Personal finance: Lowering car insurance

(Courtesy Stephanie Chan) Car Insurance tricks.

Car insurance tricks. (Stephanie Chan/Ryersonian staff)

According to Mothers Against Drunk Driving Canada, young people have the highest rate of traffic injury and death per capita among all age groups.

Even though young people are stuck with higher insurance rates until their mid-twenties, there are some tricks that can lower insurance costs beyond the standard discounts that companies offer for driver’s training and good grades.

Makes and models have different rates:

Insurance companies base premiums on a number of factors such as safety features and size. Different models of cars receive different ratings based on how high-risk they are. Models which have more reports of being stolen or in accidents throughout the year will be rated higher and cost more.

Unfortunately, cars popular among the younger crowd (like the Honda Civic, Mazda 3 and Volkswagen Jetta) are some of the most highly-rated models, making it a battle of trade-offs. Though all of the above have cheaper price points, they’ll also force you to cough up your savings on insurance. For cheaper insurance, look instead to the slightly-more-expensive Toyota Camry or Honda Accord, which are less likely to be driven by accident-prone young people.

Another thing to watch out for is that insurance for cheaper two-door coupes will cost more than four-door sedans, as two-door cars are often used in street racing.

Put up more risk:

When you first buy your policy, you’ll be asked how much of a deductible your are willing to pay. That means that if you get into an accident where you’re at fault, there’s a set amount that you’re agreeing to pay out of your own pocket before your insurance company takes care of the rest. Your monthly premiums will be lower if you agree to pay more upfront as your deductible.

The flip-side is that if you do get into an accident, you’re on the hook to pay more. For obvious reasons, higher deductibles work best when you’re a cautious driver.

Get your licence now: 

Since your insurance costs less the more years of driving experience you have, it’s to your advantage to get your full licence as early as possible.

Though company policies will vary, most companies will start counting your years of experience from the point you receive your G2. Some, such as State Farm, will start at G1, while others will hold out until the point you actually buy an insurance policy with them.

Regardless of whether you actually drive in the time between receiving your license and buying your car, those months or years all count. Therefore, get your licence now even if you don’t plan on driving any time soon – you might thank yourself in a few years.


All these tips however won’t take away from the fact that you’ll pay way more than your parents – that’s unavoidable. All anyone can say is tough it out. Your late twenties can’t really be that far away, right?

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