11 Ways to Save Money on Car Insurance

We can help you get the best rate by comparing quotes from over 30 insurance providers. The best part – it’s free!
save money on car insurance

As the cost of auto insurance throughout Canada continues to rise from one year to the next, car owners across the country are eager for ways to save money. The good news is, there are many ways to cut back on your car insurance spending without compromising your personal and financial safety in the event of an accident. Sometimes, car insurers will give you deals just for being you!

Car insurance premiums reward long term safe drivers. This means that it can take years to build a solid enough driving record that will drive your car insurance rates down (and that young drivers are deemed generally less reliable for car insurance companies). Given this bias, car insurance plans try and open up different savings opportunities, some targeted towards young drivers and others towards more experienced motorists.

However, there are many car insurance savings that any driver can benefit from. The first section of this article explores the ways in which both experienced and inexperienced drivers can make themselves appealing to car insurance companies.  In an effort to provide maximum clarity, the subsequent sections are specifically tailored to “newer” and “experienced” drivers to help you identify which tips might apply to your specific situation.

How to get cheap car insurance

Safety discounts

When shopping for cheaper car insurance, it is important to realize that some of the control is in your hands. Remember, car insurance companies are always looking for reassurance that you are a responsible and careful driver. Basically, they are always looking to make sure you are going to cost them as little as possible in insurance claims. When we think of responsible car ownership, we usually think of responsible driving, but your behaviour on the road is just one way in which you can reassure your car insurance provider.

Safety features include anti-theft precautions such as a dash cam, steering wheel lock, and alarm systems; tracking devices; front and side air bags; anti-lock brakes; electronic stability control; and automatic seatbelts. Any and all of these measures help to protect you and your car from potential theft or personal injury, which means less work (and most importantly, less money) for your car insurance provider. You will be rewarded for your safety measure with lower car insurance rates with savings ranging from about 5% to 15% depending on your provider.

Bundle home & vehicle policies

This discount is applied if you purchase more than one form of insurance from the same provider. The most popular bundle (you have most likely seen these offers because they are so aggressively advertised) is combined home and auto insurance. A couple of things to keep in mind here.

First, Bundling is appealing to insurance companies because it allows them to “lock in” their clients. This is similar to how Apple attempts to make its customers dependent on other Apple products: it’s easier to get an iPhone to sync with your Apple TV and your Apple watch as opposed to a Samsung. However, if you like Apple products, this isn’t a problem in the slightest. Similarly, if you are happy with your car insurer’s services, a bundle might be ideal.

Secondly, this option really only works for home and car owners. Those who rent or lease dwellings and/or cars tend to save much less than those who own the property they wish to insure.

Finally, the actual amount that you save by combining insurance policies will depend hugely on where you live. If you live in an area that is prone to certain kinds of hazardous weather, many insurers will not offer bundles because the potential risk outweighs the potential profits. For example, if you live in an area plagued by heavy annual snowfall, a particularly bad storm might collapse the roofs of several houses. If this happened and those people all had insurance bundles, the insurance provider would lose more money than if each person held a separate home insurance policy.

Despite the potential disadvantages, bundling does has the capacity to greatly reduce your car insurance costs. Although the exact savings are difficult to predict, bundling policies together can save you anywhere from $100 to $900 depending on where you live.

Professional discounts

These discounts target specific areas of industry. Those enrolled in the military at any age or workers in the public health system such as nurses and general practitioners are entitled to certain insurance discounts. Military discounts apply to the enrolled person as well as their spouse and any other immediate family living at the same address. For those deployed over seas, many insurers offer substantial discounts ranging from $10000 to $30000 to help cover temporary accommodation and vehicles.

Healthcare workers are also given preferential rates on car insurance (and home insurance). The Canadian Nurses Association works specifically with TD’s insurance programs to guarantee savings for registered members whether they are looking to insure a car, home, or looking for tenant coverage. Reduced rates are available for separate policies, but TD’s car insurance does encourage people to bundle their plans together.

Safe driving

This one isn’t necessarily specific to a singular discount. Safe driving is the most effective way to minimize your car insurance premium in the long term. Drivers with a clean record and minimal registered infractions are not only privy to better car insurance rates, they also earn specific bonuses. One of the most sought after car insurance benefits is Accident Forgiveness  (AF) which allows you one serious infraction without inducing a higher insurance premium. While some insurance companies allow clients to purchase AF, many others offer it as a gift.

For example, Allstate rewards its safe drivers with discounted insurance rates for every 6 months of accident-free car ownership (aka, lower insurance premiums). Furthermore, for each year of safe driving, your deductible can go down by as much as $100. Customers who go three-years without a car accident can upgrade to the Gold level auto insurance plan which includes AF.

Safe driving also includes details like winter tires. If you search online for car insurance estimate quotes, you will likely have to fill out a quick survey. One of the frequently asked questions car insurance companies ask is if you use winter tires. If you do, some car insurance companies like the Alberta Motor Association will reward you with a Winter Tires Discount.

How to get cheap car insurance for first time drivers

Being a young driver can be tough. Car insurance providers generally consider you a high risk client with the potential to cost them a lot of money. However, there are many deals to help young drivers get cheap(er) car insurance rates.

Many of these savings apply even if you are being added to another driver’s auto insurance plan (like your parent’s, for instance). However, it’s worth noting that young drivers who are hoping to purchase a car of their own should try and avoid lapses in coverage. Being added to your parent’s car insurance while a student driver, then immediately buying insurance when you graduate to G2 (or your province’s equivalent) will get you a cheaper insurance rate than going off and on insurance again. In the long run, it will also make any future car insurance cheaper. 

Once you decide to purchase an insurance plan of your own, you will again be eligible for a whole range of insurance price reductions. Check the list below to see which ones might apply to you.

Driver's ed rewards

If you are enrolled in a government approved driver’s education program, you will be considered for car insurance rate reductions. Enrolling in a driver’s ed course demonstrates to insurers that you consider driving your car as a serious responsibility. You will be rewarded for the time and expense of classes with a decrease in your starting auto insurance plan.  Of course, you will still be paying for the course, but the lower car insurance rate can well surpass the cost of classes and help you save money in the long run.

There are also some indirect savings. Speeding tickets and minor infractions can add up quickly and make your premium more expensive. People who attend driver’s ed classes are far less likely to accumulate these small expenses and so save on their premiums in the long run.

Just for reference, all driving schools in Ontario are regulated by the Ministry of Transportation (MTO). Attending and graduating from an MTO registered school can lower your auto insurance rates anywhere from 5% to 20%. This discount applies across Canada and in some provinces can be as high as 30%.

Good student discount

This is an incredibly popular discount and most large auto insurance providers, both public and private, will feature a good student reduction. This discount usually ranges from 10% to 25% and rewards students who demonstrate commitment to their academic endeavours.

If you receive good grades, maintain an average of B (3.0 GPA), appear in the top 20% of your class and/or can provide evidence on behalf of an administrator of your academic achievements, you can reap the rewards in car insurance rates. This discount is available to any student at any level, whether it be secondary education or post-graduate research. The cut off is age: good student discounts usually only apply to those 25 years old or younger, although some insurers might have more flexible rewards systems to keep reducing insurance premiums.

Alumni benefits

While not specifically targeted at young students, this discount helps any driver who is a university graduate save on car insurance. Most major Canadian car insurers will include an alumni discount. Some insurers might favour degrees from certain provinces while others specify only that the university in question be a Canadian school.

The estimates on this discount’s effect on your insurance coverage are a little harder to predict because they fluctuate quite a lot from one provider to another. Many universities helpfully list the providers which grant their alumni auto insurance discounts. Here is a list of some major universities’ alumni benefits:

If your school isn’t included on this list, try searching online for their particular alumni partnerships. If you aren’t getting any results online, contact your university administration for more information. You can also ask your prospective auto insurance company.

How to save money on car insurance

More seasoned drivers can often take advantage of young driver’s savings. For instance, if you are adding a driver to your own auto insurance policy, the insurance company will count all the discounts that apply to that driver. So, if you have a child who is studying for their license and they happen to have good grades, you can save a little by including the Good Student Discount in your own insurance policy. As well as savings targeted towards young drivers, more experienced drivers can independently get cheap car insurance rates from their insurance company with the following discounts:

Continued education

Taking driving courses doesn’t just benefit young drivers. Beyond registered driver’s ed classes, fully licensed drivers can enrol in additional courses that can lower their insurance rates.

Defensive Driving courses are designed for adult drivers who have completed their license qualifications. They are courses specifically designed to preserve your driving record. According to the Canada Safety Council, defensive driving is “driving to prevent all types of traffic collisions despite the action of others around you.” Wikipedia also helpfully points to the analogy many people use: “defensive driving is driving as if everyone else on the road is drunk.” Defensive driving teaches a range of driving practices that will help you anticipate risks and take the necessary precautions to avoid them. Imagine driving as a chess game and defensive driving as the method that allows you to see several moves ahead.

Defensive drivers are hugely appealing to the car insurer. Most importantly, the course will theoretically decrease the chances of you being involved in an accident of any kind, avoiding tainting your driving record. This in turn will avoid the insurer having to pay for any repairs or injury beyond your deductible and so, lower the cost of your insurance.

Insurers aren’t the only ones who value defensive driving courses. A lower risk of accidents also means a lower risk of accident-induced personal injury. Let’s say someone is involved in a collision that requires them to take time off work for recovery (or even a court battle). This more dire scenario and its consequent effects on the nation’s productivity is why many companies that require their employees to drive (eg. couriers and taxi services) include defensive driving courses as part of general training. In other words, taking a defensive driving course will not only score you points with your insurer, but also potentially with employers who value your safety and would be negatively impacted by absenteeism.

No claims bonuses (NCB)

In case it’s not clear yet, there are few things auto insurance providers like more than a safe driver. Those who have never been involved with filing any insurance claims are highly favorable clients. For every year you go without making a claim, your NCB goes up. Let’s say the first year you earn a 20% discount, the following year it will go up to 25%. Usually, these insurance discounts are capped at five years.

If you purchase a new car and sell your old one without having made an insurance claim on it, your NCB will roll over to your new vehicle and give you considerably lower insurance premiums. However, if you’re looking to switch insurance providers, it can be easy to lose your NCB in between insurance policies. If you wait more than 90 days after your previous insurance policy expires, you will lose your NCB and effectively have to start over from scratch.

Should you be involved in an accident that requires you to make an insurance claim to your provider, you may also lose your NCB. But: if the accident is decidedly not your fault and deemed to be entirely at the hands of a third party, your insurer might be able to claim a payout with the responsible party’s insurance and minimize the negative impact on your NCB (and your insurance rate).

Pay-as-you-go insurance

This insurance coverage is for those who take using public transport to the next level. If you find yourself using your car for short distances or only on weekends, you might be interested in pay-as-you-go insurance. The system is quite simple: your provider will install a small tracker in your car that calculates how much you are driving. This is known as a telematics device and will send the data to you through an app on your phone. The insurer will then charge you a flat insurance rate which increases according to how much you drive (usually every thousand kilometres). Most pay-as-you-go plans let users driver up to 9000 kilometres per policy. Should you exceed that amount, you will automatically be switched to a more conventional plan.

Drive less

This is a bit counter-intuitive, but driving less really can favourably affect the price of your insurance. Part of an insurer’s promise towards a car owner is in covering certain kinds of repairs in the event of an accident. While a car ages no matter how much you drive it, driving a lot will make it deteriorate faster. The faster your car deteriorates, the more likely you are to get into an accident. So: the more you drive, the more your insurer will anticipate your car getting into an accident and the higher your insurance will be.

The solution is more or less simple: use public transportation as much as you can. While this option is unfortunately not available for all Canadians, those living in cities like Toronto with reliable and relatively expansive public transit should capitalize on it. If you can choose between a thirty minute drive and a 40 minute metro or bus commute, pick the latter! The more you reduce your estimated mileage per year, the more the insurance providers will smile down on you.

Compare car insurance quotes

Enter your postal code and compare rates from over 30 insurance providers!