Buying a car? Here’s what you need to know about auto insurance.

Deidre Plotnick August 10, 2020
Woman peering past sales listing on car window to look at car interior.
It’s the law: if you own a car in Canada, you need to have auto insurance. In fact, most car dealers won’t let you drive your car off the lot without insurance. So, before you sign on the dotted line at the dealership, you’ll need to have done your research on what your
auto insurance will cost; doing this may even influence which car you ultimately buy. This is why knowing how insurance companies determine rates and how you could lower yours could be very handy.

Insurance companies look at many factors when calculating premiums.

Without question, a vehicle’s price point is the biggest indicator of how much it will cost to insure. More expensive vehicles cost more to insure because they cost more to repair. But the vehicle price isn’t the only thing insurance companies consider. 

According to the Insurance Bureau of Canada, these factors are also considered in determining rates:

  • The vehicle’s make, model and year
  • Where you live (big cities have higher collision and car theft rates)
  • Your age and gender (the younger the driver, the higher the rate)
  • Your graduated driver’s license level (less experience means higher rate)
  • The driving records of anyone who may be driving the vehicle
  • The car’s anti-theft/safety features

The Institute for Highway Safety ranks different car models for safety. Checking how your desired vehicle rates may not only help validate your decision, but it can also explain your insurance rate.

There are ways you can help lower your auto insurance.

Can you make any of these changes?

  • Take public transit to work and adjust your policy to “pleasure use”
  • Remove high-risk drivers from your policy so you’re not penalized
  • Raise your deductible a bit
  • Increase your liability coverage slightly
  • Insure all household vehicles together for a multi vehicle discount
  • Leverage any clubs/unions you belong to (CAA Members save on auto insurance)
  • Bundle your auto insurance and home insurance (CAA saves you up to 17.5% for
    bundling)
  • Purchase and install winter tires
  • Maintain safe driving habits

Consider a pay-as-you-go insurance payment plan like CAA MyPace™.

CAA MyPace is a payment program that helps you take control of your car insurance costs. It’s a great option if you drive less than 9,000 kms a year, because it allows you to buy auto insurance for only the distance you drive. You simply pay a low base rate, plus your first 1,000 kms. Then, you buy insurance in 1,000 km increments as you need it.

When comparing insurance rates, be sure to compare apples to apples.

Different insurance providers offer different benefits; while one provider’s rate may be slightly higher, the benefits they offer may offset the slight difference. For instance, CAA Insurance1 offers a Forgive and Forget® benefit which helps protect your good driving record by not affecting it after your first at-fault accident.

You’ve put a lot of thought into which car you want to purchase. Now you owe it to yourself to find the right auto insurance for it. Knowing the facts and talking to a licensed CAA Insurance Agent can make the process a lot easier. The sooner you call: 
1-877-222-1717, the sooner you can drive off in that new car!

 

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