Three Car Insurance: How can I save on my auto insurance with three vehicles?

How you can save on your auto insurance if you own three or more vehicles

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Rachel Bodine graduated from college with a BA in English. She has since worked as a Feature Writer in the insurance industry and gained a deep knowledge of state and countrywide insurance laws and rates. Her research and writing focus on helping readers understand their insurance coverage and how to find savings. Her expert advice on insurance has been featured on sites like PhotoEnforced, All...

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Written by Rachel Bodine
Feature Writer Rachel Bodine

Dan Walker graduated with a BS in Administrative Management in 2005 and has been working in his family’s insurance agency, FCI Agency, for 15 years (BBB A+). He is licensed as an agent to write property and casualty insurance, including home, auto, umbrella, and dwelling fire insurance. He’s also been featured on sites like Reviews.com and Safeco. He reviews content, ensuring that ex...

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Reviewed by Daniel Walker
Licensed Auto Insurance Agent Daniel Walker

UPDATED: Jun 10, 2022

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Things to remember...

  • Bundling multiple vehicles under one policy can result in discounted rates
  • Bundling three or more drivers may also qualify for a discount
  • You don’t have to have three drivers to qualify

It can be hard to fit a third car into the budget, especially for families with children who are attending school, so you may be wondering, ‘How can I save money on my auto insurance?’

When you buy car insurance for multiple vehicles, many insurance companies will allow you to bundle them under one policy for a discounted rate. You can also bundle three or more drivers, although families with only two drivers can still qualify for a three-car discount.  

How does bundling multiple vehicles save money?

For the last few years, the number of households that have three or more cars has been holding steady at about 20%. Bundling multiple vehicles under one policy can result in discounts ranging from 10-25%, depending on the provider. However, there are certain conditions that apply, and understanding how the insurance company works will help you see where you can qualify for savings.

Insurance companies consider what is called your “risk-to-reward ratio” when selling you a policy. The higher the risk, the lower the reward, which means higher rates. While you purchase insurance for each vehicle, what you’re really insuring are the drivers. So the rates are based on the demographics of each driver. Teen drivers pay the highest rates, but other factors, such as male or female and single or married also play a role. So what you want to do is lower your risk as a customer and one of the ways to do this is to bundle multiple cars and multiple drivers under one policy.

The following are some scenarios you can ask your insurance company about:

Three Cars, Three Drivers

Having three cars to insure, driven by three different drivers, allows you to combine them all under a single policy with most insurance providers. There may be certain conditions, and the rates will be calculated based on driver demographics, so you’ll want to explore your options and shop around.

Insurance companies consider teen drivers to be a higher risk, and this is understandable given that teen drivers are three times more likely to be involved in a fatal car crash than adult drivers. So if one of the drivers is a teen, you can expect the rates to go up, but bundling them with their parents on the same policy may at least get you a discount. They can stay on their parents’ policy until they’re 21—and even longer if they are a student.

Three Cars, Two Drivers

Married couples with no children may have three or more vehicles, but wonder if they can get multi-car discounts since there are only two drivers. The answer is yes, there are companies that will offer a discount, but the rates for the third car will be calculated based on year, make, and model. When bundling three vehicles with two drivers, the rates will be charged by driver demographics for the two drivers, and then vehicle details for the third car. The same principle would apply to a single driver with multiple vehicles, although that scenario is a lot less common.

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Tips for Keeping Rates Down

Understanding the risk-to-reward ratio is key to finding ways to save on insurance rates. Here are some tips that essentially lower your risk and may qualify you for a discount:

Bundle

Bundling under one policy lowers the risk for the insurance company and so they often offer insurance group discounts as an incentive. One policy almost always results in lower rates than multiple policies. Some companies also offer discounts for bundling other types of insurance, such as home or life insurance.

Match the Car to the Driver

Basically, assign the newest car to the lowest-risk driver. If your third driver is a teen, you can rightly expect to pay higher rates, but assigning the teen as the driver of the less expensive vehicle would also reduce the company’s risk and probably shave a little off your total. If a car is added to a policy without a driver to assign to it, make sure it’s not the most expensive make and model of the three.

For an idea of what you might pay for each driver, compare the average annual rates based on driver demographics.

National Average Auto Insurance Rates by Driver Marital Status, Age, & Gender
Driver Marital Status,
Age, & Gender
Average Annual
Auto Insurance Rates
Married 60-year-old female$2,243.26
Married 60-year-old male$2,307.79
Married 35-year-old male$2,445.85
Married 35-year-old female$2,449.06
Single 25-year-old female$2,703.28
Single 25-year-old male$2,889.27
Single 17-year-old female$7,559.03
Single 17-year-old male$9,027.64
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How can I save money on my auto insurance? 

When shopping, find out what discounts are available for bundling three or more cars under one policy. Also, consider which driver to assign to each vehicle, as that affects the risk factor for the insurance company. Thorough research and a comparison of what insurance providers offer will help you to make the choice that’s right for your family. 

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