15 ways to get cheap car insurance in Canada
We've summarized our list of the top ways you could save on car insurance this year.
- Choose the right car
- Adjust your policy to reflect your needs
- Drop optional coverages
- Track your driving
- Shop around and get quotes
- Keep a good driving record
- Ask for discounts
- Bundling your policies
- Make your payments on time
- Get a good credit score
- Make annual payments
- Increase your deductible
- Take an accredited driving course
- Install anti-theft devices
- Drive less
So let's dive a little deeper into each one of these money savers.
1. Choose the right car to keep your insurance costs down
If you want cheap car insurance, you should keep insurance costs in mind when you’re thinking about buying a car and even do some insurance price research before driving that car off the lot.
Insurers consider a range of statistics when assessing how much to charge for coverage for any driver and car combination.
For instance, car models frequently targeted by thieves may cost you extra to insure, as will rarer cars and fancy sports cars. However, a minivan is often one way to get super cheap insurance because of its association with families carrying precious cargo.
You can use the Insurance Bureau of Canada’s CLEAR table to discover which vehicles have low claims against them, translating to lower auto insurance rates. However, if you're not an Excel wizard, you can just compare car insurance prices by entering your postal code above.
2. Adjust your policy to reflect your needs
Different drivers have different insurance needs, so find an insurance plan that caters specifically to you.
There are four mandatory coverages, pretty well across Canada:
- Third-party liability - if you damage someone else’s property or injure them;
- Accident benefits - if you’re hurt following an accident;
- Uninsured auto - if an uninsured motorist hits you;
- Direct compensation property damage - this form of coverage is available in most province and is in place so you only ever deal with your insurer regardless of fault when settling a claim. Your insurance company fights to receive compensation from the other insurer, without your involvement.
The minimum third-party liability (TPL) is $200,000 in most provinces but is generally set at a recommended default of $1 million. If you want really cheap car insurance, you could opt for the minimum and take on more of a risk. However, we do not recommend it. Many TPL claims go easily over $1 million, and you'll be paying that difference out of pocket.
Accident benefits pays for your recovery after an accident for physiotherapy and medical expenses. It also pays for loss of income and funeral expenses. You can upgrade this portion to receive more income replacement (it's not much, depending on the province). Still, suppose you have quality health benefits at work (including long-term and short-term disability) and life insurance. In that case, you can reduce this to the minimum coverage.
3. Drop the optional coverages if you no longer need them
If you have an old car, consider forgoing collision coverage. Many drivers skip this form of coverage if their old car is no longer worth repairing because it doesn't hold much value. Think of it this way, if you have to pay a $1,000 deductible to repair a car, that's only worth $500, you can drop collision. Put the savings into a new car fund.
You can also forgo comprehensive coverage to get cheap car insurance. Comprehensive protects your car when it's not driving – bad weather floods your vehicle, or a tree falls on top of it, for instance.
4. Track your driving
Consider usage-based insurance (UBI), especially if you're a student or a young driver. Young males typically pay much more than the average for car insurance due to stereotyping from insurance companies.
UBI tracks kilometres driven and other stats like how aggressively you brake and accelerate, speeding, and how you handle turns. With this system — which you can monitor yourself on your phone — you can earn discounts for driving well.
Many auto insurance companies like Intact, CAA, or Onlia offer UBI, either in-app form or a device installed in your engine, to monitor your performance outside generic statistics.
5. Shop around and get quotes
When shopping for car insurance, do not take anyone's word that they're the best deal for you — you need to find that out for yourself. Do your research. Don't assume the most prominent company is the best, just because they spend the most money on advertising to tell you they're the best. You may not have heard of some great insurance companies.
You can use our car insurance quoter to analyze what different insurers will charge you. Or consider also doing it the old-fashioned way and visit an insurance broker to help you find the best fit for you.
Make it an annual tradition because companies change pricing all the time.
