Adding a second car to your insurance: costs & savings guide

Are you thinking of adding a second car to your car insurance policy? You're not alone. More and more Canadian households are adding vehicles to their current auto insurance plans when their teens can drive, as a fuel-efficient side vehicle for their daily commutes, and more. Regardless of which category you fall into, understanding the financial and coverage implications of doing so is essential.

The good news? You can save money on your insurance premiums by opting for a multi-car insurance policy. With 483,287 new vehicles registered in Q3 2024 alone, insurance companies are offering multi-car insurance policies to customers living in big households with more than one car. Stick around to learn more about what to expect in terms of costs, savings, coverage, and more!

How much does a multi-auto insurance policy cost?

Premiums are strongly impacted by the province you live in. In December 2024, for example, Ontario and Alberta had the highest average auto insurance premiums. This, along with inflation and the rising costs of vehicle parts and repairs in the last five years, can also contribute to higher-than-average insurance costs.

Therefore, while adding two or more vehicles to the same policy may increase your premiums slightly, you can save up to 20% on each vehicle you insure through a multi-vehicle discount, which you won't qualify for when you purchase separate car insurance policies.

What affects the cost of your insurance coverage?

How car insurance companies work is by conducting a risk assessment on customers based on numerous factors. The higher risk you are, the more you can expect your insurance premiums to cost. Common factors insurance companies are considering include:

Age and driving experience

If the new driver you add to your existing policy is younger (under the age of 25) with minimal driving experience, most insurance companies will charge you higher rates, due to their lack of experience. If you're adding an experienced driver with a clean record, insurance providers are likely to charge you less.

Vehicle make and model

Standard vehicles with good safety ratings are less to insure than luxury vehicles. Insurance companies will also look at the vehicle theft rates for your car model, which will factor into how much money you need to pay.

Where you live

Premiums are more expensive in provinces where there are more collisions, theft, or weather-related claims. In Ontario, for example, the 2023 comprehensive claims ratio reached 190%, which means insurers paid out $1.90 in claims for every $1 in premiums, which is partly why those in the province pay more for coverage than other parts of Canada.

How you use your vehicle

The more you drive your vehicle, the more likely you are to be in an accident. Therefore, a car driven daily will cost more to insure than one used occasionally.

Primary Driver vs. occasional driver

If the second vehicle is going to be used primarily by someone other than the policyholder, their driving record and risk profile are weighed more heavily when determining rates.

How to save money with your insurance company: multi-vehicle discounts

Insuring multiple vehicles under the same car insurance policy doesn't mean you need to pay more for your coverage. Here's how to save:

• Multi-Vehicle discount: Most insurance providers will provide up to a 20% discount if you opt for multi-vehicle insurance for more than one vehicle in the same household.

• Bundle your policies: Rather than having two car insurance policies, home insurance, and other coverage from separate providers, consider bundling your plans with the same insurer to save up to 20% on coverage.

• Loyalty and usage-based programs: Sticking with the same insurer and enrolling in telematics programs, which monitor driving habits, can lead to additional savings on your premiums.

Looking to maximize your savings? BrokerLink can help! Contact us to work with an experienced insurance broker today!

Benefits of a multi-car insurance policy

Still unsure whether it's worth investing in multi-car insurance rather than separate policies? Here are some added benefits that may change your mind:

• All cars share the same insurance renewal date and expiration date.

• Policyholders can customize their coverage for each vehicle (excluding liability car insurance).

• You only have to keep track of and pay one premium rather than multiple premiums each year or month

• Need to file a claim? File under the same insurer!

Contact BrokerLink to find the right coverage today

Looking to get a lower insurance rate in Canada? BrokerLink can help! Our Brokers can help you shop around for car insurance policies and customize a plan with the following coverage to ensure you feel confident on and off the road:

• Third-party liability

• Accident benefits coverage

• Collision coverage

• Comprehensive insurance

• Accident forgiveness

Contact us over the phone or use our free online quote tool today!

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