It’s common for households to have two cars, especially if both spouses 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 free quotes.
Is It Cheaper to Add a Second Car to Your Insurance or to Take Out a Separate Policy?
Because households with multiple vehicles are common, many insurance providers offer multi-car discounts with savings of up to 25%. In fact, these discounts are typically part of an insurance company’s strategy for attracting and retaining customers. It will almost always be cheaper to insure a car when it’s added to an existing policy.
Be aware, however, that the premiums for the second vehicle may be affected by the driving record of the primary driver. Your insurance premiums will increase, but a multiple-car policy will almost always save money compared to buying two separate policies, leading to cheap auto insurance.
When you insure multiple vehicles, the same policy will be used for each car when you file an insurance claim. The cars share one deductible as well.
When You Shouldn’t Add a Second Car to Your Policy
Before you rush off to call your insurance agent, a few other points must be considered. There may be circumstances when you should not add a second car to your insurance policy but instead give each vehicle its own policy.
The Other Car Isn’t Owned by a Member of Your Household
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 may park their car in your driveway or garage, there’s no reason to include them into 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 that are on a policy. If your garage contains a new car and an old clunker, it doesn’t make sense to pay for comprehensive coverage or collision coverage for both vehicles. This is especially true if one vehicle is used less often than the other.
Check with your insurance provider to explore your options. Today’s top providers will often require both vehicles to have the same amount of liability coverage, but they may be more flexible when it comes to other types of insurance.
Commercial and Company Vehicles
If you use a separate car for business, this vehicle is typically not going to be eligible for a multi-car discount. Auto insurance companies usually offer these discounts for private passenger vehicles, requiring separate policies for commercial and company cars.
Classic Collector Car
If one of your vehicles is a collectible or classic car, you will likely 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 stop paying for separate policy premiums. If you’d like to pursue a multi-car discount, here are a few things you should know.
Requirements for a Multi-Car Discount
Most insurance companies have a few requirements you must meet before you add a new vehicle to your policy. These include:
- Vehicles must be primarily parked at the same household
- Vehicles must be private passenger vehicles
- Vehicles must have the same liability insurance (covers bodily injury and property damage costs for others when you cause an accident)
That means that if your second car is a commercial or company vehicle, you may not be eligible for a multi-car discount.
Discounts for Other Vehicle Types
What if your second car isn’t a car at all? Some insurance companies offer a multi-vehicle discount or bundling options for drivers who also own a motorcycle, RV or other type of vehicle.
Companies That Offer Multi-Car Discounts
How much cheaper multi-car discounts will make your insurance usually depends on your specific car and policy. The following table shows the discounts offered by today’s top providers:
| Company | Discount % |
|---|---|
| GEICO | 25% |
| Nationwide | 20% |
| Progressive | 10% |
| State Farm | 20% |
| Liberty Mutual | 10% |
| USAA | Varies |
Be advised that this table is meant for reference purposes. 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 very best options. Note that these insurance companies all offer multi-car discounts, and you may be eligible for other discounts and promotions as well.
By entering your ZIP code below, you can receive free car insurance quotes from the top providers in your area. You can use this data to compare auto insurance rates and pinpoint the company that’s right for the cars in your household.
GEICO: Best Overall
GEICO provides its customers with a 25% multi-car discount. We named the insurer as the country’s best car insurance provider overall in our industry review, giving it a score of 9.1 out of 10.0, with a 9.0 in each of the categories of coverage, cost and customer service.
The multi-car discount is just one of many GEICO discounts that make your vehicles cheaper to insure. 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 10.0 overall, with 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 Discounts
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 Farm 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 gave State Farm a rating of 8.5 out of 10.0 for overall performance, noting its superior customer service as well as its strong reputation. Because the company offers discounts to students as well as multi-car families, this might be an excellent option for households with someone who needs auto insurance at 17 or below.
Methodology
The Detroit Bureau collects data from every major car insurance provider to formulate rankings 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, as well as an overall score out of 10.0.
We recommend auto insurance companies based on these rankings, but we also encourage you to perform your own research and compare quotes to find the best coverage.
