Car insurance can be pricey. How can you get the best possible price when it comes time to buy or renew your car insurance?
Fortunately, there are plenty of ways to save on car insurance in Canada. Each province and each insurance provider is different, but most of them share the same pricing factors and discounts.
With these 16 tips, you’re sure to get the most affordable car insurance available.
Among the greatest car insurance discounts are safe driving or claims-free discounts. If you’ve got a long driving record without any convictions or at-fault accidents, you’ll pay way less for car insurance — like double-digit percentages less.
Every provider structures their safe driving discounts differently. They generally start after a clean 2–3 years and increase gradually as the driver accrues more accident-free years. At-fault claims usually reset the counter. But, some providers will forgive one claim if the driver’s been claim-free for a certain number of years.
Driving convictions will reduce your safe driving discount too. Those include speeding tickets, distracted driving, impaired driving, and similar offenses. It does not, despite a common misconception, include parking tickets.
Submitting a car insurance claim will often increase your premium. So, when your vehicle gets damaged, consider whether it’s worth making a claim. For example, it might not be worthwhile to submit a claim for a door ding. You are, however, obligated to report accidents with another vehicle to your insurance provider.
Of course, if your brand-new car gets totalled, you’ll probably benefit from the claim settlement far more than you would from any premium savings. But, if it’s a little fender bender that you can afford to pay for yourself, you might decide to do so. That way, you keep your claims-free discount and often save money in the long run.
On a related note, if you’re planning to self-insure small claims, you can save money on your car insurance by choosing a higher deductible. A deductible is the portion of a claim you pay yourself before your insurer pays for the rest of the loss.
If you’re comfortable paying say, $1,000 in the event of a vehicle accident, you can choose a $1,000 deductible. That means you’ll be responsible for covering any repairs that cost less than $1,000. And, you’ll pay the first $1,000 of more expensive repairs before your policy covers the remainder.
In exchange, your premiums will be lower.
If you buy less coverage, your insurance will cost less. Makes sense, right?
But, it’s important to think carefully before you start lowering limits or removing optional coverages. Consider what will happen if you’re in an accident. Could you pay for repairs yourself? Could you pay to replace your entire car?
If you drive an old, high-mileage vehicle, it might make sense to remove optional coverages like comprehensive or collision. If your car is only worth $1,500 in the first place, perhaps the savings are worthwhile. But newer vehicles are much more expensive to repair or replace, and one accident can wipe out years of premium savings.
If you lease or finance your vehicle, you’ll need to keep comprehensive and collision coverage anyway.
Your car insurance provider needs to know about all the drivers in your household. That’s a standard part of the application process. Each household driver will affect your premium, depending on their driving experience and record.
It’s possible to exclude drivers from a car insurance policy. An excluded driver is not allowed, under any circumstances, to drive the insured vehicle. The policy won’t cover them if they do.
If you have a household member who’s classified as a high-risk driver, you may be able to exclude them from the policy. That way, they won’t affect your premiums. But, they also can’t drive the insured vehicle — ever, even if it’s an emergency.
If you drive your car every day, your premiums will be higher than if you were to drive once a month. Most providers simply differentiate between commuting vehicles and pleasure-use vehicles. They might also factor in how far the commute is. More time on the road means a higher risk of being involved in an accident.
In any case, if you have the option to walk, bike, or transit for your commute, you can reduce your car insurance premiums. You’ll save on gas, too.
A missed car insurance payment can result in higher premiums. So, make sure your bank account or credit card has the funds available when it’s time for your payment.
If you completely miss a payment and your provider cancels your policy, there are also fees associated with restarting the coverage.
Many car insurance providers offer the flexibility of monthly payments. But, there’s often a small fee associated with doing so. If that’s the case, you can save money simply by switching to annual payments.
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Just about every insurance provider offers a discount if you buy both your car and home insurance from them. If yours doesn’t, or if they don’t offer both products, you might save some money by switching to a provider that does.
If you’re a renter, don’t worry — you can usually also get a bundle discount if you get tenant insurance and car insurance from the same provider.
If you buy both home and car insurance from Square One, you’ll save up to 5% on your car insurance policy (for example).
Much like the bundle discount, you can usually save on your premiums if you insure all your vehicles under the same policy. There are some limitations, such as a requirement that all the vehicles are from the same household.
But, if your family has a few vehicles in the driveway, you can save by insuring them all together.
For example, if you buy car insurance from Square One to insure more than one of your family’s vehicles at the same address, you’ll save up to 10%.
If you live in Canada, hopefully you’re already putting winter tires on your car every year. So this one’s a freebie: some car insurance providers offer a discount if you have winter tires on your car from December through March. Square One customers will save up to 3% when they use winter tires.
Vehicle theft is one of the most significant costs for car insurance providers — and it’s getting worse. Accordingly, many insurers offer a discount if you have one or more anti-theft devices in your car. Vehicles that are designated as high risk for theft might be ineligible for certain coverages unless they have certain anti-theft measures in place, too.
Most discounts only apply to aftermarket anti-theft devices. Anything factory-installed will already be calculated into the basic insurance rate for the vehicle.
Not every anti-theft device is created equal, of course. The best discounts go to the best anti-theft devices. For example, something like the Tag tracking system will likely get you the largest discount.
New drivers pay more for car insurance due to their lack of driving history. But, they can often earn a discount if they take an accredited driver training course. For policies from Square One, new drivers who have completed an accredited training program within the past 3 years are eligible for a premium reduction.
Unfortunately, few providers offer training discounts for experienced drivers.
If you’re shopping for a new vehicle, you can check the insurance rating of the models you’re considering. That way, you can estimate whether one or the other will cost more to insure.
The Insurance Bureau of Canada publishes a ranking of claims data for most vehicles. If you look up your target vehicles, you can see how they compare when it comes to comprehensive, collision, and other types of claims.
The vehicle characteristics are only one part of calculating car insurance premiums, of course. But, if you can’t decide between two new car models, the insurance ranking might tip the scales.
Every car insurance provider offers discounts, but no two providers offer the exact same discounts. It’s always worth checking to see if your provider has any discounts you qualify for but aren’t getting.
Some providers give discounts to people in certain professions, like lawyers or teachers or healthcare workers. Most offer discounts for seniors or retirees. Others might give discounts for parking in a private garage, or for zero-emission vehicles — you never know until you check.
Possibly the most effective way to save on your car insurance premiums is to shop around.
Every insurance provider has their own rating system and discounts. When it comes time for your annual car insurance renewal, it doesn’t hurt to shop around and see if you can find the best car insurance quote.
Want to learn more? Visit our Car insurance resource centre for dozens of helpful articles to guide you through the complexities of car insurance. Or, get an online quote in under 5 minutes and find out how affordable personalized car insurance can be.
About the expert: Daniel Mirkovic
A co-founder of Square One with 25 years of experience in the insurance industry, Daniel was previously vice president of the insurance and travel divisions at the British Columbia Automobile Association. Daniel has a bachelor of commerce and a Master of Business Administration (MBA) from the Sauder School of Business at the University of British Columbia. He holds a Canadian Accredited Insurance Broker (CAIB) designation and a general insurance license level 3 in BC, Alberta, Saskatchewan, Manitoba and Ontario.
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