How to Save on Car Insurance
You can save on car insurance quickly by comparing quotes and reviewing your coverage with the help of a broker, bundling home and auto insurance, finding a group discount, or increasing your deductible.
You can use multiple strategies at once to maximize your savings. For instance, reducing your annual mileage from 15,000 to 5,000 or fewer kilometres per year could save you an average of $13/month if you stay with the same insurer, but reducing your mileage and switching to an insurer with a better low-mileage discount could increase your savings by $145/month. (Note: Never intentionally misrepresent your mileage as this can result in claim denial.)
7 ways to save on car insurance without reducing your coverage
Always start by looking for discounts and other savings opportunities that don’t reduce the amount of coverage on your policy. Optimize your price before touching your coverage.
1. Compare car insurance quotes
Average savings: $71/month
Maximum savings: $136/month
Why it works: Insurers use different pricing models for the same risk factors, so prices vary significantly for the same driver and vehicle.
Comparing at least three car insurance quotes is the most effective savings strategy for most Canadians. You could reduce your auto insurance premium by an average of 30% by switching to a new insurance provider.
Insurers use proprietary pricing models that are updated regularly to reflect market shifts and insurer priorities. Your own risk profile may change over time as you gain driving experience, maintain a clean driving record, and change vehicles, location, or household details.
You could save up to $1,632 per year by comparing car insurance quotes and switching to a new insurer.
2. Bundle your home and auto insurance
Average savings: $27/month
Maximum savings: $38/month
Why it works: Insurers save money on customers with multiple policies.
If you own a home and a car, bundling your home and auto insurance is the simplest way to reduce costs on both policies. A multi-policy discount for auto and home insurance typically saves drivers around 15% on car insurance, with added savings for home insurance.
If you don’t own a house, you may still be able to save with a bundle for auto and tenant insurance or auto and condo insurance. These discounts are typically smaller; expect savings closer to 5–10%.
You could save up to $456 per year by bundling auto and home insurance.
3. Switch insurers after a claim or ticket
Average savings: $120/month (claim) or $84/month (ticket)
Maximum savings: $330/month (claim) or $170/month (ticket)
Why it works: Some insurers issue smaller penalties to drivers with past claims or tickets.
If your rates are high due to a single at-fault accident or driving conviction, exploring other insurance companies could save you as much as 58% on future premiums.
Some insurers, such as CAA, strictly prioritize drivers who can show an accident-free record over many years. If you have a ticket or claim while insured with a low-risk carrier, you might see a sharp increase in your premium. Switching to a provider with a better appetite for risk or shorter look-back period, such as Allstate or Aviva, could mean significant savings.
You could save up to $2,000–$3,900 per year by exploring a switch to a new insurer after an at-fault accident claim or driving conviction.
4. Install an anti-theft device
Average savings: $14/month
Maximum savings: $42/month
Why it works: An approved anti-theft device reduces the risk of theft claims.
Anti-theft security and recovery systems like the TAG system earn discounts from most insurers in Canada, especially in areas that have recently seen a spike in auto thefts. You could earn a discount for:
- A tracking system (e.g., TAG) that helps officials recover stolen vehicles
- An aftermarket engine immobilizer that prevents theft
- A GPS tracker or alarm that alerts you or authorities of unauthorized movement of your vehicle
- VIN etching on your windows or catalytic converter that make stolen vehicles and parts harder to sell
In some cases, these measures could earn you an anti-theft discount, typically no greater than 5% off your premium. In other cases, adding the anti-theft system simply removes a surcharge added to your policy, particularly if you have a vehicle that’s frequently stolen such as a Toyota RAV4 or a Ford F-150.
You could save up to $504/year by installing an approved anti-theft system in your vehicle.
5. Ask about group discounts
If you belong to a professional organization, employee group, alumni association, or other formal group, you may be eligible for a preferred rate from a number of Canadian insurers. Group discounts for auto insurance typically save customers 5–15% on premiums.
Insurers offering group discounts may include:
You could save an average of $72 per year by raising a $500 all perils deductible to $1,000, or $164 per year by raising a $1,000 deductible to $5,000.
6. Equip winter tires every year
Average savings: 3%
Maximum savings: 5%
Why it works: All Ontario insurers are required to give discounts to customers who install winter tires during the winter season.
If you install winter tires on your vehicle each year between March and December (or the dates specified by your insurer), every car insurance company in Ontario is legally required to offer a discount on your premium. Winter tire discounts are typically between 2% and 5% off your total base premium.
7. Check for other discounts
Whenever you shop for car insurance, ask your broker or advisor about other discounts you may be eligible for. Common car insurance discounts include:
- Multi-vehicle discounts for policies that cover more than one vehicle
- Good driver discounts for drivers who maintain a clean record or complete a defensive driving course
- Driver training discounts for new drivers who take an approved driver training course
- Student discounts for full-time high school, college, or university students, including extra savings for students away at school
4 ways to lower your premium that involve a tradeoff
If you’re willing to take on a little more risk, the savings strategies outlined below could reduce your premium even further.
1. Choose a higher deductible
Average savings: $5–$15/month
Maximum savings: $29/month
Why it works: With a higher deductible, you take on a larger share of the financial risk associated with accidents, reducing the burden on your insurer.
One of the simplest ways to lower car insurance premiums is to increase your deductible. Car insurance deductibles typically range from $250 to $5,000 or more, but $500 and $1,000 are the most common options.
Raising your deductible from $500 to $1,000 could save you an average of $6/month on a standard all-perils car insurance policy. If you’re willing to take on even more risk, a $5,000 deductible could save you $14/month compared with a $1,000 deductible. Savings increase with higher deductibles, such as $10,000, but deductibles this high essentially reduce your policy to a last-resort safety net for total losses.
Remember that you must pay your deductible to use your insurance coverage to pay for repairs after a crash. Never choose a deductible that’s higher than you could realistically afford to pay.
You could save an average of $72 per year by raising a $500 all perils deductible to $1,000, or $164 per year by raising a $1,000 deductible to $5,000.
2. Reduce optional coverage
Every driver should review their auto insurance coverage annually to make sure it still meets their needs and fits their budget. Reducing coverage you don’t need could save you anywhere from a few dollars per month to hundreds of dollars per year.
Under Ontario provincial law, all car insurance coverage is optional except for third-party liability coverage, uninsured automobile coverage, and medical, rehabilitation, and attendant care accident benefits.
The following coverage may be optional:
- Collision or upset coverage
- Comprehensive coverage
- All perils coverage
- Specified perils coverage
- All accident benefits except for medical, rehabilitation, and attendant care
- Transportation replacement coverage
- Accident forgiveness
A licensed insurance broker can help you determine which parts of your policy, such as collision and comprehensive coverage, are actually needed and which optional add-ons may not be worth the extra cost. They can help you adjust coverage limits to match your needs and budget.
If you have an active auto loan or lease, you’re likely required by your lender contract to maintain collision and comprehensive coverage. Never drop coverage without consulting a licensed insurance advisor.
3. Enrol in usage-based insurance (UBI)
Average savings: $17/month (initial discount only)
Maximum savings: $25/month (initial discount only)
Why it works: Usage-based insurance tailors your premium to how you actually drive, so safe drivers can significantly reduce rates.
Usage-based insurance (UBI) programs use telematics technology to track driving habits in real time and offer discounts based on how you actually drive, not just the driving habits associated with your demographic. If you routinely drive safely, a UBI discount could save you as much as 35% on auto insurance premiums.
There’s a catch, though: many UBI programs also issue surcharges, some as high as 20%, for drivers who log unsafe activity. Sensitive app technology can detect unsafe driving habits like hard braking or acceleration even in habitually safe drivers, so there’s a high degree of risk associated with enrolling in these programs.
You could save as much as $300 in a year simply by enrolling in usage-based insurance, but long-term telematics discounts may be higher or lower, and some drivers can acquire a surcharge instead of a discount.
4. List a high-risk driver as an occasional or excluded driver
If your car insurance premiums are high due to a household member with limited driving experience or a history of crashes and tickets, you can list them as an occasional driver or fill out an OPCF endorsement form to exclude them from your car insurance entirely.
Using an OPCF form to exclude a driver on your policy allows your insurance company to price your coverage as though the high-risk driver was not in your household. However, in order to qualify, you’ll need to ensure that the driver follows all requirements for the endorsement. If you exclude a driver from your policy, they can never drive your vehicle—not even to pick up milk from the corner shop or drive you to the hospital.
What affects how much you pay for car insurance?
In addition to the discount factors outlined above, the amount you pay for car insurance depends on your location, your vehicle, and your age.
- Location: Insurers look at accident rates, vehicle theft, and other risk factors in your postal code. If the risk goes up in your area, so will your car insurance premiums.
- Vehicle: Insurers analyze both the frequency and severity of different types of insurance claims (e.g., accident benefits or comprehensive claims) for your make and model of vehicle. A high frequency or severity index can drive your premium up.
- Age: Age is a proxy for driving experience in many insurers’ pricing models. Young drivers or those with limited driving history pay the highest rates for insurance due to a higher risk of at-fault accidents.
While these factors aren’t as easy to change as your deductible or your coverage selections, keep them in mind during major life changes.
Keep insurance rates in mind when moving to a new home, neighbourhood, or city. Review your policy with an insurance broker in your new location to make sure your coverage and price are still appropriate.
Look up the insurance claim statistics published by the Insurance Bureau of Canada to understand whether it’s likely to carry higher auto insurance premiums.
The cheapest cars to insure in Canada tend to be small or mid-sized SUVs and pickup trucks with low theft rates, excellent safety ratings, and small engines (e.g. 4-cylinder). Hybrid and electric vehicles may be eligible for extra discounts. Large trucks, sports cars, and luxury vehicles are all likely to carry steep premiums, especially for young drivers.
When young adults move out of their parents’ home and get their own insurance for the first time, the financial blow can be eye-opening. Most Canadians see their auto insurance premiums drop around age 25; if you’re paying high rates, use smart strategies to manage your premiums until you age out of the high-risk inexperienced category.
Is switching car insurance companies worth it?
Switching to a new insurance company every few years may earn you repeated discounts in the form of introductory rates, saving you money on car insurance over time. Many of the largest car insurance discounts can be increased if you switch to a new insurer at the same time.
On the other hand, drivers who stay with the same insurer for multiple years may begin earning annual renewal discounts that increase over time to as much as 5% off your policy per year.
It’s a good idea to compare quotes at least once a year when your policy is up for renewal to find out whether there’s a better rate available for the same coverage.
- Switch if: You find a quote that would significantly reduce your premium without cutting coverage
- Stay where you are if: You’re already paying the best rate (or close to it) and you’re satisfied with your current coverage and service
FAQ: How to save on car insurance
This article is for general information only and is not insurance or legal advice. Examples and any sample quotes or rate ranges are illustrative and do not constitute an offer or guarantee of coverage, price, or eligibility. Actual coverage, discounts, and premiums depend on your individual circumstances and the insurer provider; if there is any discrepancy, your policy and insurer documentation govern. For advice about your situation, speak with one of our licensed insurance professionals.