Car Insurance for a Second Vehicle

Buying car insurance on a second vehicle is a lot like buying insurance on your first. You need to provide the same vehicle information, answer the same underwriting questions, choose your coverage limits, and select an effective date for your coverage to begin just like you did the first time around.

What you might not know is that adding the second vehicle could actually lower your rates.

While it might not seem fair, policyholders who insure more than one vehicle with the same carrier may be eligible for lower rates and even some sizable discounts.

If you’re not familiar with the process of insuring a second car, read this guide and you’ll see the benefits of buying coverage on more than one car through the same carrier.

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When You Buy Car Insurance on a Second Car, You Get a Multi-Car Discount

The more reputable auto insurance carriers offer a long menu of insurance discounts. You can’t just select a discount off the menu, you have to qualify for it.

Perhaps the biggest discount that you’re eligible for when you buy insurance on a second vehicle in your name is the multi-car discount, also known as the MCD.

A multi-car discount can range between 10 percent and 30 percent off of your premiums. The savings isn’t just applied to the vehicle you’re adding, it’s also applied to the vehicle that you already have insured through the carrier.

Virtually all companies offer their customers multi-car discounts as long as the vehicle is owned by the same person, spouses, or family members in the same household.

Some Companies Offer Extra Vehicle Discounts

Not only will you be eligible for a multi-car discount, with some carriers you could receive an extra vehicle discount when you add your new car to your policy.

Not everyone with two cars will receive this type of savings. In order to get the extra car rating, you must have more cars than drivers in the household.

Extra vehicle ratings will keep the premiums lower on the vehicle that’s not driven primarily.

Since a single driver with two cars can only reasonably drive one car at a time, the second car that’s driven for leisure is less of a risk. This is why offering the discount makes sense in a 2-car and 1-driver household.

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What is the difference between a single-car and multi-car policy?

Some older insurance companies sell single-car policies and the rest sell combined multi-car policies. With a combined policy, all of the vehicles are added to the same plan and will have the same liability limits and named insureds.

With a single-car policy, you can adjust the policyholder names and limits.

Your experience when you add insurance on your second car through a company with single-car plans may be a bit different because you’ll get a new policy number.

The policy will also have a different policy term. Even though there are different policy numbers, you’ll still be eligible for the multi-car and extra car discounts as long as you provide your other vehicle information.

Change Your Vehicle Usage When You Add a Second Car

Vehicle usage is a common rating factor that’s used to determine rates by analyzing risk. If you drive a car for pleasure, you’ll pay lower rates than you would if you drive a car for business use or to commute to work.

It’s very important to be honest with your usage classifications so that you don’t have to deal with any claims denials.

If your first car is rated as a commuter car or business vehicle, you may want to consider changing the classification after the second car is added.

Ideally, it’s best that you drive the least expensive car to work so that you can pay pleasure usage ratings on the vehicle that carries the higher premiums.

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Review Your Annual Mileage and Update It If You Can

Another factor that can help you save money when you buy insurance on a second car is annual mileage. Annual mileage can drive your rates up and down.

The premise is that you’re more exposed to potential loss when you drive more. This is why people who drive less than the average driver in the United States can receive a low-mileage discount.

When you have a second car and the number of drivers in your home hasn’t changed. That means that the mileage will be distributed between two cars. If you believe mileage in the first car will go down, have the rated number of miles adjusted. This might lower your premiums for the first car.

Don’t Forget to Change your Driver Assignments

If you have primary and occasional operators on your policy, you’ll have to change the driver assignments so that each car has a primary operator. Preferably, the primary driver of the car will be the most experienced driver with the best driving record.

Make sure to compare the premiums for different driver assignments before you make a choice.

If you are shopping for a new car, you should prepare your budget by comparing insurance premiums. It is easy to get rate quotes for coverage through your current carrier when you’re interested in adding a second car to the policy.

You can also get quotes for your current car and the second car through other competitors online. Use an online rate quote tool to see if you can save money with the competition or if it’s best to stay with your current company.

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