Question: How does one qualify for a multi-car discount? Do the cars have to be on the same policy, in the same household and owned by the same person? Does the discount get bigger if you have more cars?
Answer: The easy answer first: A multi-car discount doesn’t compound as you add more vehicles to your policy. Thus, your first car doesn’t go from a 10 percent discount to 20 percent discount if you add more cars to the policy. Instead, if you have three cars on your policy, each may get 10 percent off its portion of the premium.
In other respects, the eligibility requirements for a multi-car discount vary from one car insurance company to the next. This is one reason it’s important to comparison shop when trying to get the best auto insurance rates for your household.
In general, most car insurance companies will offer you a multiple-vehicle discount once you insure more than one automobile on your car insurance policy with the insurer. On average, the discount is between 10 to 25 percent off the liability, collision and comprehensive portions of each vehicle.
So, if you have one car on your policy already and are buying a weekend car for yourself or a car for your newly licensed teen to drive and add the vehicle to your current auto insurance policy, then you would normally get a multi-car discount applied to each vehicle’s premiums.
If you add a third vehicle to your household car insurance policy, it, too, would receive a discount. Your first two vehicles would continue to get their current multiple-vehicle discounts, but not an extra discount.
From here it gets more complicated
As we mentioned, different auto insurance companies have different eligibility rules -- so some will give a multi-car discount only if all cars are owned by the same party, in the same household and on the same policy.
If you live without someone, but aren’t married or related, it varies if the multi-vehicle discount will be applied.
Some insurers are strict and say that the two (or more) autos must not only be in the same household but insured by related individuals. Meanwhile, other insurers just want you at the same address and don’t care if you’re related.
Many carriers want all the cars to be on the same policy for the multi-car discount to apply, but some auto insurers will allow the discount to those that have different policies (with the same insurer) as long as they all live in the same residence. For instance, if your adult child is living with you and has a separate policy with the same car insurance company as you, the multicar discount may still be applied to both of your policies.
Ask your agent about your current car insurance company’s eligibility requirements. If you’re shopping around for auto insurance rates, then most insurance provider’s websites give information on their eligibility rules for discounts.
Our guide to car insurance discounts describes a multitude of additional discounts that auto insurance companies also offer. Review it to see what other discounts you should be looking for, such as good driver discounts, discounts for taking a defensive driving class and even a discount for the type of job you have.
No matter what discounts insurers may offer you, remember that it’s the bottom line that’s important. An insurer that offers you fewer discounts may end up offering the best overall price.