35 Ideas How to Reduce Your Car Insurance Premiums

Did you just get your driving license and are looking for a new car? Perhaps you already have one but you are unhappy with your insurance premiums. Owning a car means getting an insurance policy and paying high monthly premiums. In Ontario drivers pay, on average, approximately $1,900 a year in car insurance premiums. In British Columbia and Alberta, drivers pay close to $1,400 per year. If you are a young driver, your rates may reach approximately $2,800 in Ontario, $1,900 in Alberta, and $1,800 in British Columbia. However there are several ways to save on your auto insurance premiums. Here is an extensive list of ideas how to save on car insurance:

Savings Opportunity #1: Car

1.Car Make and Model:  Some cars, like Toyota Camry, Acura MDX, Toyota RAV4, and Honda Civic, are expensive to insure due to a history of theft and accident claims associated with these brands.

2.Winter Tires: In Ontario, a winter tire discount is mandatory. You can decrease your car insurance rates by simply putting winter tires on your vehicle since, in the eyes of your insurer, you are less likely to get into an accident.

3.Workshop Costs: Some vehicles are more expensive when it comes to repairs. An hour of repair work on a BMW car costs significantly more than an hour of repairs for a Ford. Parts for luxury vehicles are also more expensive than their more modest counterparts.

4.Anti-theft Device: Installing a certified anti-theft system in your car lowers the risk of theft and often results in lower insurance rates.

5.Going Hybrid or Electric: Choosing a hybrid or electric car will definitely save you gas money. It can also help to reduce your insurance rates since some insurers offer a hybrid discount.

6.Pay-As-You-Drive: Several insurers, such as Desjardins Insurance and Industrial Alliance, allow you to install a device in your car that tracks your driving habits. Your insurance premiums will be adjusted based on how you drive. Those who drive safely enjoy lower insurance rates.

Savings Opportunity #2: Driver:

7.Getting Older: As long as you maintain a good driving record, your premiums will go down as you age. Insurers see adults as more responsible than teenage drivers and reward them with lower premiums.

8.Becoming a Senior: Senior drivers have plenty of experience, and therefore have much lower premiums. Some insurers, such as Grey Power, focus on providing insurance specifically for seniors. 

9.Good Students: Statefarm and some other insurers provide discounts to honor roll students, rewarding them for their hard work and responsible ways.

10.Shop Around: The power of the Internet is at your fingertips! Compare different insurance companies by using online tools. You’ll discover similar – or even the same – policy for different prices. Competition is fierce due to the high number of insurance providers and if you shop around, you’ll benefit from the variety of prices. Also consider speaking with an insurance broker that will shop the market for you and find the best price and policy for your needs.

11.Loyalty: Once you find an insurer you are happy with, stick with them for the long term. Many companies offer loyalty discounts.

12.Annual vs. Monthly Payments: Convenience always comes at a cost, including how you pay for your insurance. By choosing one annual payment over monthly payments, you save on administration and processing fees. Consider putting money aside so you can pay your insurance in one lump sum.

13.Various membership: Your professional memberships are good for networking, but they can save you money on insurance too! Associations in organizations such as Certified Management Accountants of Canada, The Air Canada Pilots Association, and CAA can qualify you for savings. Check with your insurer to see if your memberships apply.

14.Alumni: Several Canadian universities, including the University of Toronto and McGill University, are affiliated with insurance groups that offer discounts to alumni. Check to see if your school is included. 

15.Students: It’s not just post-secondary students that can get an insurance break. Your high school, trade or technical school may be affiliated with insurance providers.

16.Driving Course: Some driver’s training courses are recognized by insurers, giving you a discount for successful completion of the course. Driver’s training is always a good idea, discount or not, especially for those that will be driving in snow and/or heavy traffic.

17.Being a Second Driver: Don’t drive every day? If you share a vehicle with someone and only drive occasionally, you’ll save money by being added as a second driver on their policy instead of having a full policy of your own.

18.Claim History: Claims can increase your premium. There are times when it is simply not worth it to make a claim, especially if you have a high deductible and the claim is really small (e.g. dents, scratches). If you are not sure if you should make a claim, speak with your insurer (ideally anonymously) to help you weigh the pros and cons.

19.Being Married: In most provinces (but not all) your marital status can count towards a discount on your car insurance. If you are married or in a common law relationship, save even more by combining your home, auto and other insurance policies with one provider. 

20.Disabilities: If you suffer from a disability, speak with your insurance provider. You may receive a discount.

21.Improving Your Driving Record: Feel the need to speed? Reconsider. It takes three years for demerits to be expunged from your driving record. The longer you keep your driving record clean, the less you’ll pay in premiums.

22.Retiree Discounts: Retired? Many companies offer retirees discounts.

23.Women pay less than men: Yes, that is true – women pay less in car insurance rates because they are less likely to cause a heavy accident

Savings Opportunity #3: Dwelling and Parking


24.Postal code: Ontario has some of the highest car insurance rates in Canada. Remember that rates vary greatly among each province but also within single locations. Consider this if you are thinking about moving.

25.Short Distance to Work: Shorter commutes mean smaller premiums. When looking for a place to live, consider moving closer to work.

26.Private Garage: A garage is safer than parking on the street. For reducing your risk of theft and vandalism by parking in a garage, your insurance company may rewarded you with a smaller premium.

Savings Opportunity #4: Insurance Policy

27.Minimal Coverage: You don’t need full coverage on an old car that will cost more than its value to fix or replace. If your vehicle is several years old, consider liability-only coverage (you might also want to add accident benefits). Liability is the minimum coverage required by law since this is the policy that protects you in at-fault accidents. While damage to your car would not be covered, you will have a much smaller monthly payment. We would recommend though to consider higher liability limits (e.g. $1M, $2M or higher) since mandatory limits are often too low if you face costly claims / litigations.

28.Car Insurance Deductibles: The higher your deductible, the lower your premium – but only take this step if you are an experienced driver that can afford a sudden out-of-pocket expense of $1,000 or more.

29.Direct Insurers: Some agents, such as brokers, collect commission for each policy they sell. You can get a lower premium by purchasing from direct insurers. Note, however, that direct providers may not have access to the same range of products that a broker can provide.

30.Drop the Glass Coverage: Is your windshield inexpensive to replace? If so, forgo the glass coverage and take care of it yourself if your windows or windshield are damaged.

31.Bundle – Home and Auto Insurance Policies: Get a discount by bundling all your insurance products with one provider. Car, home, life, ATV, boat – the more you bundle, the more you can save.

32.Bundle – Multiple Car Insurance Policies: Most families have more than one vehicle. Bundle them with the same insurance company to save money on your policy.

33.Welcome Discount: Ready to switch insurance companies? Look for one with a welcome discount.

34.Rental Car Rider: Renting a car can cost you $20/day. Adding a rental car rider to your policy will only cost you around $30 a year. If you rent frequently, talk to your insurer about a rental rider.

35.Leverage Rental Car Coverage: If you have a rental rider, you may not need the collision damage waiver offered at the rental office. Frequent renters should leverage their rental riders to save money.

If you are looking for ways to save on your insurance, we hope these tips will help you to decrease your car insurance costs while also teaching you more about auto insurance.


These tips and savings ideas have been shared by InsurEye, a leading Canadian platform for consumer insurance reviews, offering cheap car insurance quotes. InsurEye also educates senior Canadians and people with pre-existing health conditions about insurance offering no medical life insurance quotes  through its online platform NoMedicalLifeInsurance.