man passing keys to a woman through her car window

Buying a car? Here’s what you need to know about auto insurance

We understand there can be many unanswered questions around car insurance. You know you must purchase it, as it's the law. Auto insurance can be expensive, and the car you end up buying directly impacts your premium. Running through your head can be unanswered questions regarding what's the lowest auto insurance rates? Occasional driver insurance? Car insurance coverage out of the country? Car insurance rates across Canada? Are you insured on someone else's car?

All questions are entirely valid, and you deserve to know the answers. Before you commit to that car or car insurance, CAA has all the questions you want to know answered.

Factors affecting cost of vehicle insurance

Without question, a vehicle’s price point is the biggest indicator of how much it will cost to insure. More expensive vehicles cost more to insure because they cost more to repair or replace. But the vehicle price isn’t the only thing insurance companies consider.

According to the Insurance Bureau of Canada, these factors are also considered in determining rates:

The vehicle’s make, model and year
Where you live (big cities have higher collision and car theft rates)
Your age (the younger the driver, the higher the rate)
Your graduated driver’s license level (less experience means higher rate)
The driving records of anyone who may be driving the vehicle
The car’s anti-theft/safety features
The Institute for Highway Safety ranks different car models for safety. Checking how your desired vehicle rates may not only help validate your decision, but it can also explain your insurance rate.

Frequently Asked Questions

Who can drive my car under my insurance in Ontario?

Anyone with a valid driver's license and your consent is legally permitted to drive your vehicle. Just because they can doesn’t mean they should! You are still liable and responsible for your vehicle.

What happens if someone who isn't on your insurance crashes your car?

If someone else was driving your vehicle and a collision occurs, you are still legally responsible. Any claims for damages by other parties are made against your insurance policy.

Is it cheaper to insure an older car?

Many factors go into calculating your premium, such as car make and model. There are reasons for older cars to have cheaper insurance due to generally being less valuable. Still, older cars can be expensive to insure if they are less common or a specialty make.

What age group pays the most for car insurance?

Statistically, car insurance rates are highest for teenagers. Teenagers typically pay the most for car insurance, because they are considered to be at higher risk of accident likelihood.

What factors may earn you an insurance discount and how can you save on auto insurance?

You can make any of these changes by…

Reduce your mileage and ride frequency plus adjust your policy to "pleasure use"
Be aware of the driving history of the drivers in your household.
Raise your deductible a bit so you have more protection
Increase your liability coverage
Insure all household vehicles together for a multi-vehicle discount
Leverage any clubs/unions you belong to like CAA Members that save on CAA Auto Insurance*
Bundling your auto insurance and home insurance. When you bundle with CAA Insurance you can save up to 12.5% on CAA Home Insurance and 10% on CAA Auto Insurance**
Purchase and install winter tires. CAA Insurance offers a 5% discount on your CAA Auto Insurance premium when you install winter tires on your vehicle***
Maintain safe driving habits and have a record with programs like CAA Connect®, a usage-based insurance program offered by CAA Insurance that uses your personal driving habits to calculate a unique, personalized discount for your insurance*

Do I need to get car insurance for my child?

If your child lives with you and occasionally drives your car, they should be added to your auto insurance policy as an occasional or secondary driver.

Does my adult child need to be on my car insurance?

Only if they are driving your car.

CAA MyPace

CAA MyPace® is an auto insurance payment program that helps you take control of your insurance costs. It’s a great option if you drive less than 12,000¹ km a year, because it allows you to buy auto insurance for only the distance you drive. You simply pay a base rate, plus your first 1,000 kms. Then, you buy insurance in 1,000 km increments as you need it.

Weigh Your Options

Different insurance providers offer different benefits; while one provider’s rate may be slightly higher, the benefits they offer may offset the slight difference. For instance, CAA Insurance offers a Forgive and Forget® benefit which helps protect your good driving record by not affecting it after your first at-fault accident. You’ve put a lot of thought into which car you want to purchase. Now you owe it to yourself to find the right auto insurance for it. Knowing the facts and talking to a licensed CAA Insurance Agent can make the process a lot easier. Call 1-888-900-1251 to start saving on the coverage that fits your needs.

Get a Quote

_{*Auto and Property Insurance are underwritten by CAA Insurance Company. Certain conditions, limitations and underwriting guidelines apply.}

_{**To qualify for the discount you must be a current CAA Member in good standing (CAA Membership dues paid in full by membership expiry date). Discount(s) Subject to certain conditions and approvals. Underwriting eligibility rules apply.}

_{***Underwriting rules apply. Rating applied to vehicles with four (4) winter tires that meet the winter tire designation. Installation no later than November 20 and removed no earlier than April 15.}

_{®/™ CAA trademarks owned by, and use is authorized by, the Canadian Automobile Association.}

_{®Forgive and Forget is a trademark owned by CAA Insurance Company}

_{Vehicle compatibility and enrolment in CAA MyPace payment program is subject to terms and conditions.}