With supermarket aisles full of buy-one-get-one-free offers, we are well used to discounts for buying in bulk. But does this apply to getting cheaper car insurance? Well, a number of companies offer multi-car policies aimed at households which run a number of vehicles. Government statistics show that around one in three homes now has more than one car.
And with the cost of car insurance going through the roof in recent years, it is these households who will be hit the hardest.
Multi-car insurance is marketed on the basis that policyholders get a discount for signing up a number of vehicles. But you should bear in mind that there is, in fact, no guarantee that your combined premiums with such a deal will be lowest you could possibly find.
Multi-car policies can be a way for some families to save on the cost of cover: but before signing up, you should always compare individual quotes from a wide range of providers before deciding which is the best strategy for you.
How multi-car insurance works
Certain providers offer groups of people who live at the same address the chance to insure all their vehicles under the same umbrella policy. This means you only have one set of paperwork to complete, and a single renewal date every year. These policies apply even if the vehicles have different main and named drivers, provided all the vehicles are registered at the same address.
The owners don’t necessarily have to be related. We also have a guide on how car insurance is calculated to generate a price.
Typically a multi-car policy will cover between two and five vehicles. From the insurer’s point of view, encouraging a family or other group to sign up to this type of cover brings in more business than if they each went with a different firm. That’s why companies are happy to offer discounts on what the group would pay if they each bought individual policies from the same provider.
Insurers say that some groups or families with several vehicles can save more than 20 per cent on their premiums, although the discounts for homes with two drivers and two cars are likely to be lower than this.
Drawbacks of multi-car cover
If you have several cars you’d like to put on a multi-car policy, chances are they all have different renewal dates. What the insurer will normally offer to do is add each car to the collective policy whenever that particular vehicle’s cover comes up for renewal. You should be able to get a price for subsequent vehicles when you insure the first car, which will be honoured provided the drivers’ circumstances – such as their make of car, and whether they’ve made any claims – do not change.
Bear in mind that once all the cars’ renewal dates are brought into line, the household will face a large one-off insurance bill at the same time every year. This could cause cashflow problems if the premiums are being paid from the same salary – for example if a father is paying for his own cover as well as that of his wife and children.
Shop around
Don’t assume that, just because you’re getting a discount for a multi-car policy, this is the cheapest way of buying cover. It may be better value if each motorist obtains their own cover from different providers. There is no way of knowing what the best or cheapest solution is for you and your family without actually comparing prices between multi-car and individual policies.
For example, the company offering a multi-card policy may be especially expensive for young male drivers. So including your 18-year-old son on a group policy could turn out to be more costly even with a discount factored in.
Other ways to save
Households with several cars are likely to have seen their insurance payments rise rapidly over recent months and years. But there are other ways you can try to keep a lid on premiums:
- Add a named driver. If one of your family’s drivers is young or inexperienced, adding a more experienced named driver, such as a parent, to the policy, could result in a fall in premiums.
- Reduce the excess you pay. You can cut your premiums by opting for a larger voluntary excess – so if you agree to pay the first £250 of any claim rather than just the first £100, your policy will cost less.
- Beef up your security. If your car is fitted with an alarm or immobiliser, it should be harder to steal. This should in turn lead to a lower cost of cover.
