It is common to have two cars in homes, especially if both husband and wife work. But is it cheaper to add a second car to your insurance plan? In this article, we’ll explain which option saves you more money: adding a second car to an existing insurance policy or starting a new policy altogether.
If you’re curious about car insurance rates in your area, enter your zip code in the box below to receive a free quote.
Is it cheaper to add a second car to your insurance or get a separate policy?
Since homes with multiple vehicles are common, many insurance providers offer multi-car discounts with savings of up to 25%. In fact, these discounts are usually part of an insurance company’s strategy to attract and retain customers. It will almost always be cheaper to insure the car when it is added to an existing policy.
However, be aware that the premium for the second vehicle may be affected by the driving record of the primary driver. Your insurance premiums will increase, but a multi-car policy will almost always save money compared to buying two separate policies, leading to cheaper auto insurance.
When you insure multiple vehicles, the same policy will be used for each car when filing an insurance claim. Cars also share a deductible.
When you shouldn’t add another car to your policy
Before you rush to call your insurance agent, there are a few other points to consider. There may be situations when you should not add a second car to your insurance policy but give each vehicle its own policy.
The second car is not owned by any member of your family
The most obvious reason to maintain separate policies is when the new car does not belong to regular members of your household. While renters or an extended houseguest can park their car in your driveway or garage, there is no reason to include them in your auto insurance policy unless they plan to become a permanent resident.
You need different types of insurance
Some auto insurance companies require that you maintain the same insurance policy and coverage for all vehicles on the policy. If you have a new car and an old clunker in your garage, there is no point in paying for comprehensive coverage or collision coverage for both vehicles. This is especially true if one vehicle is used less frequently than the other.
Contact your insurance provider to find out your options. Today’s top providers will often require similar liability coverage for both vehicles, but they can be more flexible when it comes to other types of insurance.
commercial and company vehicles
If you use a different car for business, this vehicle usually will not qualify for the multi-car exemption. Auto insurance companies usually offer these discounts for personal passenger vehicles, which requires separate policies for commercial and company cars.
classic collector car
If one of your vehicles is a collectible or classic car, you will probably need a unique policy.
Multi-Car Discount Requirements
For most drivers, insuring two vehicles on the same insurance policy is a great way to save money and avoid paying separate policy premiums. If you want to get discounts on more than one car, here are some things you need to know.
Requirements for a multi-car discount
Most insurance companies have certain requirements that you must meet before adding a new vehicle to your policy. This includes:
- Vehicles must be parked primarily in the same house
- Vehicles must be private passenger vehicles
- Vehicles must have similar liability insurance (covers the cost of bodily injury and property damage to others when you cause an accident)
This means that if your second car is a commercial or company vehicle, you may not be eligible for the multi-car discount.
Discounts for other vehicle types
What if your other car is not a car? Some insurance companies offer multi-vehicle discounts or bundling options for drivers who also own a motorcycle, RV, or other type of vehicle.
Companies Offering Multi-Car Discounts
How cheap your insurance with multi-car discounts will usually depend on your specific car and policy. The following table shows the discounts offered by today’s top providers:
Note that this table is for reference purposes only. Check with your insurance provider about any other discounts it may offer for a multi-car insurance policy.
Our recommendations for auto insurance
If you’re looking for auto insurance providers, we’ve reviewed today’s top companies to find the best options. Note that all of these insurance companies offer multi-car discounts, and you may be eligible for other discounts and promotions as well.
By entering your zip code below, you can get free car insurance quotes from top providers in your area. You can use this data to compare auto insurance rates and pinpoint the company that is right for the cars in your home.
GEICO: Overall Best
GEICO offers 25% multi-car discount to its customers. We named the insurer as the nation’s best car insurance provider overall in our industry review, giving it a score of 9.1 out of 10.0 with 9.0 in each category of coverage, cost, and customer service.
The multi-car discount is one of several GEICO discounts that make it cheaper to insure your vehicles. The company also offers insurance options such as usage-based insurance, rideshare insurance for Uber, Lyft, or food delivery drivers, and mechanical breakdown insurance.
USAA: Best Military Provider
USAA provides insurance policies to members of the military and their immediate families. If you’re eligible for one of its policies, check with a local agent about a multi-car discount. In a previous review, we awarded USAA an 8.9 out of a total of 10.0, an 8.5 for coverage options and a 9.0 for cost, customer service, and its reputation in the insurance industry.
State Farm: Best Student Discount
State Farm is already known for offering discounts for students as well as safe driver incentive programs for those with a clean driving history. But State Farms also offers customers a 20% multi-car discount, so families with more than one vehicle can take full advantage of these financial benefits.
Our experts rated State Farms 8.5 out of 10.0 for overall performance, noting its strong reputation along with superior customer service. Because the company offers discounts to students as well as multi-car families, it can be an excellent option for families who need auto insurance when they are 17 or younger.
The Detroit Bureau aggregates data from each of the major car insurance providers to generate a ranking of the best insurers. Our in-depth rating system takes into account market share, coverage, pricing, customer satisfaction and ratings from industry experts. Each insurer is given a weighted score in four categories, along with an overall score out of 10.0.
We recommend auto insurance companies based on these rankings, but we also encourage you to do your research and compare quotes to find the best coverage.