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Is it cheaper to add a second car to insurance?

Things to Remember

  • Most major auto insurance companies offer a multi-car discount to policyholders, with savings of up to 25 percent.
  • A multi-car discount is a deduction from the usual cost of your premiums for owning more than one vehicle and insuring at least two of these vehicles with the same insurer.
  • When you have an existing one-car policy and add a newly acquired vehicle to it, the premiums for each vehicle can go down.

Auto insurance is an expenditure you can’t avoid when you own a car. Many families have more than one vehicle to insure. But is it cheaper to add a second car to insurance or should you purchase another auto policy? It is always cheaper to put all vehicles you own under the same auto insurance policy.  

What is the auto insurance average for monthly costs for a single-vehicle policy? Most people pay around $86 per month; however, adding a second vehicle to your pre-existing auto insurance policy can provide you with a discounted rate of up to 25 percent. 

There are many different discounts that you can qualify for when you buy insurance, but one of the most common is the multi-car discount. If you and your family own more than one vehicle that’s in the same household, you may be eligible for this premium deduction.

Ready to secure an affordable auto insurance policy for your second vehicle? Simply enter your five-digit ZIP code into our FREE quote tool above to receive multi-car auto insurance rates. 

Table of Contents

Is it cheaper to put two cars on a single auto insurance policy?

It is almost always cheaper to put a second vehicle on a pre-existing policy. Insurance providers want your business. As a reward for being loyal to the company, you’ll receive heavily discounted rates.  

In the table below, see what major providers offer multi-car auto insurance discounts. If specifics about the savings rate is available, that data has been included. 

Multi-Car Discounts Available by Auto Insurance Company
CompaniesMulti-Car Discount Offered
21st CenturyYes
American FamilyYes
AmicaYes - 15%
Country FinancialYes - 15%
GEICOYes - 25%
Liberty MutualYes - 10%
NationwideYes - 20%
ProgressiveYes - 10%
Safe AutoYes - 15%
SafecoYes - 15%
State FarmYes - 20%
The GeneralYes - 15%
The HanoverYes - 5%
The HartfordYes - 5%
TravelersYes - 8%
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As you can see, most major providers will reward you with hefty discounts when you add another vehicle to your existing policy. 

In fact, most companies allow you to insure up to five vehicles per policy. The more vehicles listed, the bigger your discount gets. 

Why is it cheaper to insure a second car under a single policy?

There are two major reasons why adding a second car to your auto insurance policy is cheaper than purchasing two distinct policies. The first we already touched upon; auto insurance companies want as much of your business as they can get. 

To entice consumers to give the company more business, many providers offer multi-car discounts and other savings opportunities. This is the second major reason why insuring two vehicles under one policy is cheaper. 

Applying discounts to your policy is part of the rating process that personalizes your premiums. When you own more than one car and you add a second vehicle to your insurance policy, a multi-car discount is often automatically applied.

By giving their clients a discount on an already existing policy, the insurer can sell you more insurance and you can enjoy the added convenience. 

When should I not add a second car to my auto insurance policy?

There are very few reasons why you might choose to not add your second vehicle to your pre-existing auto insurance policy. In some rare cases, it might be cheaper to insure two vehicles separately. 

You can easily determine this by comparison shopping for your two different vehicles using an online comparison tool, like what we feature on this page. 

If you’re trying to insure a classic or collectible car, you might need to use a specific insurance agency to fully protect your vehicle. Some major providers might not offer the right kind of policy protections for this type of vehicle. 

How to Add a Second Car to Your Auto Insurance Policy

Adding a vehicle to an existing insurance policy is relatively easy. Contact your local agent and inform them you’d like to make the change. 

Usually, the second vehicle can be easily added at almost any time, depending on the provider. Some companies even allow you to add your second vehicle entirely online. 

Be sure to have the following information available when you go to add your second car to your auto insurance policy:

  • The vehicle make and model and year
  • The vehicle identification number (VIN)
  • The license plate number
  • Your current auto insurance policy number

What is a policy number on auto insurance? It is the number often found on your insurance card to help identify you and your coverage level. 

Before adding a second car to your current policy, consider shopping around and comparing rates from different providers. You might receive more affordable rates for better coverage. 

Does the auto insurance coverage need to be the same on both cars?

Usually, you’ll be able to choose the coverage level for each vehicle on your policy independently. However, you will be expected to carry your state’s minimum legal auto insurance requirements on every car on your policy. 

If you are not sure of what your state’s minimum auto insurance requirements are, take a look at the table below to find out.

Minimum Legal Auto Insurance Requirements by State
StateMinimum BI & PD Liability LimitsRequired Insurance Policies
Alabama25/50/25BI + PD Liability
Alaska50/100/25BI + PD Liability
Arizona15/30/10BI + PD Liability
Arkansas25/50/25BI + PD Liability, PIP
California15/30/5BI + PD Liability
Colorado25/50/15BI + PD Liability
Connecticut25/50/20BI + PD Liability, UM, UIM
Delaware25/50/10BI + PD Liability, PIP
District of Columbia25/50/10BI + PD Liability, UM
Florida10/20/10BI + PD Liability, PIP
Georgia25/50/25BI + PD Liability
Hawaii20/40/10BI + PD Liability, PIP
Idaho25/50/15BI + PD Liability
Illinois25/50/20BI + PD Liability, UM, UIM
Indiana25/50/25BI + PD Liability
Iowa20/40/15BI + PD Liability
Kansas25/50/25BI + PD Liability, PIP
Kentucky25/50/25BI + PD Liability, PIP, UM, UIM
Louisiana15/30/25BI + PD Liability
Maine50/100/25BI + PD Liability, UM, UIM, Medpay
Maryland30/60/15BI + PD Liability, PIP, UM, UIM
Massachusetts20/40/5BI + PD Liability, PIP
Michigan20/40/10BI + PD Liability, PIP
Minnesota30/60/10BI + PD Liability, PIP, UM, UIM
Mississippi25/50/25BI + PD Liability
Missouri25/50/25BI + PD Liability, UM
Montana25/50/20BI + PD Liability
Nebraska25/50/25BI + PD Liability, UM, UIM
Nevada25/50/20BI + PD Liability
New Hampshire25/50/25Financial Responsibility only
New Jersey15/30/5BI + PD Liability, PIP, UM, UIM
New Mexico25/50/10BI + PD Liability
New York25/50/10BI + PD Liability, PIP, UM, UIM
North Carolina30/60/25BI + PD Liability, UM, UIM
North Dakota25/50/25BI + PD Liability, PIP, UM, UIM
Ohio25/50/25BI + PD Liability
Oklahoma25/50/25BI + PD Liability
Oregon25/50/20BI + PD Liability, PIP, UM, UIM
Pennsylvania15/30/5BI + PD Liability, PIP
Rhode Island25/50/25BI + PD Liability
South Carolina25/50/25BI + PD Liability, UM, UIM
South Dakota25/50/25BI + PD Liability, UM, UIM
Tennessee25/50/15BI + PD Liability
Texas30/60/25BI + PD Liability, PIP
Utah25/65/15BI + PD Liability, PIP
Vermont25/50/10BI & PD Liab, UM, UIM
Virginia25/50/20BI + PD Liability, UM, UIM
Washington25/50/10BI + PD Liability
West Virginia25/50/25BI + PD Liability, UM, UIM
Wisconsin25/50/10BI + PD Liability, UM, Medpay
Wyoming25/50/20BI + PD Liability
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To help you understand what each of the acronyms and policy-types mean, we’ve also created a table with common auto insurance terms and definitions. Take a look at the details and definitions below. 

Common Auto Insurance Terms and Definitions
BIBodily InjuryCovers bodily injury damage for the other driver in an accident you are found liable for.
PDProperty Damage LiabilityCovers property damage for the other driver in an accident you are found liable for.
PIPPersonal Injury ProtectionCovers your medical expenses, lost wages, and other damages when involved in an accident.
UMUninsured MotoristCovers damages to your vehicle if you are hit by a driver without auto insurance.
UIMUnderinsured MotoristCovers damages to your vehicle if you are hit by a driver with an insurance policy that does not meet the state's minimum legal standards.
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While you must maintain continuous coverage that meets your state’s minimum standard on all of your cars, you can usually change your level of collision and comprehensive coverage for each individual vehicle. 

For example, if you are financing a vehicle, you might be required by the dealership to purchase comprehensive and collision coverage. However, if you have a teen who drives an older, easily replaceable car that you own outright, you might consider purchasing a basic liability-only policy.

You can also personalize each car’s coverage further by choosing policy options like roadside assistance programs, rental car coverage, and more. 

Requirements for the Multi-Car Discount

The multi-car discount is one of the easiest and best discounts for families or individuals who own multiple vehicles. While the eligibility criteria vary from provider to provider, most companies have similar underwriting rules.

It is good to know the criteria to be eligible for this discount before you assume that it will be automatically applied to your policy. 

Here are the most common carrier requirements:

  • Each vehicle must be primarily garaged in the same household.
  • All vehicles must meet the definition of private passenger vehicle.
  • Each vehicle on the policy must have at least liability coverage. If a car has only storage coverage, it won’t qualify.
  • Two or more vehicles must be insured with the same carrier either on a multi-vehicle policy or bundled together on single car policies.
  • Some companies will offer the multi-car discount if you carry motorcycle insurance with the same carrier.
  • Some insurers require all cars to be in the insured’s name and others will apply the discount for cars owned by household family members listed on the policy.

If you apply for auto insurance for two or more vehicles from the start, the insurer will automatically give you a discount at the time of your quote. If you purchase a new vehicle and add it to your policy, the discount will be applied to each vehicle to take the rates down.

Discounts are a great way to save money on your auto insurance premiums, and you can stack the savings for even lower monthly costs. 

It’s always worth asking about what discounts you and your family qualify for, even beyond the multi-car savings opportunities. 

If for some reason the carrier you do business with doesn’t sell multi-vehicle policies, you may have to give them your other policy number to get your discount on each of your single-car policies.

It’s also important to check every renewal when you have single-vehicle policies so that you can ensure the discounts don’t accidentally fall off. This is rare, but it can happen.

As always, compare rates from multiple providers to ensure you’re getting your best rates on your two-car auto insurance policy. 

How much can you save with a multi-car discount?

Every company has its own unique discounted rates. Some companies are more generous than others when it comes to deducting money for adding a second car. 

A few companies do not make the specific savings amounts publicly available. You must qualify for the discount to find out what your savings will be.

The typical amount of you’ll save with a multi-car discount is between 2 and 25 percent for bundling your two auto insurance policies. But the only way to see where you’ll save the most money by bundling your auto insurance is to shop around.

If you’re interested in comparing premiums on your own, use an online rate comparison tool and get instant quotes now. Adjust coverage options and see which carrier offers the best multi-car coverage at the most affordable price.

Other Factors that Can Affect the Cost of Auto Insurance

Every insurance company determines rates in slightly different ways. The purpose of rate-making in the world of auto insurance is to estimate how much the company must charge to cover both losses and expenses. 

The gross premium is what an insurer must charge an insurance applicant to cover exposure and expenses while still allowing for profits.

While each company sets its own rates, according to the Insurance Information Institute, insurance premiums are highly regulated through the State Department of Insurance and must be adequately priced, not excessive, and cannot be unfairly determined. 

Because of this, the final rate that the company decides to charge must be deemed fair and reasonable by the state.

Insurance companies don’t just charge you a gross premium. Auto insurance rates are also all about the perceived risk of the driver. If you have a lot of claims and at-fault accidents on your record, you might be placed in a higher-risk category than someone with a clean record. This will cause your premiums to be higher than average, even with a multi-car discount.

To determine your risk level, insurance providers consider many different variables. These factors include your age, ZIP code, driving record, and coverage level. The make and model of the vehicle you drive may also affect your premiums. 

It’s most common for companies to use class rating, experience rating, and merit rating methods to determine how much to charge you when you’re applying for coverage.

Class rating is used when estimating how much to charge in a specific region or for a specific vehicle. This is most commonly used for standard auto insurance.

For a class rating to be effective, there must be copious statistics available that help to identify the probability of a claim.

Merit and experience ratings help insurance companies dive deeper when determining the appropriate rate for an applicant.

When using experience rating, the company looks back on a driver’s loss history and accident history to see how safely a person drives. Merit rating is used in conjunction with class rating to use personal information to give you premium credits.

To ensure you choose the best provider for you and your family, always compare rates from multiple different providers.  

You are now an expert on getting cheap rates for your second car’s insurance policy. By using the same provider for both vehicles, you’ll receive discounted rates.

Are you ready to buy multi-car auto insurance? Find out which insurance company will provide you with the most affordable multi-car auto insurance quotes by entering your five-digit ZIP code into our FREE quote tool below.   


  1. https://www.iii.org/publications/commercial-insurance/how-it-functions/regulation

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