How to get cheap car insurance
It can seem like a total mystery how car insurance rates are calculated. Maybe you're wondering how to save money so your budget has some more breathing room? We’re going behind the scenes to understand how insurance companies calculate your car insurance rate, and what you can do to get cheap car insurance!
What determines the cost of auto insurance
Insurance companies calculate car insurance rates for different customers based on a whole range of factors. Here are the factors insurance companies use to calculate car insurance premiums:
Your age, gender and driving experience all affect your car insurance rate. Statistically, single males under 20 have a higher risk of car accidents so if you’re in this category you’ll usually be paying more! The good news is that the average rate drops for all drivers once they turn 25.
Your driving and car insurance record
When it comes to car insurance, your reputation matters! A clean driving record and claims history go a long way to securing cheaper auto insurance. Any prior accidents and traffic tickets will make insurance companies consider you a riskier driver, and your rate will be more expensive.
Where you live
Yup, even your postal code has an impact on your car insurance rate. This is because some areas have higher claims costs. For example, urban areas tend to have busier roads, more accidents and more thefts so car insurance rates are higher in these areas.
The type of car you drive
Unsurprisingly, expensive cars are generally going to be more expensive to insure. A car that’s smaller and older will often come with a cheaper car insurance rate! The safety and security features of your car also play an important role in determining car insurance rates.
How much you drive
Your annual mileage and your daily commute are both considered when calculating your car insurance rate. When you drive more, there is a higher chance of having an accident or other type of claim so your rate will be higher.
How you drive
If you’re using a usage-based insurance (UBI) program, then the way you drive will also impact your car insurance premium. UBI programs use an app on your phone to measure your speed, smoothness and focus to give you a safety score which the car insurance company uses to calculate a personalized premium.
Experienced drivers have fewer accident claims, so they can have cheaper car insurance rates. Car insurance tends to be the most expensive for young for drivers under 25, and is cheapest for more experienced drivers aged 30-70. Drivers over 70 might see their car insurance rate start to increase again, as their risk level increases.
Electric vehicles are more expensive than comparable gas-powered vehicles, which means they can be more expensive to insure. However, many insurance companies offer special discounts for hybrid and electric vehicles, so your insurance doesn't have to be expensive. The best way to determine the cost of auto insurance for a particular electric vehicle model is to get a car insurance quote with an insurance company.
SUVs, crossovers and minivans are usually cheaper to insure as they are designed for families with safety in mind. These types of vehicles tend to have more experienced safer drivers. Used vehicles are also usually cheaper to insure than new vehicles as they cost less to replace in case of an accident claim.
Luxury cars or sports cars are more expensive to insure because of the high cost to repair or replace them in case of a claim. They are also more prone to theft and have a higher likelihood of high-risk drivers with a need for speed!
How to get cheaper car insurance
Insurance companies use a range of factors to calculate your car insurance rate. Ok, some things – like your age – you can't change! But there’s still a whole lot you can do to get cheaper auto insurance.
Keep a clean driving and car insurance record
Keep your driving record in tip-top shape by following the speed limit and highway code, and driving appropriately for the weather conditions. Maintain good standing with your insurance company by paying your car insurance premiums on time!
Choose a car that’s cheap to insure
Choose a type of car that’s cheaper to insure – you can check out Forbes’ list of the cheapest cars to insure in 2023 for inspiration! Buying a used car that’s safe and reliable can save you money upfront as well as help you get cheap car insurance rates.
Unless you have an Accident Forgiveness endorsement, any car accidents will increase your auto insurance premium! Defensive driving can help you to reduce the chance of an accident.
Reduce your mileage
Reducing how far and how often you drive should make your auto insurance premium cheaper. Work from home if you can, or take public transport for your commute – it’s good for the environment too!
Improve your credit score
In most provinces, insurance companies offer a discount for customers with a good credit score. If you have a good credit score, consenting to a soft credit check could help you get cheaper auto insurance rates.
Sign up for usage-based insurance
Some auto insurance companies offer usage-based insurance (UBI), which uses an app to measure driving habits and assign personalized auto insurance premiums. Safe drivers can get significantly cheaper auto insurance rates by signing up for UBI.
Bundle car + home insurance
Most insurance companies will offer you the cheapest auto insurance rates if you get your home, condo or tenant insurance as well as your car insurance policy with them. It’s also more convenient for you to manage all your insurance policies in one place!
Your insurance company should also offer cheaper auto insurance rates for insuring multiple vehicles with them. You could be a couple, siblings, or even roommates living at the same address! You might be eligible for this discount even if they already have a different car insurance policy with the same insurance company.
Protect your vehicle against theft
It’s not just accidents that can make your car insurance more expensive – any theft claims will make your car insurance premium increase too. Park your car in a safe location, inside if possible, and consider installing anti-theft devices and deterrents in your car.
Ask for special discounts
You might not even be aware of the discounts you’re eligible for! Your car insurance company may offer special discounts for professional groups, students, seniors, hybrid or electric vehicles and more. So, it’s worth asking what discounts are offered to see if you qualify for any of them.
Increase your deductible
You may be able to reduce your monthly car insurance rate by increasing your deductible, which is an extra amount you will need to pay if you make a claim.
Pay annually instead of monthly
Your insurance company may allow you to pay your car insurance premiums annually instead of monthly, which can result in a cheaper rate.
Get an accident forgiveness car insurance policy
Sign up for an accident forgiveness car insurance endorsement to prevent your insurance from going up if you have an accident. If you have an accident forgiveness car insurance endorsement in place with your insurance company, you might be able to protect your premium from increasing due to an accident on your driving record.
Compare auto insurance rates from different insurance companies
Different auto insurance companies have different pricing strategies and discounts available, so it's important to shop around and compare car insurance rates from multiple auto insurance companies. You can use online comparison sites or work with an insurance broker to find the cheapest car insurance rates.
Get great deals on auto insurance and a simplified online experience with belairdirect
Make sure you compare car insurance quotes to get the cheapest rate. Shopping around compares auto insurance prices between the different insurance companies so you can find the best policy for your requirements. It’s a good idea to get auto insurance quotes from at least two or three insurance companies on their website or a comparison site, or work with a broker so you can be sure you’re getting the best deal. Don’t forget to ask for discounts to be applied when you get your car insurance quote such as bundling home and auto insurance, group discounts or electric vehicle discounts.
- Shop around and compare car insurance quotes
- Bundle car & home
- Ask for group discounts
- Work with a broker
Get a quick online quote with belairdirect in minutes and see how much you could save!
Young drivers in Canada generally have to pay more for car insurance. This is because they haven’t had time to build up their driving record over several years of experience. Statistically, young drivers between the ages of 20 to 24 are more likely to be involved in accidents, so an insurance company will consider them riskier to insure. To get cheaper car insurance as a new driver, you can do the following:
- If you’re a student, ask for a student discount or alumni discount
- Bundle your home and auto insurance – even if you’re renting, you can usually bundle tenant insurance and save
- Drive safely so you can develop a strong driving record that will help you get the cheapest car insurance rate in the future
Insurance companies usually have lots of discounts available for car insurance. The most common is a bundle discount for car and home insurance. Insurance policies are designed with loyalty in mind, so when you bundle your car and home insurance under the same company, your premium could be substantially reduced. Another common car insurance discount is a multi-vehicle discount, when multiple drivers at the same address are insured with the same insurance provider. Beyond that, the types of discounts vary but can include group discounts, electric vehicle discounts, student discounts and much more. Make sure you ask your insurance company which discounts you are eligible for, so you don’t miss any opportunities to save!
Beware – even if that car insurance quote looks like a great deal, it may not include the right auto insurance coverage for you. Sometimes, cheap car insurance quotes might be hiding a large deductible or might leave you needing to shell out thousands of dollars in the case of an accident if you don’t have enough protection. Or a cheaper insurance company might not give you the help you need when filing a claim – as if that’s not stressful enough already! You should refer to your insurance representative to make sure your insurance coverage fits your lifestyle and doesn’t end up costing you more in the long run.
You’ve probably noticed that car insurance rates seem to be going up. You’re not wrong – insurance companies in Canada have had to raise auto insurance rates because of inflation as well as record high levels of car theft. And on top of that it feels like the cost of everything else is rising too! Don’t worry, because there’s still a lot you can do to reduce your car insurance rate and save money..