How Does Adding a Second Car Affect Auto Insurance?

Quick Answer

Adding a second vehicle to your policy will likely increase your premium. However, discounts for a multivehicle policy might offset the cost, making it the most cost-efficient option.

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Adding a second car to your auto insurance policy is a decision that typically isn't made lightly. Whether it's due to your family expanding, a new driver in the household or simply a desire to streamline your policies for greater convenience, adding a second vehicle to your policy will raise your premium.

Many insurance companies offer a discount for insuring more than one vehicle on a single policy, however, which can blunt the financial impact. Here's what you should expect when adding another vehicle to your policy.

How Much Does It Cost to Add a Second Car to Insurance?

Insuring a second vehicle can increase your premium by an average of $1,185 per year, according to Policygenius, but the cost can vary significantly based on several factors. Some factors insurers consider when calculating your premium with an added second vehicle include the model year of the vehicle as well as the make and model. Some vehicles are more expensive to insure due to their higher market price, limited replacement parts' availability and other factors.

Your location also plays a significant role in calculating your premium. If you live in an area with a high claim probability, whether it's due to population density, incidence of vehicle theft or vandalism or poor transport infrastructure, you can expect to pay more to insure your vehicles.

The driving history of the drivers listed on the policy is another important factor. Depending on their claim history and how likely they are to file a claim based on your previous record, your quoted premium will differ.

What Is the Cheapest Way to Insure Two Cars?

Insuring two cars on a single policy is usually a cheaper option than insuring them both on separate policies because of multi-vehicle discounts. Insurance companies offer as much as a 25% discount for insuring more than one vehicle under one policy. Insuring both vehicles also makes it easier to keep track of your insurance and consolidates your premium into one bill.

How to Add a Car to Your Insurance

When adding another vehicle to your insurance policy, there are some steps you need to take:

  • Contact your insurance provider. Reach out to the party servicing your policy. In most cases it is your current insurance company, but it may be an agency if you found your policy through an independent agent.
  • Gather vehicle information. Collect all the necessary details about your vehicle, like its year, make and model, as well as its vehicle identification number (VIN). It's important to know the current odometer reading and your expected annual mileage as well.
  • Provide driver information. If you are looking to add a new driver to the policy along with the vehicle, be sure to get their details, including their full name, marital status, date of birth and driver's license number.
  • Determine your required coverage. If you are already certain of what coverages you would like on your new vehicle, include them when requesting the vehicle addition. If you find yourself stuck, be sure to consult the representative servicing your policy. They will be happy to advise on how to tailor the coverage to your needs.
  • Set a start date for the policy. Inform your agent or the insurance company representative of when you would like the car addition to be effective. If the vehicle was just purchased, selecting the purchase date as the effective date would be optimal.
  • Review the policy changes: Before changing your policy, be sure you understand how adding the car will affect your rate and the coverage amounts before proceeding with the change.
  • Process the change: After providing all the details and reviewing the policy endorsement, go ahead and ask for the change to be processed. Depending on the company you might need to wait up to 24 hours to get your newly generated policy documents, as sometimes the changes need to go through underwriting approval first.

How Many Cars Can You Have on Your Insurance Policy?

Insurers typically have varying guidelines on the maximum number of vehicles you can insure on a single auto policy. Most insurance companies allow up to four vehicles to be listed in an individual insurance policy. To determine how many vehicles you can list on a policy with a specific insurance provider, it's best to consult a licensed insurance specialist, or the insurance company directly to get some clarity on their limits.

The Bottom Line

When adding a second vehicle to your policy, it's important to consider the impact on your rates and coverages. Insuring both your vehicles on a single policy can be cost-effective, with potential multi-vehicle discounts.

Knowing your options is key when finding the best policy. Shopping around to compare offers from different insurance companies is a great way to ensure you're making a well-informed decision.

With Experian's auto insurance comparison tool you can shop around for insurance with multiple top insurance companies.