Does a second car affect auto insurance rates?

Does a second car affect auto insurance rates? People with more than one car often want to know the cost of adding a second vehicle to insurance. 

Generally, the cost of adding a second car to an insurance policy will be less than having two separate policies, as insurance companies offer auto insurance discounts for adding multiple vehicles to your car insurance.  However, there may be times when it is more advantageous to purchase a separate policy. We will go over when drivers should insure cars separately, when it is cheapest to add a car to an existing policy, adding a second car to your insurance, and more.

If you want to start shopping for affordable multi-car insurance today, use our free quote comparison tool.  

Deciding Between Adding a Second Car to Insurance or Buying a Separate Policy 

Is it cheaper to add a second car to your insurance? Adding a second car to an existing policy is generally the cheapest option. This is because insurance companies offer discounts on the car insurance cost when policyholders add a second car to their insurance policy. The exception will be if a driver of one of the cars has an extremely poor driving record, in which case it is sometimes better for them to purchase a separate policy. 

For the most part, however, adding a second car to a policy is always the cheapest option. Sometimes, though, you won’t be able to add the second vehicle to your insurance policy, which we’ve outlined in the next section. 

Read more: How to Get a New Car Auto Insurance Discount 

When Drivers Can’t Add a Second Car 

There are a number of situations when drivers can’t add a second car to their existing car insurance policy. These situations are as follows: 

• The second car isn’t owned by a household member. You can only add a second car if it is owned by you or someone else who lives at the same address as you, such as a spouse or roommate. 

• The second car is used for business or is a commercial vehicle. You will have to buy a separate commercial car insurance policy if you use your second car for work or if it is a commercial vehicle. 
• Your second car is a classic car. If your second car is a collector or classic car, you will need to buy a separate classic car insurance policy for it. 

In these cases, it is best to purchase a separate policy for your second car rather than trying to add it to your current auto insurance policy. 

Multi-Car Discounts When Adding a Second Car 

The reason adding a second car to a policy is cheaper than buying a separate policy is the multi-car discount that companies offer. Discover the ultimate guide on how to get a multi-vehicle auto insurance discount, encompassing all the essential information you need to know.

Multi-Car Discount Requirements 

Insurance companies do have requirements when it comes to which cars you can add to a policy. Generally, the car must meet the following requirements to be added to an existing policy for the discount. 

• Cars are parked at the same address. 
• Cars are private passenger cars. 
• Cars have the same liability insurance. 

If you drive your car for work or the car isn’t parked at your address, you can’t add it to your insurance policy. 

What if the second vehicle isn’t a car? 

If the second vehicle you want to insure isn’t a car, this doesn’t mean you can’t still get a discount. Most insurance companies offer bundling discounts when you purchase more than one type of insurance from them. For example, you could purchase boat and auto insurance from the same company for a discount. 

Companies that Offer Multi-Car Discounts 

Most companies offer a multi-car discount, but the amount saved isn’t always the same. You can search multi-car discounts by company to see how much it is to add a second car to insurance policies with different companies.  

Bear in mind that while some insurance companies offer a higher discount, you should also consider what the overall price of a policy is to start with. More expensive companies may offer a higher discount, but you may find better savings with a cheaper company with a lower discount. 

Multi-Car Insurance Policies 

If you are ready to add a second car to your insurance policy, you’re probably wondering how to get auto insurance for a second car, and if there is a better company than your current company for multi-policy discounts. 

Multi-car policies work the same as single-car insurance policies. The insurance company will want the same information about your second car that the company wanted for the first, such as the make, model, and who will be driving it. Some insurance coverages will apply to all cars on your policy, while other coverages you can choose which cars they apply to. 

For example, coverages that are required by the state, such as liability auto insurance or personal injury protection (PIP) auto insurance, will have to be purchased for every car. Optional add-on coverages, such as comprehensive insurance or collision insurance, can be added to one or all of the cars. 

How do I add a second car? 

To add a second car to your insurance policy, you will need to contact your insurance company. You may be able to add the second car online, or you may need to call your insurance company. 

You will need all the relevant information about your second vehicle when adding a second vehicle to insurance, such as the car’s make, model, year, vehicle identification number (VIN), and license plate number. You will also need your car insurance policy number and the information of any drivers who will be driving the car. Generally, adding a second car to your insurance policy is quick and easy, and the multi-car discount will automatically be applied. 

What is the best company for multi-car policies? 

The best, cheapest company for a multi-car policy will depend upon the driver’s driving record and area. However, the following car insurance companies generally offer the cheapest rates for multi-car policies. 

So how much does adding a second car to insurance cost at different companies? Geico generally has some of the cheapest rates for drivers, whereas Allstate is one of the more expensive companies for multi-car policies.

Cost of Adding a Second Car to Insurance

Adding a second car to an existing insurance policy usually results in an increase in your total premium. However, this increase is often mitigated by multi-car discounts that can significantly lower the cost compared to insuring two vehicles on separate policies. The actual cost to add a second car can vary depending on the make and model of the vehicle, its age, the coverage options you select, and the insurance company’s pricing structure. On average, you might see a rate increase of 10% to 25% for each additional vehicle, but this can often be offset by a discount of up to 25% for multiple vehicles.

Comparison of Adding a Second Car: Major Insurance Providers

• Geico: Geico is known for offering competitive multi-car discounts. Customers might see discounts of up to 25%, making it more cost-effective to add a second car to an existing policy rather than getting a separate policy.
• Progressive: Like Geico, Progressive offers substantial discounts for multi-car policies. The cost effectiveness will depend on factors like the vehicles’ safety features, age, and the drivers’ records.

These examples highlight that while the specific savings can vary, major insurers generally provide incentives to encourage customers to insure multiple vehicles under one policy.

Benefits of Multi-Car Policies

Insuring multiple cars under one policy is typically more cost-effective due to multi-car discounts. Insurers provide these discounts as they recognize the reduced administrative costs and the aggregated risk of insuring multiple vehicles at one address. Policyholders benefit not only from reduced rates but also from simplified insurance management, as there is only one renewal date and one policy to manage. The more cars you add, the higher your discount percentage can be, up to a certain limit.

How to Add a Second Car to Your Insurance

Adding a second car to your insurance policy is generally straightforward:

1. Gather Vehicle Information: You’ll need the make, model, year, and VIN of the second car.
2. Contact Your Insurance Provider: You can add the car through your insurer’s online portal or by contacting customer service directly. Have your policy number handy for quicker service.
3. Adjust Coverage as Needed: Decide if you want the same coverage levels as your first vehicle or if different coverage is appropriate.
4. Verify Discounts: Ensure that any applicable multi-car discounts are applied to your policy.
5. Review and Confirm: Review all changes and confirm the new policy terms and premium.

Insurance Cost Considerations for Multiple Cars

The addition of a second car to a policy often means reassessing your coverage needs and potential risk exposure. Insurance premiums are calculated based on the likelihood of a claim being made. With each additional vehicle, while the risk of any one car being involved in an accident doesn’t necessarily double, the overall risk across the policy increases. However, the cost increase is typically not proportional thanks to multi-car discounts. Additionally, factors such as whether the vehicles are primarily used for commuting or just weekend drives can affect premiums.

The Final Word on Adding a Second Car 

Adding a second car to an existing insurance policy is usually the cheapest option for most drivers, as insurance companies offer discounts if drivers insure more than one car with the company. However, rates can vary based on the insurance company, and only some cars can be added as a second vehicle. 

If you want to start getting quotes right away for multi-car insurance policies, use our free quote comparison tool to find the best rates in your area.