Canadians tend to be complacent when it comes to their finances. You bank at the same place where you first opened an account. You get your car insurance through the same company year-after-year, blindly accepting their annual increases because it’s a pain to shop around

But the fact is we need to shop around regularly in order to get the best deal. Banks and insurers, in particular, rely on our loyalty and complacence to pass along price increases while their new customers get the good incentives and discounts.

My car insurance comes up for renewal this month and since I’ve been with the same insurance company for several years I decided to shop around and see if I was still getting a good deal. Follow these tips I used to save money on car insurance:

Tips To Save Money On Car Insurance

  1. Shop around – Many people aren’t happy with their insurance rates, but surprisingly they aren’t doing anything about it. The first thing you need to do is shop, and the easiest way to shop now, rather than calling a lot of companies and explaining the same thing to them, is to do it online through a comparison site.
  2. Multiple vehicles – Having multiple vehicles under the same insurer can save you 10% or more on your premiums.
  3. Bundle other policies – Better yet, insure your home with the same company and save up to 10%.
  4. Increase your deductibles – Increasing your deductibles by $250-$500 can reduce your collision and comprehensive costs by 15%-30%. The trade-off is that you are required to pay more for small claims.
  5. Self-Insure the small risks – By increasing your deductibles you avoid unnecessary coverage, and since small claims increase your premiums anyway, filing fewer claims will reduce the chance of your premiums rising in the future. Besides, if you’re an above average driver (who isn’t?) the savings in premiums should more than pay for any claims you might make over the life of your vehicle.
  6. Avoid Collision on older cars – Collision coverage protects damage to your own vehicle, but if your car is worth $2,000 or less, are you really going to salvage it after a major wreck?
  7. Low mileage discount – This might not apply to many people, but I live less than 10 km away from work, and since that is my major daily commute, insurance companies offer a discount for low mileage drivers. This can also apply for your secondary vehicle that perhaps doesn’t get out on the road as often.
  8. Good driving record – Being accident and ticket free over the past 10 years is a great way to save money on car insurance and has saved me between 5%-20% on my premiums. Savings kick-in after 3 accident and ticket free years.
  9. Value of Car – Expensive cars cost more to repair and therefore cost more to insure. Check the insurance rates before you decide to purchase a new car.
  10. Pre-pay your insurance – Most insurance companies will charge you up to 3% to set-up a monthly payment plan. Avoid this by pre-paying your insurance in full at the start of the year.

    Tips To Save Money On Car Insurance

    Annual meeting of the summer tires club

  11. Winter tire discount – Winter tires are not only essential for driving in our harsh winter climate, but most insurance companies offer discounts if you actually use them.
  12. Show your certificate – If you’ve completed a certified driver-training program in the last 3 years you may be entitled to a lower insurance premium.

Final thoughts

I managed to save $300 off our annual premiums just by going through these steps again with our insurance broker this year. We now pay less than $1450 to insure our two vehicles (2013 Sante Fe and 2007 Tucson).

Related: Why I took a cash settlement for the hail damage claim on my vehicle

Readers – Do you have any other tips to save money on car insurance?

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4 Comments

  1. Sean Cooper, Financial Journalist on May 24, 2015 at 2:52 pm

    Great tips, Robb. Just be careful when combining your home and auto insurance that you’re getting the coverage that you need. It’s not worth saving money for less coverage.

  2. Dan @ Our Big Fat Wallet on May 24, 2015 at 3:53 pm

    That pic looks like a complete disaster. Our insurer doesn’t give a discount for winter tires but I still use them and the difference is crazy. Summer tires are a waste of time around here for about 6 months of the year

  3. JMEDY on May 25, 2015 at 9:47 am

    We moved last year to the other side of the same city. My insurance company increased my vehicle insurance (half way through the year term and with no claims) by almost 30% because of the postal code change. Same type of family neighbourhood, same travel area. I objected to my broker then directly to my insurance company. No resolution. I was told that the Ministry sets the insurance rates – so I called the Ministry. Not true! They only approve the rates that the insurance companies request. Then I went to the ombudsman for my insurance company. After all these calls and a couple of emails they finally reduced my insurance back to where it was. On the renewal date, they increased my rate again – the only reason again being my postal code. Moved on to a new insurer. And I’m still waiting for that 15% reduction the Ontario government keeps saying we are suppose to get.

  4. Rob Fitsgerald on June 12, 2015 at 1:15 am

    I added an additional insurance plan for renters insurance and it actually slightly decreased my car insurance.

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