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If you drive a car, you need car insurance. It’s the law here in Canada, so there’s no getting around having to purchase a policy. On average, Canadian drivers pay an average of $1,320 per year in car insurance, and even more in some provinces like Ontario, where the average price drivers pay for insurance is $1,920 per year.

That said, there are several discounts available that may qualify you for cheaper premiums. Let’s go over some of the discounts available to help you keep your car insurance premiums to a minimum. 

Types Of Car Insurance Discounts

When you speak with an insurance agent to get your vehicle equipped with an auto insurance policy, inquire about specific insurance discounts they may offer. Depending on your situation, you may be able to take advantage of multiple discounts that can leave you with a much cheaper policy. Here are some discounts that most insurance companies in Canada offer.

Insurance Policy Discounts 

Home and auto bundle discount. Bundling your home and car insurance policies together can save you as much as 20% or more compared to having two separate policies.

Multi-vehicle discount. If there are several family members in your household who drive separate vehicles, it makes more financial sense to have them all under one policy rather than separate ones, as multi-vehicle coverage will be cheaper overall while still providing the same level of coverage. You can save as much as 15%. 

Payment discounts. There are certain payment options available that offer slight discounts compared to paying monthly. For instance, paying for the full year, paying on time on a consistent basis, and setting up automatic payments can come with discounts between 2% to as much as 15%.

Driving Discounts 

Good driver discount. If you have a clean driving record, your insurance provider may reward you with a discount on your car insurance policy because you are considered less of a risk. In fact, safe drivers can receive discounts as much as 30%.

Telematics insurance discount. A telematics device, as well as a specific tracking app, can keep tabs on your driving habits. This can help insurance companies get an accurate understanding of what your driving habits are like, which can also determine your risk level. With a telematics device in your car, you can earn a discount on your car insurance policy. The safer your driving habits, the higher the discount. You can save as much as 30%. 

Loyalty discount. Some insurance companies offer discounts to policyholders who renew their policies every year. The longer you’re with your insurance provider, the bigger the discount you may expect. You can save anywhere from 5% to 10% based on this principle.

Vehicle Discounts

Anti-theft device discount. If your car is equipped with an alarm system or other type of device that protects it from theft, you’ll be less likely to file a claim. In turn, your insurer will offer you a discount on your policy of anywhere from 5% to 15%. 

Winter tires discount. Canadian winters can be harsh with snow and ice typically covering roadways throughout the season. Equipping your car with winter tires has been shown to make your vehicle safer to operate, and insurance companies recognize this and offer discounts as much as 5% as a reward. 

Private parking discount. Where you park your car every day makes a difference in how safe it is from damage or theft. Insurance companies look at the risk factor when it comes to car insurance, and parking plays a role. Parking your car in a private driveway or garage can earn you a discount of up to 5% on your premiums.

Eco-friendly vehicle discount. Insurance companies are starting to offer discounts for cars that are considered “green” or easy on the environment, such as hybrids or electric cars. You can save up to 10%. 

New vehicle discount. Buying a new car that’s less than 3 years old may be considered less of a risk to insurance providers, which can translate into cheaper premiums. You can save as much as 10%.

Higher deductible discount. This is not a conventional discount per se, but you can bring your premiums down by increasing your deductible. The deductible is an amount paid when you file a claim before your policy kicks in. Generally speaking, higher deductibles mean lower premiums. So if you’re looking to keep your premiums to a minimum, consider increasing your deductibles.

Individual/Lifestyle Discounts

Senior discount. Older drivers who still maintain a good driving record may be eligible for savings of up to 10% on their car insurance policy. 

Good student discount. Full-time students between the ages of 16 and 25 years who have managed to maintain at least a “B” average or higher may be eligible for a discount of up to 10%. 

Drivers training discount. New drivers who go through a driver’s training course will be better equipped to understand road safety. insurers are willing to reward drivers who take these government-approved courses with discounts as much as 10%.

Away at school discount. Parents with grown children who attend post-secondary school out of town may qualify for a car insurance discount of as much as 30%. 

Car Insurance Discount FAQs

What’s the best car insurance discount?

You’ll probably get the highest discount on your car insurance premiums when you bundle it with other vehicles in the home or with your home insurance policy. If you don’t own a home, you may also be able to bundle your auto insurance with condo, boat, RV, or motorcycle insurance to help you save.

How do I know if I qualify for a car insurance discount? 

Ask your insurance agent what types of discounts they offer and if any of your current situations help you qualify. You might be eligible for certain discounts that you may not even be aware of, so be sure to ask.

Can I get a car insurance discount for being a good student?

Yes, some insurance providers offer discounts on policies for students who maintain good grades. Generally speaking, you’ll need to earn at least a “B” average and be between the ages of 16 to 25 years of age.

Can I get a car insurance discount for driving an eco-friendly car?

Yes, eco-friendly cars qualify for car insurance discounts.

Final Thoughts

Auto insurance is a requirement by law to operate a vehicle on Canadian roadways, but that doesn’t mean you have to pay more than necessary. With all the different discounts available through insurance providers, you may be able to save more on your car insurance than you think. 

Lisa Rennie avatar on Loans Canada
Lisa Rennie

Lisa has been working as a personal finance writer for more than a decade, creating unique content that helps to educate Canadian consumers in the realms of real estate, mortgages, investing and financial health. For years, she held her real estate license in Toronto, Ontario before giving it up to pursue writing within this realm and related niches. Lisa is very serious about smart money management and helping others do the same.

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