How much is car insurance for a new driver per month?
9 minute read Published on Oct 1, 2024 by BrokerLink Communications
Unfortunately, as a new driver, you’ll have some of the most expensive insurance premiums on the market. This is true across the country. In turn, young drivers have to wait for years until their rates go down, and if you live in a big city, your rates will be even higher. You can’t change this, but knowing how much your car insurance rates are each month will allow you to budget appropriately and have enough money left over to do the things you enjoy.
Insurance rates vary depending on several factors, including demographics, location, and driving experience. While it’s impossible to put an exact number on your monthly insurance costs, we can provide some examples. How much is car insurance per month in Ontario? In Ontario, annual premiums for young females range from $3,275 to $5,198 and $3,751 to $7,280 for young male drivers. It’s time to discuss monthly insurance rates for young drivers in depth.
Why auto insurance is expensive for young and new drivers
There are several reasons why auto insurance premiums cost more for young, recently-licenced drivers. The main reason is the amount of risk. When you’re a new driver, you have less experience and knowledge of the road than someone who has been driving for years. This alone increases the risk of you being involved in an accident and increases your insurance premiums.
Teenagers are more likely to be involved in car accidents and have a higher percentage of injuries as a result of driving-related incidents. MADD suggests that lack of experience, driving under the influence and impulsiveness are the main reasons teenagers get into accidents.
Additionally, research finds young adults are less likely to wear seatbelts while driving and are more likely to drive recklessly and aggressively. There’s also a higher chance of using cell phones while behind the wheel. These factors are more prominent among young young men, which is why they tend to have higher premiums.
There is no specific average car insurance cost. However, car insurance for new drivers will always be more expensive because they are considered higher risk. Despite this, other factors influence the price of monthly car insurance premiums. Car insurance works almost exactly the same whether you are shopping around for Alberta car insurance rates or buying a new car after arriving in British Columbia. Next, we will dive into factors insurance companies use to calculate your insurance premiums.
Factors car insurance companies consider when calculating insurance costs
Several aspects influence insurance costs for drivers across the country. This is especially true when determining insurance rates for a new or young driver. Here are a few factors your insurance company will use to calculate your insurance rates:
Type of car you drive
The price of your car insurance policy will vary depending on the make and model of the car you drive. Insurance companies consider a few things. These include the cost of maintenance for your specific make/model, the replacement costs and the probability of your car being stolen. Installing additional security features and safety devices can help lower your rates.
Frequency of use
The amount you pay for insurance coverage can also vary depending on how often you drive your car. For example, someone who drives to and from work daily will pay more than a driver who uses transit to commute and only drives on weekends. If you work from home or share a vehicle, your premiums might also be lower.
Where you live
The area you live in also helps determine premiums. People who live in big cities that are more congested and prone to accidents will pay higher rates. In contrast, new and young drivers who live in rural areas with little traffic will have lower premiums. Driving safely to avoid accidents and insurance claims is the only part of this factor you can control.
Driving history
Your driving record directly impacts your insurance rates. It doesn’t matter if younger drivers are getting their own policies or being added to a parent’s — their driving record will be thoroughly checked. If you have a clean driving record, your rates will likely be lower, but if you have any traffic violations, citations or car accidents, the opposite will be true.
It’s likely that one person’s auto insurance policy will not cost the same as another’s. Making multiple insurance claims is a quick way to increase your rates, but sometimes accidents are beyond your control. However, the previously mentioned factors are things you can control and will help you get lower auto insurance quotes when purchasing or renewing a policy. With that in mind, we will discuss ways for new drivers to save money on their car insurance shortly.
Ways for young and new drivers to save money on their insurance premiums
Young drivers and new drivers will always have to pay more for car insurance. However, there are several ways to reduce insurance rates. They include choosing the right car, taking advantage of available discounts, and more. Let’s dive into the details:
Picking a car
As a new driver, you will have to purchase or lease a vehicle. Understanding how expensive different vehicles are to insure will allow you to make the best choice for your budget and needs. Cars with high theft rates or parts that aren’t easy to access cost more to insure. In contrast, family-oriented vehicles such as sedans and minivans are better. Cars with safety features, such as anti-theft devices and rear-view cameras, cost less to insure.
Discounts
Many car insurance companies offer discounts that are readily available to you as a new or young driver. If eligible, those who are newly-licenced or still in school can get lower car insurance quotes as a result. Ask your insurance broker about the following:
Driver training discount
Going to driving school not only makes you a safer driver, but it can also make you eligible for lower insurance rates. All you have to do is provide proof that you completed a course from a registered driving school. Most courses come with a certificate of completion.
Multi-vehicle discount
Families with multiple vehicles should list all of their vehicles on their insurance policies. Bundle your auto insurance with either your parents or spouse to save money on monthly insurance rates when compared to having multiple auto insurance policies.
Good student discount
If you’re a young driver in high school or college, you can lower your car insurance rates by getting good grades. Your insurance company may discount your insurance premiums if you maintain an average of at least 80 percent.
Safe driving discount
By following our safe driving tips, you can avoid getting into accidents and maintain a clean driving record. This option will become available after three years if your driving history doesn’t show any traffic tickets or at-fault car accidents.
Ask your insurance broker if you qualify for any of these discounts. They are effective ways to lower your rates when you don’t have very much experience on the road. You can also ask how to report a car accident to your insurance company in case you do get into one. The process will vary by location. For example, reporting a car accident in Ontario is different from reporting one in Quebec.
Opt for a higher deductible
Increasing your deductible is an effective strategy to lower your car insurance rates. Your deductible is the amount of money you have to pay out of pocket when you make an insurance claim. For example, if you get into an accident collision, comprehensive coverage can help.
However, before your insurance company helps you pay for repairs, you will have to pay an agreed-upon amount known as a deductible. The higher the deductible, the lower the insurance rates. However, keep in mind that you are taking a risk because you will have to pay more out of pocket if an incident occurs.
Pay your insurance annually
Did you know that it’s cheaper to pay for car insurance once annually instead of monthly? It’s true — paying a lump sum amount at a given time period isn’t as expensive. Why? When you pay your car insurance monthly, you are charged administrative fees. That’s why you should compare monthly and annual prices. A new or young driver can benefit from this type of savings even if they might seem minor to an experienced driver.
Get an insurance broker
New drivers and young drivers shouldn’t shop around for insurance without a broker. An insurance broker will shop around and get auto insurance quotes from various insurance providers. An inexperienced driver costs more to insure than an experienced driver.
As a result, finding affordable insurance rates is much more challenging. Having a broker can reduce your stress because they will find you an affordable insurance policy with coverage that suits your needs. Your broker will also let you know what documents you need for car insurance.
Choosing the right vehicle and looking into discounts can reduce your car insurance rates and help you pay for the necessary liability coverage. If you recently got your driver’s licence, you might not have access to a car right away. However, given your limited driving experience, this could be beneficial. Inexperienced drivers can be listed as secondary drivers if they don’t have access to a vehicle all the time, which is more affordable than getting their own policy.
Adding a secondary driver to your insurance policy
A secondary driver, also known as an occasional driver, is someone who regularly uses a vehicle but not as often. Most secondary drivers drive the car once or twice per week or less than 50 percent of the time. In contrast, the primary driver is the one who drives the vehicle the most. When it comes to auto insurance, the primary driver usually pays more.
Your insurance policy states that anyone who uses your vehicle at this frequency will need to be added to your insurance policy. Secondary drivers can include your spouse, siblings or children. However, you don’t need to add neighbours who rarely borrow your car, relatives who use the vehicle when visiting from out of town or a friend who uses your car while in the shop for the day. Here's the information you need:
The costs of adding a secondary driver to your insurance policy
Adding a secondary driver to your insurance policy isn’t considered separate. It will cost less than a normal premium rate. This range can vary from a few dollars to a few hundred drivers each month. It comes down to whether the driver is considered high-risk or not. A new driver or young driver will result in higher rates. However, you must have insurance experience in order to gain good rates. Therefore, it is important to have insurance, whether on your own or with a spouse or family member.
Whether you’re the principal driver or secondary driver, the average rates will be high if you’re an inexperienced driver. Despite this, the cost of car insurance is worth it to protect yourself and other drivers on the road.
Not only is it illegal to drive without car insurance or an expired car insurance renewal, but it’s also expensive if you get into an accident. Your insurance company will help pay for repair costs after an accident or replacement costs if your car is totalled. Without insurance, drivers have to pay a fine and any additional costs out of pocket.
Contact BrokerLink today!
New drivers and young drivers often have the most difficulty finding affordable auto insurance. Car insurance rates are higher because they don’t have very much experience on the road and are still learning. In turn, car insurance quotes often vary even when reaching out to multiple insurance companies.
An experienced car insurance broker can shop around and compare car insurance quotes for new and young drivers to find the best rates and coverage. Speaking of car insurance coverage, there are many types available. Some are mandatory, while others are optional but offer an extra layer of protection. Here are the types of coverage your insurance broker may recommend:
- Third-party liability coverage
- Accident benefits coverage
- Direct compensation - property damage coverage
- Uninsured automobile coverage
- Collision coverage
- Comprehensive coverage
- Accident forgiveness coverage
Insurance for new and young drivers doesn’t have to be expensive. Lean on BrokerLink to help. Have more questions about new and young drivers and their insurance coverage? Get in touch with one of our licensed insurance professionals online or in-person to discuss your insurance needs.