How Much Is Insurance for a New Driver? (Auto Premiums by Province)
Finding affordable car insurance in Canada can be difficult, especially if you’re a young driver. Unfortunately, statistics reveal that young drivers have more car accidents due to a lack of experience.
But how much do teenage drivers pay for car insurance? In this article, I’ll break down the provincial average and examine the many factors that affect car insurance premiums. I’ll also show you some ways that young drivers can lower their auto insurance premiums.
Average Car Insurance Cost, by Province
The table below lists the average cost of auto insurance for young drivers in Canada by province. While the rates for 16-19 years olds seem very high, remember that this is an average. Many young drivers will pay far less than the amounts shown below, and some will pay more, depending on where they live, their driving record, vehicle type, etc.
You should contact an auto insurer in your home province for a more precise figure.
Average Insurance Cost, by Province, Age, and Gender
|Average (All Ages)||16-19 Male||16-19 Female||20-25 Male||20-25 Female|
|Newfoundland & Labrador||$1,168||$6,167||$5,714||$1,974||$1,829|
|Prince Edward Island||$861||$4,546||$4,212||$1,455||$1,348|
Average car insurance rates by province: Insurance Bureau of Canada, 2017-2020
Average car insurance cost by age and gender: ThinkInsure, 2020
Auto Insurance Rates: Contributing Factors
There are several factors auto insurers use to determine car insurance rates, but they will vary by province. Below is a list of the most common factors. Note that each province has its own criteria to determine auto insurance rates.
Year, Make, and Model of Vehicle
Auto insurers analyze historical claim data to determine which vehicles are most likely to be involved in a claim. Claims can include accidents, theft, etc. While you may think a new vehicle would be more expensive to insure than an older model, that’s not necessarily the case. Because older cars often have fewer safety and theft protection features, insurance rates can be similar to what you would pay for a new vehicle.
Where You Live
Claim rates are typically much higher in urban areas due to high traffic volumes on the roadways and increased vehicle theft rates. As a result, it usually costs more to insure a vehicle if you live in a city versus a rural area.
How Your Vehicle is Used
When you insure your car, you’ll be asked whether its primary use is for work or pleasure. In other words, do you use the vehicle to commute to and from work most days of the week or use the vehicle for pleasure? You will pay higher rates if you use the car to travel to and from work.
Driver Age and Gender
In many jurisdictions, young drivers pay higher car insurance premiums than older drivers. This is for obvious reasons, as younger, less experienced drivers are considered a higher risk for accidents and claims.
In some provinces, gender plays a role in average car insurance costs. Because males are considered at higher risk for claims, they will pay more for car insurance than females; however, it’s not the case in every province.
Your Driving Record
Insurance providers often reward drivers with a clean driving record with lower insurance rates. In Manitoba, for example, drivers with the highest driver safety rating (15-17) receive a 40% vehicle premium discount. Conversely, drivers with poor records will see their car insurance premiums increase. It takes several years of clean driving to attain the maximum discount.
Ways to Lower Your Insurance Premiums
New and young drivers pay much higher insurance premiums in most Canadian provinces. But while the factors determining car insurance cost vary by province, there are several things you can do to make your car insurance rates more affordable. A few of these money-saving tips work for other types of insurance, too.
- Choose a higher deductible. An insurance deductible is an amount you pay out of pocket before the insurance coverage kicks in. The lower the deductible, the higher your insurance premiums. You can choose a higher deductible, say $500 vs. $200, to lower your premium.
- Register as a secondary driver. In some provinces, a young driver may be able to register as a secondary or occasional driver behind one of their parents. This can reduce the cost of car insurance.
- Pay the premium annually. Most auto insurers allow you to pay the annual premium upfront or in monthly installments from your bank account. The installment option usually incurs interest charges (it’s considered a form of financing), so you will pay more over the entire year. If you can, pay the annual premium in one lump sum. Of course, don’t borrow from your credit card to make the payment, as the credit card interest will be much higher than what you would pay on a monthly installment plan.
- Request a student discount. In some provinces, young drivers may qualify for a student discount. Ask your auto insurer if this is an option.
- Don’t over-insure. It’s possible to purchase more insurance coverage than you need. Review your policy and ensure you’re not paying for coverage you won’t use. A few examples include paying more for a super-low deductible, loss-of-use, or insuring the car for work when it’s only used for pleasure.
- Consider a different model of car. If you’re in the market for a new car, check the insurance premiums for different makes and models. If you purchase a vehicle with a high insurance premium, your ownership costs could increase significantly for several years. Some cars and trucks are much more expensive to insure for various reasons.
Cheapest Cars to Insure in Canada
While this list is sure to change each year, here are the cheapest cars to insure in Canada, according to Arc Insurance (Jan 2022)
- 2009 Dodge Journey
- 2011 Ford F150
- 2010 Toyota Matrix
- 2011 Chevrolet Cruze
- 2015 Volkswagen Golf
- 2006 Toyota Corolla
- 2013 Ford F150
- 2011 Dodge Grand Caravan
- 2008 Dodge Grand Caravan
While this might not be true in every province, it’s an interesting list. A couple of models show up multiple times (Ford F150 and the Dodge Grand Caravan), and the Toyota Matrix and Toyota Corolla are very similar vehicles. Most of these vehicles are affordable, and parts are readily available and cheap to replace. This is likely one of the reasons for the lower insurance cost.
What Are the Most Expensive Cars to Insure?
According to Brokerlink, the following vehicles are the most expensive to insure in Canada’s most populous province, Ontario. While the list may differ in other provinces, it’s probably very similar.
- Maserati Quattroporte
- Maserati Quattroporte Modena Q4
- BMW M8 Competition Grand Coupe
- Porsche Panamera Turbo S E-Hybrid Executive
- Audi RS E-Tron GT
Why is car insurance expensive for first-time drivers?
Statistics show that new drivers are more likely to be in an accident due to their lack of experience and propensity for high-risk behaviours, like driving under the influence or texting and driving. Driving is a skill that takes several years to develop, especially in a country like Canada, where you must also learn to master winter driving conditions.
At what age is car insurance most expensive?
As you can see from the table above, male and female drivers between 16-19 years of age pay the highest car insurance premiums in Canada, with driving experience (or lack thereof) being the primary factor. Male drivers pay slightly more than female drivers on average.
Are new cars more expensive to insure?
Generally speaking, new cars are more expensive to insure than older vehicles. However, most new vehicles are equipped with advanced safety features and the latest anti-theft systems, which can make them cheaper to insure.
Final Thoughts on Auto Insurance Rates
Many young drivers experience increased freedom when they obtain their driver’s licenses. But the high cost of car insurance can be downright frustrating, depending on where you live. Thankfully, there are some steps you can take to lower your auto insurance premiums. Speak with your auto insurer and take time to consider your options.