14 Ways to Get Cheaper Car Insurance

TL;DR

Car insurance costs vary widely across Canada, so every driver is looking to save on premiums. The key is to find the right balance between affordability and coverage. Start by comparing quotes from multiple car insurance companies, tailoring your coverage to what you actually need (dropping optional coverages on older cars, for example), and taking advantage of discounts (like bundling home and auto insurance or installing safety features). Maintaining a clean driving record, considering usage-based insurance, and even opting for a higher deductible can all help lower your auto insurance rates – just be sure you still carry the mandatory coverage (liability, accident benefits, etc.) required to protect yourself and others.

Key Takeaways

• Shop Around and Compare: Always get multiple auto insurance quotes and compare insurance providers to find the best auto insurance rates for the coverage you need. In provinces with private insurers, you can pit companies against each other for a better deal. Use online tools or brokers to save time and money.
  
  
• Carry Only Necessary Coverage: Review your auto insurance policy annually and drop any coverage that isn’t cost-effective for you. For example, if your vehicle is older with a low resale value, consider removing optional collision or comprehensive coverage to reduce your premium (since the payout after a car accident might be less than the premiums).
  
  
• Maintain a Clean Record: Safe driving pays off. Avoid accidents and tickets – a clean driving record free of traffic violations and at-fault insurance claims will keep your auto insurance rates low. Conversely, multiple violations or claims will spike your premium (insurers factor in your driving and claim history when setting rates).
  
  
• Seek Discounts and Bundle Policies: Take advantage of every discount available. Many car insurance companies offer lower rates if you bundle policies (for example, combine your home and auto insurance with the same insurer) or if you install safety features like winter tires, alarms, or telematics devices. In Ontario, for instance, installing winter tires can earn you up to a 5% discount on your car insurance premium.
  
  
• Consider Usage-Based Insurance: If you’re a safe or infrequent driver, a usage-based insurance program (telematics) could save you up to 30% on your premium by tracking and rewarding your good driving habits. Just be comfortable with the trade-offs (privacy and potential penalties for hard braking, etc.).
  
  
• Adjust Your Deductible and Payment Plan: Choosing a higher deductible (the amount you pay out of pocket on a claim) can lower your monthly premiums – just ensure you could afford that deductible in an emergency. Likewise, paying your premium annually (or in larger installments) can sometimes earn a discount and will avoid installment fees.
  
  
• Don’t Let Coverage Lapse: Even if you temporarily don’t have a car, try to stay on someone’s policy as an occasional driver. Continuous insurance history with no gaps looks better to insurers and can keep your rates lower in the long run.

Now, let’s dive deeper into the details – including a rundown of affordable insurers in Canada, and 14 concrete tips to help reduce your car insurance costs, followed by explanations of key concepts like full coverage, direct insurance, and buying auto insurance online.

Who Offers the Cheapest Auto Insurance in Canada?

To be clear, it's difficult to pinpoint a single provider as the cheapest across the board, car insurance cost depends on many personal factors (your location, driving record, age, vehicle, etc.). However, some car insurance companies in Canada are known for offering competitive rates or special discounts that might help you save. Below is a list of 10 providers often cited for affordable auto insurance coverage:

• Belairdirect Auto Insurance: Known for affordable rates for drivers with a clean record, plus discounts for safe driving habits (thanks to its telematics program).
  
  
• Intact Auto Insurance: Offers competitive rates for good drivers in low-risk areas, and a range of coverage options. Intact also has a claims service guarantee, which might save you stress (and money) if you ever need to file a claim.
  
  
• Desjardins Auto Insurance: Popular for young drivers and those with multiple vehicles – Desjardins offers discounts for insuring more than one car and has engaging tools for new drivers (like their Ajusto program).
  
  
• TD Auto Insurance: TD Insurance is known for good rates for those with clean driving histories, plus multi-vehicle and multi-product (bundling) discounts. If you already bank with TD, it’s worth getting a quote.
  
  
• The Co-operators: A unique choice especially if you’re part of a co-operative or certain employer/association groups. Members can get lower rates as a perk. They’re also known for good customer service.
  
  
• Aviva Canada Auto Insurance: Aviva offers competitive rates for experienced, claims-free drivers. They provide discounts for bundling policies (e.g., home and auto) and often have partnerships (like with certain employers or alumni groups) for additional savings.
  
  
• Economical Insurance: Economical (including their direct arm, Sonnet) targets tech-savvy consumers with online services. They often have good rates for drivers with good credit and driving records, and they reward customers who insure multiple vehicles.
  
  
• Allstate Auto Insurance: Allstate provides competitive rates for claims-free drivers and offers features like accident forgiveness (to prevent your first at-fault accident from raising your premium). Safe driving and bundling discounts are available as well.
  
  
• RBC Insurance: RBC offers auto insurance through Aviva under the RBC name. They tend to have decent rates for bundling (especially if you have other RBC products). Good drivers with multiple cars or a home+auto bundle can see significant savings.
  
  
• Sonnet Insurance: Sonnet is a fully online insurance company (part of Economical) known for hassle-free quoting and policy management. They often have auto insurance online discounts. Drivers with a good record who prefer a digital experience can get quick quotes and buy coverage directly on Sonnet’s website at competitive prices.
  
  

Keep in mind, the cheapest insurance policy isn’t always the best. A rock-bottom premium might signal minimal coverage or high deductibles that leave you paying more out-of-pocket after an accident. Always balance affordability with adequate protection. Compare insurance providers on factors like coverage options, customer reviews, and claims service, not just price. The goal is a policy that saves you money and provides peace of mind.

(Important Note: The governments of British Columbia, Saskatchewan, and Manitoba have government-run auto insurance. In those provinces, you don’t have the same liberty to shop around among private insurers – your basic coverage is through the public insurer by default. Quebec has a hybrid system: a public insurer covers bodily injury coverage, while property damage coverage is private. If you’re in these provinces, your options for shopping around are more limited, but you can still choose optional coverages and compare any private addons. For BC residents specifically, see our guide on ICBC Insurance Renewal for tips on navigating the public system.)

How to Get Cheaper Auto Insurance

Everyone wants to save on car insurance, and while there’s no single trick, a few smart adjustments can meaningfully lower your premium. Here are 14 practical ways to reduce your auto insurance costs:

1. Get the coverage you actually need
   Car insurance is mandatory, but paying for full coverage car insurance isn’t always necessary. If your vehicle is older or has a low value, you may not need collision or comprehensive coverage. Review your policy at each renewal and make sure your auto insurance coverage reflects your car’s value and how you actually use it.
2. Consider usage-based insurance
   UBI (telematics) rewards safe driving by tracking habits like braking, speed, and distance. Responsible drivers can save up to 30%. Just note that privacy trade-offs exist, and risky driving detected by the device may limit your discount.
3. Shop around and compare rates
   Insurance companies price risk differently, so the same driver can get wildly different quotes. Compare multiple car insurance companies, and look for online discounts, winter tire discounts, and safe-driver savings. In BC, Saskatchewan, and Manitoba, basic insurance is public, but you can still compare optional coverages.
4. Loyalty pays off
   If you stay with one insurer, ask about loyalty discounts or accident forgiveness. They won’t always apply them automatically, sometimes you just need to ask.
5. Good credit helps
   In some provinces, insurers use credit scores to set auto insurance rates. A strong credit score can mean lower premiums, so maintaining good financial habits can indirectly reduce your insurance costs. 
6. Choose a car that’s cheaper to insure
   High-end models, sports cars, and frequently stolen vehicles often come with higher premiums. Cars with strong safety features, good crash ratings, and affordable repair costs are usually cheaper to insure.
7. Drive safe and add safety features
   Avoid tickets and at-fault accidents, and consider features like winter tires, anti-theft systems, or driver-assist technology. Many insurers offer discounts for added safety.
8. Keep a clean driving record
   Tickets, collisions, and insurance claims are some of the biggest rate influencers. Avoid small claims when possible, paying out of pocket can sometimes save you from years of higher premiums.
9. Mind your car’s risk profile
   Beyond safety features, insurers consider theft rates, repair costs, and accident statistics for each vehicle model. Even trim level or engine type can affect your premium.
10. Bundle your insurance
    Bundling home and auto insurance or covering multiple cars with the same insurer can save anywhere from 5% to 25%.
11. Increase your deductible
    Higher deductibles mean lower premiums, just make sure you can comfortably afford the out-of-pocket cost if you need to make a claim.
12. Avoid gaps in your insurance history
    Continuous insurance history helps keep premiums down. If you’re without a car, consider being added as an occasional driver to avoid a lapse.
13. Pay annually when you can
    Many insurers charge fees for monthly payments. Paying your premium in full can lower your total cost and reduce the risk of missed payments.
14. Take a driving course
    Approved driving courses, especially for young or new drivers, often lead to lower premiums and help build long-term safe driving habits.

Full Coverage Car Insurance

“Full coverage” isn’t an official policy type, it simply means your auto insurance includes both the mandatory coverages in your province (liability, accident benefits, uninsured motorist, and in some provinces, direct compensation) plus optional protection for your own vehicle: collision and comprehensive insurance.

• Liability insurance covers injury or property damage you cause to others.
  
  
• Accident benefits help with medical expenses, rehab, and income replacement after a car accident.
  
  
• Uninsured motorist coverage protects you if you’re hit by a driver with no insurance.
  
  
• Direct compensation property damage applies in no-fault provinces. Your own insurer pays for vehicle damage when you’re not at fault.
  
  
• Collision coverage repairs or replaces your car after an at-fault crash or rollover.
  
  
• Comprehensive coverage protects against theft, vandalism, fire, hail, falling objects, and other non-collision losses.
  
  

Full coverage is recommended for newer or financed vehicles because it ensures financial compensation if your car is damaged, whether by a collision, a storm, or theft. But for older, low-value cars, paying for collision or comprehensive may not be cost-effective; you could be paying more in premiums and deductibles than the car is worth.

In short: full coverage protects both other drivers and your own vehicle, but it’s not always necessary. Choose it when the car’s value and your risk tolerance justify the extra cost.

Direct Car Insurance

Direct car insurance means you buy your auto insurance policy straight from an insurer, no broker involved. This can sometimes result in lower auto insurance rates because you’re not paying broker commissions, and many direct insurers offer fast auto insurance quotes online.

Direct insurers also tend to simplify the process:

• Get a car insurance quote online in minutes
  
  
• Customize your car insurance policy on your own
  
  
• Compare prices quickly across multiple car insurance companies
  
  

For drivers who like managing their own personal insurance and prefer transparent pricing, direct car insurance can be a convenient way to control car insurance costs. Just make sure the coverage still fits your needs, especially optional protections like collision, comprehensive, and higher liability limits.

Auto Insurance Online

Buying auto insurance online is one of the easiest ways to compare auto insurance coverage, prices, and discounts across multiple private insurers. Most companies now let you get a car insurance quote or even purchase a full auto insurance policy in just a few minutes.

Online tools make it easy to:

• Compare insurance providers side-by-side
  
  
• Adjust coverage options (liability, collision, comprehensive)
  
  
• See how changes affect your car insurance cost instantly
  
  
• Complete the entire process without phone calls or paperwork
  
  

For drivers in competitive markets like Ontario, Alberta, Nova Scotia, or Prince Edward Island, shopping online can reveal major price differences between insurers. It’s also helpful if you drive personal vehicles, use borrowed cars, or need specialty coverage such as a commercial auto insurance policy.

Bottom line: getting auto insurance online saves time, makes comparison simple, and often results in better pricing, especially if you’re aiming to lower your premium.

FAQ

What is full coverage car insurance?
It’s not a formal policy, “full coverage” simply means you have all mandatory coverage plus collision and comprehensive insurance to protect your own vehicle. It’s useful for newer or financed cars but not always cost-effective for older ones.

Which car insurance coverages are mandatory?
All provinces require liability insurance, and most require accident benefits and uninsured motorist coverage. No-fault provinces also include direct compensation for vehicle damage. Collision and comprehensive are optional.

What’s the difference between collision and comprehensive?
Collision insurance covers damage from crashes or rollovers.
Comprehensive coverage protects against theft, vandalism, fire, weather, and other non-collision losses.

Will making a claim increase my premium?
At-fault claims usually increase your auto insurance rates for several years. Comprehensive claims (theft, hail, etc.) may not affect pricing as much. Avoid small claims when possible to protect your record.

Do I need special insurance for Uber, Lyft, or taxi services?
Yes. Personal policies don’t cover paid driving. Rideshare drivers need a specific endorsement; full-time drivers need a commercial auto insurance policy.

What if someone else drives my car and crashes it?
Insurance generally follows the car, not the driver. Your car insurance policy usually pays the claim, and your premium may be affected. Only lend your car to people you trust.

How can new drivers get lower rates?
Take a certified driving course, choose a safe car, compare quotes online, consider usage-based insurance, and keep a clean record.

People Also Ask

Is no-fault car insurance cheaper?
Not necessarily. No-fault simply means you deal with your own insurer for claim payments after a car accident. It doesn’t guarantee a lower premium.

Does full coverage include comprehensive and collision?
Yes. Full coverage generally means liability + accident benefits + collision + comprehensive car insurance.

What affects my car insurance cost the most?
Your driving record, location, vehicle type, insurance claims history, and selected auto insurance coverage have the biggest impact.

Can I get car insurance for a borrowed car?
The owner’s policy usually covers a borrowed car, but optional endorsements may be needed depending on use.

Do safety features lower insurance rates?
Yes. Features like anti-theft systems, collision avoidance, and winter tires can reduce your premium because they lower the risk of vehicle damage.

Related Prompts

• “List 5 factors that most influence auto insurance rates and explain how each can increase or decrease your premium.”
  
  
• “Compare and contrast comprehensive car insurance vs. collision insurance, and give examples of claims covered by each.”
  
  
• “Explain the concept of no-fault car insurance in simple terms, and outline which provinces use a no-fault system.”
  
  
• “As an insurance advisor, provide tips for a new driver in Ontario to reduce their car insurance cost.”
  
  
• “Walk me through the steps of filing an auto insurance claim after a car accident, and how it might affect my policy renewal.”