Multi-Car Discounts and You

Written by Michael Browne

When it comes to spending money, four of the most powerful letters in existence are BOGO - "buy one, get one."

Multi-Car Insurance PlansAttached to anything from shoes to shirts and mobile phones to mp3 players, these four letters, often followed by phrases like "free," or "half off," mean one thing: you will be saving money by purchasing more than one thing.

Did you know, though, that the same philosophy applies to auto insurance?

Well, it does, and it's called the multi-car discount.

Offered by almost every mainstream car insurance company, multi-car discounts are a great way to save money if you, like most people in the United States, live in a multi-car household. Whether your other cars belong to your newly-licensed teen driver, your spouse, or are just an older car you haven't bothered to sell or donate yet, this discount can save you serious cash.

Multi-Car Discounts and Teen Drivers
While every parent of a teen driver goes through the internal debate about adding their child to an existing policy or purchasing a new policy in the young driver's own name, one reason to stick with the former is that multi-car discounts can help you save anywhere from ten to thirty-five percent on your monthly premium - a savings you really need when there's a sixteen-to-eighteen year old licensed driver in the family.

While adding your teen to your existing insurance policy, and adding their car as well, is still going to increase what you pay, the rules of calculated risk mitigate just how high the increase will be. Essentially, the insurance company will use a complicated algorithm to evaluate many factors, including age, sex, location, driving history, and the likelihood of your vehicle being stolen or vandalized to determine how much your insurance coverage will cost. Having more vehicles on a policy does not significantly raise your risk factor, so adding your teen to your policy, then, helps to reduce the cost of insuring the young driver in the first place.  

Multi-Car Discounts and Everyone Else
If you don't have a teen driver in the family, but you do have more than one car, even if you're the only person named on your auto insurance policy, you can still take advantage of a multi-car discount. In fact, in this case, insuring two cars could be almost the same price as insuring just one.

In most cases, anyone can qualify, and there are no limits to the number of cars that can be included on a policy (as long as there are at least two). This is an excellent way to keep an old clunker covered - add it as a second car on a multi-car policy, and cover it with the legally required minimum liability for your state. Alternatively, if you and your spouse or partner currently maintain separate insurance policies, combining them into one multi-car policy could be cost-saving.

Dare to Compare
As you should with any contemplated change to your car insurance coverage, shop for comparisons, as the actual discount offered varies from company to company and client to client. If you're happy with your existing insurer, ask them if they offer a multi-car discount (they probably do), if you're unhappy with them, be sure to factor in multi-car discounts when you request rate quotes from other companies.

Either way, remember that multi-car discounts are the auto insurance equivalent of BOGO.