10+ Ways To Get Cheaper Car Insurance Rates

10+ ways to get the cheapest car insurance rates. Common discounts to save on auto insurance. Tips for young drivers. Factors that car insurance quotes

Saving on car insurance can be tricky. There are simply some factors that are beyond your control, such as where you live, your age, gender and so on. Nevertheless, there are still some opportunities to get cheap insurance by making informed decisions.

So if you want to save some money on your car insurance, here are some tips to get you started:

Tips To Save On Car Insurance

#1. Know Your Specific Insurance Needs

You can lower your insurance premiums by making informed decisions about the type of insurance you need. Do you really need those additional optional coverage like collision and comprehensive coverage?

If you drive an old vehicle, you probably don’t need a collision coverage. Dropping it will save you some cash.

#2. Take A Driving Course

If you’re a new driver, consider taking a driving course to lower your auto insurance cost. It could get you some discount from your insurer. So check with your insurer if they have this discount.

But beyond any discount you may get, a good driving course will make you a better and safer driver and help you build a clean driving record.

#3. Always Pay Your Premium On Time

Never miss a payment. Make sure your account has enough money to fund the cheque or pre-authorized payment you’ve set for your monthly payments. Not paying your insurance premium on time can cost you in the following ways:

  • You auto insurance may be cancelled automatically. And getting a new one can be costly, or even worse if you get into an accident before you get a new insurance.
  • You may be classified as “higher risk” and be required to pay higher premiums and not given the option to pay monthly.

#4. Bundle Your Car Insurance

You may be able to get better auto insurance rates if you bundle your auto insurance with other insurance, for example a home insurance or insuring more than one car.

#5. Ask About Discounts

Always ask your insurance company about discount that may be relevant to you. Are you a member of a professional body or other groups? You may be able to get some discounts for your affiliation with them. For example, TD insurance has a group rate for CPA Ontario members on auto insurance.

Check below for some of the common discounts you may be able to get from your insurer.

#6. Shop Around And Compare Auto Insurance Quotes

Like many financial products and services, it pays to shop around for the best car insurance quotes. Get different quotes and compare them before making a commitment.

Make sure you’re comparing like with like though. Know the coverage and what losses are covered by each of the insurers.

#7. Consider insurance before you decide on a car to buy

Your car maker, model and production year are some of the factors considered when insurers calculate your premium. Some cars are easier to steal and more attractive to criminals – for example, 8 of the top 10 most stolen cars in Canada for 2019 are Ford 350s.

Also, the less expensive the car is to repair, the lower you’ll pay in premium. So consider this before you choose a car to buy.

#8. Choose A Higher Deductible

All things being equal, the higher the deductible on your insurance, the lower the premium should be. The deductible is the amount you have to pay out-of-pocket when you when a claim.

With a higher deductible, you’ll be paying more if you’re involved in an accident but you will get a discount on the premium you have to pay.

#9. Build A Clean Driving Record

Unsurprisingly, the longer and cleaner your driving history, the lower your auto insurance premiums will be.

Of course, accidents happen but always drive carefully and obey traffic laws to minimize at-fault collisions.

Here are some tips:

  • Don’t drink and drive
  • Use your seat belts
  • Don’t use your phone while driving
  • Don’t overspeed or go above the speed limit
  • Obey traffic signs

The traffic laws are there to protect you, but they can also save you some insurance costs.

#10. Wait till renewal time to switch your insurance company

If you get a better deal from another insurer and decide to switch, check for any penalties for cancellation first.

Compare the penalty you will have to pay against what you’ll be saving by switching. If it’s not worth it, then wait till renewal time before switching.

#11. Let the insurer know what you use the car for

Insurance premiums are affected by how you drive your car and the distance. Driving to work will cost more than driving for pleasure.

If possible, consider take public transit to work and only drive for pleasure. And be sure to inform your insurance company of any change in how you drive.

#12. Install Telematics

You may be able to get a cheaper insurance by installing telematics in your car. This is because telematics encourages safer driving. The app or device will track the distance you drive as well as some driving behaviours like how you speed, turn or brake.

Specific Tips For Young Drivers

Younger drivers should consider the following tips to get cheaper auto insurance:

  1. Piggyback on your parent’s insurance to gain some experience. You’ll pay higher premiums as a young principal driver than if you are an occasional driver under your parent’s insurance policy
  2. Ask about student’s discount. If you have good grades, you may qualify for student’s discount. Ask your insurer if they have such a program.
  3. Take a recognized driving course by your insurance company.

Some Auto Insurance Discounts that can save you some money

  1. Mature driver discount: older drivers with good driving history
  2. Retiree discount
  3. Multi-policy discount: for example, when you purchase your car insurance and your home insurance with the same insurance company
  4. Multi-vehicle discount
  5. Renewal discount
  6. Winter tires discount
  7. Driver training discount
  8. Graduated license discount
  9. Group discounts or rates
  10. Discount for extra safety features

Factors that Affect Your Car Insurance Rates

Here are some of the things insurance companies consider when calculating your insurance premium:

  1. Age and Gender
  2. Where you live: bigger cities will usually be more expensive because of population density. All things being equal, with fewer cars on the road in smaller cities, the rate of accident will be lower.
  3. The car you drive: that is the make, model and year.
  4. Your car’s safety features
  5. Your driving history
  6. How often you drive and what you use the car for: work or pressure
  7. Your level in a graduated driver licensing system. For example, a person with full G driver’s license in Ontario will pay a lower premium than someone with a G1 license.

Other Security Tips for Car Owners

In many cases, criminals are opportunistic. So in addition to buying a car with good security features or installing one, you should also not give them any reason to target your car or make it easier for them. Here are 7 tips to keep your car safe:

  • Always lock your car and roll up the windows
  • Park in a well-lit and secure area
  • Never leave valuables in plain view
  • Install a car alarm
  • Use a car immobilizer
  • Install a car tracking system
  • Fit a steering wheel lock and brake lock

Final Thoughts

Car insurance can be expensive, but with some careful planning and informed decisions, you can save yourself some cash.

So try some of the tips above to get cheaper car insurance.

Simon is a CPA by day and a Personal Finance Blogger by night. With over a decade experience in financial services, he's passionate about personal finance, investing and helping people take control of their financial life.

Leave a Comment