In Canada, car insurance is mandatory. Unfortunately, while it does protect your car, it comes with a high price tag. On average, Canadians spend thousands of dollars each year on car insurance, and that number changes by province, coverage, the car you drive and certain personal characteristics such as your age, driving history and gender. Thankfully, there are certain tips and tricks you can use to help lower your car insurance costs.
Read on to discover how to save on car insurance.
Key Points
- The cost of car insurance depends on several factors, including your location, age, gender, and vehicle make and model.
- You can save on the cost of insurance by choosing a cheaper vehicle, keeping a clean driving record, and bundling other insurance products, like home and life insurance.
- Before buying an auto insurance policy, be sure to do some comparison shopping with several insurers to get the best rate possible.
How To Save On Car Insurance In Canada
There are plenty of ways to save on the cost of car insurance.
Shop Around
It’s important to obtain quotes from multiple insurance companies to get the best rate. Online comparison platforms can provide quotes based on your needs from multiple providers with a single application. Through online tools such as these, you’re sure to find the best rate.
Loans Canada
Loans Canada is a leading loan comparison platform that connects Canadians and lenders that offer auto insurance products, among a host of other financial products.
Simply enter a few pieces of information about yourself and your vehicle within a couple of minutes, as well as the type of coverage you’re looking for, and Loans Canada will instantly populate a list of lenders and their offerings. Then, you can quickly peruse and compare lenders to find the one that most closely suits your needs and budget.
Onlia
Onlia is a digital insurance provider that offers customizable auto insurance policies with flexible coverage options. It coverages such as third-party liability, accident benefits, and direct compensation for property damage (DCPD), as well as optional add-ons for enhanced coverage.
The Onlia Insurance™ app is available to help policyholders track their good driving habits, which can result in up to $50 cashback per month. Car owners can get quick quotes, purchase, and manage their insurance policies online, making it a convenient option for drivers.
MyChoice
MyChoice is a Canadian insurance comparison platform that helps car owners find and compare the best auto insurance rates. Thanks to its vast network of insurers, MyChoice connects Canadians with several providers, allowing users to quickly compare quotes and purchase cost-effective coverage.
This makes it easier and more convenient to find the right insurance provider, allowing MyChoice to do all the legwork. Simply answer a few questions about yourself, your vehicle, and the type of insurance you need, and MyChoice will populate a list of appropriate options.
Look Out For Deals
Whether on the internet, radio, or emails you receive, always keep an eye out for potential deals and promotions. Approach your insurance agent with questions regarding new discounts advertised, you just may be able to find a better deal.
Look For Car Insurance Discounts
- Bundle Up: A lot of insurance providers provide insurance for more than just cars. They often offer home, travel, and life insurance as well. In an effort to gain more business, these insurance providers offer discounts if you bundle two or more insurance policies with them.
- Individual/Lifestyle Discounts: Look for discounts offered to those within certain categories, such as senior, student, or military member discounts.
- Driving Discounts: Insurance providers typically offer discounts to drivers who have maintained a clean driving record and put few kilometers on their cars every year.
- Vehicle Discounts: Certain types of vehicles may be eligible for discounts, such as:
- Hybrid & electric vehicles
- Newer vehicles with modern safety technology
- Models with lower theft rates and accident risks
- Winter-ready vehicles equipped with winter tires and all-wheel or 4-wheel drive
- Anti-theft equipped vehicles
Learn more: Car Insurance Discounts
Don’t Get More Coverage Than You Need
Make sure your type of coverage is aligned with the type of car you have and your specific needs. It makes little sense to buy a more expensive plan with extensive coverage if you don’t need it. Speak with your insurance agent to help you choose the coverage that best aligns with your needs.
Increase Your Deductible
An insurance deductible is what you pay out-of-pocket before your insurance kicks in. Then, your insurer covers the remainder of the cost of the claim.
Generally speaking, a higher deductible means lower premiums, and vice versa. So, if you’re looking to keep your ongoing insurance costs low, consider choosing a higher deductible.
Learn more: What Is An Auto Insurance Deductible? Should You Raise It?
Increase Your Credit Score
Car insurance providers often review credit scores to assess risk. Insurers believe there’s a connection between low credit scores and bad driving habits. As such, many insurance companies use your credit score to help determine the premium rates they charge you.
As such, this should be a strong motivator for improving your credit score. With a healthy credit score, your likelihood of having lower premiums will go up.
| Note: Not all provinces let insurers request credit checks for auto insurance. While most provinces permit it, Ontario and Newfoundland have banned the practice under provincial regulations. |
How To Lower Your Car Insurance By Being Safe
- Drive Safely – Driving history is a key factor in the cost of your insurance premiums. The better driving record you have, the less you will end up paying for insurance in the long run.
- Buy A Safer Car – When purchasing a car, it is important to keep in mind that safer cars will ensure lower insurance costs. On the other hand, a sports car will have much higher insurance costs.
How To Lower Your Car Insurance By Being Proactive
Lowering your car insurance premium costs involves smart strategies to implement proactively. Here are a few effective steps to consider:
Avoid Making Claims
Insurance providers reward drivers who have no claims in their policy history with discounts over time. That’s because lenders view policyholders who have made no claims as a lower risk, and will reward drivers accordingly. As such, avoiding insurance claims can help keep your auto insurance premiums lower.
Learn more: Find Out How Your Claims Affect Your Insurance
Don’t Drink And Drive
Driving while drunk increases your chances of getting into an accident, which would in turn increase the odds that a claim may need to be filed. If you’re caught drinking and driving, you’ll be considered high-risk in the eyes of the insurer and will face much higher premium rates on your insurance policy.
Learn more: How Does Drunk Driving Affect Your Car Insurance?
Don’t Drive High
Like driving while intoxicated, driving under the influence of drugs can also have the same effect on your ability to drive, and also the likelihood that you’ll get into an accident. In turn, this will drive up your chances of filing a claim, which will result in more expensive premiums.
Do Not Miss Your Car Loan Payments
If you miss your car loan payments, you risk going into loan default, which can have a negative impact on your credit score. In this case, insurance companies may charge you higher premiums, depending on where you live.
Learn more: Can Missed Auto Loan Payments Impact My Car Insurance Rate?
Do Not Auto Renew
Letting your car insurance policy auto renew means you could be missing out on better rates that may be available. Instead of allowing your policy to auto renew, give yourself a chance to look over your current policy to see if you can make any change that may save you money, as well as to shop around for other policies available that may be cheaper than what you’re currently paying.
Can You Save Money On Car Insurance By Putting It On Hold?
There may be times when you don’t use your car during the year. Maybe you have a sports car that you keep stored through much of the winter and only take it out in summer months. Or perhaps you travel a lot for work and only need your car when you’re back in town.
Whatever the situation, you may wonder if you can put your policy on hold when you don’t need it. After all, the cost of car insurance is quite expensive, so it might make sense not to pay for a full year worth of coverage when it’s not always needed.
The thing is, you can’t really put a hold on your car insurance policy. That said, you may be able to make some changes to your policy if it will be parked for a prolonged period of time. The options available to you will depend on your insurance company and your location.
For instance, in Ontario, there may be some situations in which you can pause your car insurance policy. If so, there are specific forms that would need to be filled out to make these changes. And in BC, storage policies are available. That means you’ll still need some form of coverage.
What Are The Average Car Insurance Rates In Canada?
The cost of car insurance varies from province to province, with premiums costing more in certain regions compared to others. The following chart lists the annual cost of insurance premiums across Canada:
following chart lists the annual cost of insurance premiums across Canada:
| Province | Cost Of Car Insurance |
| BC | $1,832 |
| Alberta | $1,316 |
| Saskatchewan | $1,235 |
| Manitoba | $1,528 |
| Ontario | $1,528 |
| Quebec | $717 |
| New Brunswick | $867 |
| Nova Scotia | $891 |
| Newfoundland & Labrador | $1,168 |
| PEI | $861 |
Why Is Car Insurance Cheaper For Women?
Car insurance is often cheaper for women because they’re typically considered lower-risk drivers. More specifically, women tend to:
- Have fewer accidents
- File lower-cost claims
- Drive more carefully
- Follow speed limits and traffic laws more closely and consistently
As such, insurance companies tend to charge slightly lower premiums to female drivers. That said, the difference in cost is based on other factors besides gender, and may vary by insurer.
How Are Car Insurance Premiums Calculated?
Car insurance is determined by many variables, including the following:
| Coverage | The more coverage you want, the higher your rates will be. For example, a comprehensive policy with added endorsements will cost you more than a basic policy. |
| The Car | Insurers will take into consideration the make and model of your car, along with yearly mileage. Luxury vehicles, for instance, may be more expensive to insure compared to a less expensive model, like a Toyota Corolla or Honda Civic. |
| Personal Details | When insurers assess your level of risk, they will look at various factors, such as your age, gender, location and credit score. |
| Driving History | Insurers will also evaluate how you’ve driven in the past. The more infractions and claims you have, the riskier you look, and thus, the higher your rate may be. |
How To Switch Car Insurance Providers
If you’re not happy with your current auto insurance provider or have found another firm that can offer lower premiums, you may want to consider making the switch. You can make the switch during renewal or mid-policy; however, ensure there are no cancellation penalties or administrative fees for cancelling your policy in the middle of the term.
Before cancelling, ensure you set up your new auto insurance policy first, before cancelling your current one, to avoid any lapses in coverage. Make sure you swap out your old policy information from your vehicle with the new policy. You should also carry this information in your wallet.
Bottom Line
While car insurance is expensive, it does provide a lot of financial protection and peace of mind. Just be sure to compare rates and policies so that you’re not paying more than you should. If you follow these general tips and guidelines, you should be able to successfully maximize your savings by minimizing your insurance rates.
