\u003E\n\n\u003Cp\u003EDuring the early stage of the policy purchase process, features of the plan such as accident forgiveness or dependable drive discounts may not be as top-of-mind to new customers as price discounts or free starting points in a wages broadcast. alternatively, these features will probably be more effective in retaining existing customers, who are closer to directly experiencing these benefits. The one exception might be raw customers who have recently been in an accident and are specifically looking for programs that provide these benefits.\u003C\/p\u003E\n\n\u003Ch4\u003EA late review by ValuePenguin revealed that closely 30 % of women had never taken advantage of an car policy rebate, compared to only 13 % of men. Can you please elaborate on why you believe there may be a break in those taking advantage of these types of commitment programs ? \u003C\/h4\u003E\n\n\u003Cp\u003EOne possibility for this gender break is the remainder in behavioral tendencies between men and women when it comes to negotiations. I would recommend an excellent script entitled \ ” Women Don\u2019t Ask\ ” by Linda Babcock, a colleague and professor of economics here at Carnegie Mellon. This book delves into the many ways that women much find it hard to ask for opportunities, pay raises, better deals, etc., compared to their male counterparts, due to a variety of social forces and inequalities. You can well see how this might extend to everyday decisions such as asking for or taking advantage of an car insurance deduction or commitment program.\u003C\/p\u003E\n\n\u003Ch4\u003ESome car shoppers may be bequeath to shell out more cash up front man to purchase promote engineering, with the anticipation that an policy discount will offset the splurge. At what detail do dismiss programs become baffling for consumers ? \u003C\/h4\u003E\n\n\u003Cp\u003ELet\u2019s consider, for case, a device that tracks how many miles you drive. The device may cost some amount up front for the customer to purchase, and if they drive more then they pay more for their insurance, and if they drive less then they pay less. In this situation, the customer is potentially at risk of paying more if they drive more than anticipated, or not saving arsenic much as they expected even if they drive less, and consequently not making up for the price of the initial device purchase. therefore, it is very authoritative for these types of deduction programs to clearly represent the project savings to the consumers and the costs versus benefits.\u003C\/p\u003E\n\n\u003Cp\u003EAs these devices get more twist, potentially relying upon complex algorithm to compute how \ ” safe\ ” a driver is and the policy deduction they have earned, transparency between the customer and fast become imperative, particularly since customers are often giving up more and more of their individual data. In my own research on how to define good explanations for algorithm, my colleagues and I find that customer satisfaction for fiscal decisions such as credit card or loan approvals can be sensitive to factors such as the complexity of the algorithm and the individual\u2019s own realized outcomes.\u003C\/p\u003E\n\n\u003Cp\u003E\u003Cdiv class=\ ” ShortcodeAlign — root ShortcodeAlign — horizontal-center\ ” \u003E\n \u003Cdiv class=\ ” ShortcodeAlign — container\ ” \u003E \n \u003Cspan\u003E\u003Ca class=\ ” ShortcodeLink — root Button — root Button — primary Button — auto-width\ ” title=\ ” Back to all experts\ ” href=\ ” # expertadvice\ ” \u003EBack to all experts\u003C\/a\u003E\u003C\/span\u003E\n \u003C\/div\u003E\n\u003C\/div\u003E\n\u003C\/p\u003E\n\n\u003Cp\u003E\n \u003C\/div\u003E\n \u003C\/div\u003E\n\u003C\/div\u003E\n\n ”, ” padding ” : ” double ” }

Abhijit Roy

Professor of Marketing at the Kania School of Management, University of Scranton

Discounts help companies learn about consumers’ behaviors. For instance, auto insurance companies provide discounts based on safe driving and grades. Are certain age groups more likely to trade their personal data for discounts?

With rapid advancements in engineering, I ‘m afraid that usage-based policy ( or UBI ), may become more of the norm in the future five to 10 years .
safe drivers and those that do not drive a lot ( low mileages ) may be mechanically attracted to such schemes. Discount-prone customers across all long time groups will besides be attracted to such a policy. Across all age groups, younger individuals are more likely to trade their personal data for discounts, since they grew up in an earned run average where we have very fiddling privacy and are therefore more comfortable sharing personal information .

How might the perception of a good deal or discount, even if there is risk associated with it, impact someone’s buying decision? How does that compare with the perception of a low price with no discount?

This is based primarily on consumer personality. In retail, studies have demonstrated personality differences in preferences for EDLP ( everyday low pricing ) versus high-low ( conduct ) price. similarly, while buying car insurance, we might find similar differences. Younger customers are more probably to be deal prone ( versus a not-so-exciting option of moo price with no discount rate ) .

Are discount and/or reward programs, such as accident forgiveness or safe driving discounts, more beneficial to attract new customers or to help maintain a current, loyal consumer base?

They are obviously more beneficial to attract new customers, most of whom are comparison shop for the best deals and are probable to make decisions based on the benefits offered. however, once enticed, it is authoritative to maintain those discounts and/or reinforce programs ( rather of a “ tease and switch ” approach ) or risk losing their customers to competitors who might snag them with more lucrative deals .

A recent survey by ValuePenguin revealed that nearly 30% of women had never taken advantage of an auto insurance discount, compared to only 13% of men. Can you please elaborate on why you believe there may be a gap in those taking advantage of these types of loyalty programs?

A recent study found that men pay slenderly lower on modal ( $ 720 per class ) on car insurance compared to women, who pay $ 739 a class, on modal. These numbers do vary by senesce. Younger men ( below the long time of 25 ) pay much more than their female counterparts because of data showing riskier behavior by the erstwhile group. Older women, however, end up paying more than their male counterparts .
a far as taking advantage of car insurance discounts is considered, I am not surprised that about a third of women have never taken advantage of car policy discount, compared to just 13 % for men, primarily because they are socially conditioned not to ask. Recent research by Carnegie Mellon University Economics Professor Linda Babcock, co-author of the book Women Do n’t Ask, showed that women are four times less likely than men to ask for a raise, and when they do ask, they ask for 30 % less than men do .
There are at least seven states — California, Hawaii, Massachusetts, Michigan, Montana, North Carolina and Pennsylvania — that have laws in the books against discriminative car insurance pricing based on gender .

Some car shoppers may be willing to shell out more cash up front to purchase upgraded technology, with the anticipation that an insurance discount will offset the splurge. At what point do discount programs become problematic for consumers?

I would advise car insurance shoppers to be careful before using this upgrade engineering and agreeing to be monitored because of significant privacy concerns. Drivers should comprehend the risks, since the policy company will have information on your whereabouts, how you drive, what you ‘re interested in, where you live and who you ‘re associating with. The information is besides probably to be sold to other third parties without the individual ‘s cognition. There is besides the danger of data breach, which may give this data to miscreants .
For those will to overlook these risks, it is important to know what precisely will be tracked by the UBI course of study. Will it be just braking, idling and acceleration, or will it besides track mileage and monitor force quality .
however, UBI methods appear to be gaining traction. A late J.D. Power learn indicated that closely 12 % of car insurance customers used such programs, and that nine of the clear 10 largest passenger car insurers have UBI programs in place .
Back to all experts { “ backgroundColor ” : ” ice ”, ” content ” : ” \u003C\/p\u003E\n\n\u003Ch3 id=\ ” expert-abhijit-roy\ ” \u003EAbhijit Roy\u003C\/h3\u003E\n\n\u003Cp\u003EProfessor of Marketing at the Kania School of Management, University of Scranton\u003C\/p\u003E\n\n\u003Cp\u003E\u003Cdiv class=\ ” ShortcodeToggle — beginning ShortcodeToggle — article \ ” id=\u003E\n \u003Cbutton class=\ ” ShortcodeToggle — toggle\ ” onclick=\ ” this.parentNode.classList.toggle ( ‘ShortcodeToggle — loose ‘ ) ; \ ” \u003E\u003Cp class=\ ” ShortcodeToggle — label\ ” \u003ESee their advice\u003C\/p\u003E\u003C\/button\u003E\n \u003Cdiv class=\ ” ShortcodeToggle — contents-wrapper\ ” \u003E\n \u003Cdiv class=\ ” ShortcodeToggle — contents\ ” \u003E\n \u003C\/p\u003E\n\n\u003Ch4\u003EDiscounts assistant companies learn about consumers\u2019 behaviors. For exemplify, car policy companies provide discounts based on safe drive and grades. Are sealed long time groups more likely to trade their personal data for discounts ? \u003C\/h4\u003E\n\n\u003Cp\u003EWith rapid advancements in technology, I ‘m afraid that usage-based policy ( or UBI ), may become more of the norm in the following five to 10 years.\u003C\/p\u003E\n\n\u003Cp\u003ESafe drivers and those that do not drive a fortune ( low mileages ) may be automatically attracted to such schemes. Discount-prone customers across all historic period groups will besides be attracted to such a policy. Across all old age groups, younger individuals are more likely to trade their personal data for discounts, since they grew up in an era where we have very small privacy and are hence more comfortable sharing personal information.\u003C\/p\u003E\n\n\u003Ch4\u003EHow might the sensing of a adept deal or deduction, even if there is hazard associated with it, impact person ‘s buy decision ? How does that compare with the sensing of a low price with no rebate ? \u003C\/h4\u003E\n\n\u003Cp\u003EThis is based chiefly on consumer personality. In retail, studies have demonstrated personality differences in preferences for EDLP ( everyday gloomy price ) versus high-low ( deal ) pricing. similarly, while buying car policy, we might find similar differences. Younger customers are more probable to be conduct prone ( versus a not-so-exciting choice of low price with no discount ) .\u003C\/p\u003E\n\n\u003Ch4\u003EAre deduction and\/or reward programs, such as accident forgiveness or safe drive discounts, more beneficial to attract new customers or to help maintain a stream, patriotic consumer base ? \u003C\/h4\u003E\n\n\u003Cp\u003EThey are obviously more beneficial to attract newly customers, most of whom are comparison patronize for the best deals and are likely to make decisions based on the benefits offered. however, once enticed, it is crucial to maintain those discounts and\/or reward programs ( rather of a \ ” bait and switch\ ” approach ) or risk losing their customers to competitors who might snag them with more lucrative deals.\u003C\/p\u003E\n\n\u003Ch4\u003EA late survey by ValuePenguin revealed that closely 30 % of women had never taken advantage of an car policy rebate, compared to only 13 % of men. Can you please elaborate on why you believe there may be a break in those taking advantage of these types of loyalty programs ? \u003C\/h4\u003E\n\n\u003Cp\u003EA holocene study found that men pay slightly lower on average ( $ 720 per class ) on car indemnity compared to women, who pay $ 739 a year, on average. These numbers do change by age. Younger men ( below the old age of 25 ) pay a lot more than their female counterparts because of data showing riskier behavior by the former group. Older women, however, end up paying more than their male counterparts.\u003C\/p\u003E\n\n\u003Cp\u003EAs far as taking advantage of car indemnity discounts is considered, I am not surprised that about a third base of women have never taken advantage of car policy rebate, compared to precisely 13 % for men, chiefly because they are socially conditioned not to ask. Recent research by Carnegie Mellon University Economics Professor Linda Babcock, co-author of the book Women Do n’t Ask, showed that women are four times less likely than men to ask for a raise, and when they do ask, they ask for 30 % less than men do.\u003C\/p\u003E\n\n\u003Cp\u003EThere are at least seven states \u2014 California, Hawaii, Massachusetts, Michigan, Montana, North Carolina and Pennsylvania \u2014 that have laws in the books against discriminatory car policy price based on gender.\u003C\/p\u003E\n\n\u003Ch4\u003ESome car shoppers may be will to shell out more cash up battlefront to purchase upgrade engineering, with the anticipation that an indemnity discount will offset the orgy. At what distributor point do discount rate programs become debatable for consumers ? \u003C\/h4\u003E\n\n\u003Cp\u003EI would advise car indemnity shoppers to be careful before using this upgrade technology and agreeing to be monitored because of significant privacy concerns. Drivers should comprehend the risks, since the indemnity company will have information on your whereabouts, how you drive, what you ‘re interested in, where you live and who you ‘re associating with. The information is besides likely to be sold to early third parties without the individual ‘s cognition. There is besides the risk of data gap, which may give this datum to miscreants.\u003C\/p\u003E\n\n\u003Cp\u003EFor those will to overlook these risks, it is important to know what precisely will be tracked by the UBI program. Will it be barely braking, idling and acceleration, or will it besides track mileage and monitor repel quality.\u003C\/p\u003E\n\n\u003Cp\u003EHowever, UBI methods appear to be gaining grip. A recent J.D. Power discipline indicated that about 12 % of car indemnity customers used such programs, and that nine of the top 10 largest passenger car insurers have UBI programs in place.\u003C\/p\u003E\n\n\u003Cp\u003E\u003Cdiv class=\ ” ShortcodeAlign — root ShortcodeAlign — horizontal-center\ ” \u003E\n \u003Cdiv class=\ ” ShortcodeAlign — container\ ” \u003E \n \u003Cspan\u003E\u003Ca class=\ ” ShortcodeLink — root Button — root Button — primary coil Button — auto-width\ ” title=\ ” Back to all experts\ ” href=\ ” # expertadvice\ ” \u003EBack to all experts\u003C\/a\u003E\u003C\/span\u003E\n \u003C\/div\u003E\n\u003C\/div\u003E\n\u003C\/p\u003E\n\n\u003Cp\u003E\n \u003C\/div\u003E\n \u003C\/div\u003E\n\u003C\/div\u003E\n\n ”, ” padding ” : ” double ” }

Ryan McCann

assistant Professor, Division of Math and Science, Columbia-Greene Community College, the State University of New York

How might the perception of a good deal or discount, even if there is risk associated with it, impact someone’s buying decision? How does that compare with the perception of a low price with no discount?

I might suggest that the percept of a commodity cope or discount might be more alluring to consumers than just a low price. I find myself more clear to exploring a possible purchase when some sort of advantage is advertised .

Some car shoppers may be willing to shell out more cash up front to purchase upgraded technology, with the anticipation that an insurance discount will offset the splurge. At what point do discount programs become problematic for consumers?

deduction programs can become debatable when they are excessively complicated and may have strings attached that are not in full understood. A parallel exercise might be the adjustable-rate mortgage, which caused many to secure loans that had low payments at first, unaware of balloon payments and higher interest rates that could lead to foreclosure ( which sadly was the case for many ) .
Back to all experts { “ backgroundColor ” : ” ice ”, ” capacity ” : ” \u003C\/p\u003E\n\n\u003Ch3 id=\ ” expert-ryan-mccann\ ” \u003ERyan McCann\u003C\/h3\u003E\n\n\u003Cp\u003EAssistant Professor, Division of Math and Science, Columbia-Greene Community College, the State University of New York\u003C\/p\u003E\n\n\u003Cp\u003E\u003Cdiv class=\ ” ShortcodeToggle — beginning ShortcodeToggle — article \ ” id=\u003E\n \u003Cbutton class=\ ” ShortcodeToggle — toggle\ ” onclick=\ ” this.parentNode.classList.toggle ( ‘ShortcodeToggle — exposed ‘ ) ; \ ” \u003E\u003Cp class=\ ” ShortcodeToggle — label\ ” \u003ESee their advice\u003C\/p\u003E\u003C\/button\u003E\n \u003Cdiv class=\ ” ShortcodeToggle — contents-wrapper\ ” \u003E\n \u003Cdiv class=\ ” ShortcodeToggle — contents\ ” \u003E\n \u003C\/p\u003E\n\n\u003Ch4\u003EHow might the sensing of a good deal or discount rate, even if there is risk associated with it, impact person ‘s buy decision ? How does that compare with the perception of a humble price with no discount ? \u003C\/h4\u003E\n\n\u003Cp\u003EI might suggest that the perception of a good consider or dismiss might be more entice to consumers than equitable a low price. I find myself more receptive to exploring a possible purchase when some screen of advantage is advertised.\u003C\/p\u003E\n\n\u003Ch4\u003ESome car shoppers may be will to shell out more cash up front to purchase upgrade engineering, with the anticipation that an indemnity deduction will offset the orgy. At what orient do deduction programs become debatable for consumers ? \u003C\/h4\u003E\n\n\u003Cp\u003EDiscount programs can become debatable when they are excessively complicated and may have strings attached that are not fully silent. A parallel exercise might be the adjustable-rate mortgage, which caused many to secure loans that had low payments at first, unaware of balloon payments and higher interest rates that could lead to foreclosure ( which sadly was the case for many ) .\u003C\/p\u003E\n\n\u003Cp\u003E\u003Cdiv class=\ ” ShortcodeAlign — root ShortcodeAlign — horizontal-center\ ” \u003E\n \u003Cdiv class=\ ” ShortcodeAlign — container\ ” \u003E \n \u003Cspan\u003E\u003Ca class=\ ” ShortcodeLink — root Button — root Button — primary Button — auto-width\ ” title=\ ” Back to all experts\ ” href=\ ” # expertadvice\ ” \u003EBack to all experts\u003C\/a\u003E\u003C\/span\u003E\n \u003C\/div\u003E\n\u003C\/div\u003E\n\u003C\/p\u003E\n\n\u003Cp\u003E\n \u003C\/div\u003E\n \u003C\/div\u003E\n\u003C\/div\u003E\n\n ”, ” padding ” : ” double ” }

Leave a Reply

Your email address will not be published. Required fields are marked *