You may think that a small car would cost less to insure than a large car, as less materials are used and they appear to be safer. However, just like the myth that the colour of your vehicle affects the price of your premium, this isn’t actually true. In fact, the size of your car actually doesn’t have much to do with how your premium is calculated at all.
How is your premium calculated?
Premiums are calculated using a rating system called CLEAR (Canadian Loss Experience Automobile Rating). Each year, an assessment is performed to calculate rating numbers based on actual loss experience of each make and model of car. Vehicles are then rated from 1-60; higher numbers indicating a higher claims risk, and thus a higher premium, and vice versa.
What factors go into determining your CLEAR rating?
Safety
When determining your car’s rating, an important aspect that is looked at is how well your vehicle protects you and your passengers. Specific safety features that are looked at can include:
- Airbags
- Rear-view video cameras
- Blind spot warnings
- Automatic emergency braking
- Anti-lock brakes
Cost to Repair:
Generally, the higher the value of your car, the higher your risk rating. If your vehicle is advertised as “luxury” or marketed as a “sports car”, it is a good indicator that parts will be less accessible, therefore, more expensive to repair. Vehicles that are more common and are “family-oriented” have parts that are more readily-available and cheaper to repair.
Theft:
If the vehicle that you drive has a high frequency of being stolen, then your risk score will be higher. Newer and/or more expensive cars, especially ones with customizations and new technology, are more prone to theft as they are more valuable. One way to lower your risk score is by having an anti-theft alarm installed in your vehicle.
Accident Rate:
This is another factor that is determined solely by statistics. If the make and model of your vehicle is frequently associated with claims, then its risk score will be higher. For example, the majority of large vehicles have better accident ratings because their weight and size makes it more difficult to incur damage. They are also not often associated with driver/passenger injuries. Smaller cars weigh less and can be damaged easier. They are also tied to injury payouts more frequently.
What are the cheapest small cars to insure in Canada?
It is important to remember that the answer to this question changes quite frequently as new car models are constantly being introduced and CLEAR scores are updated yearly. That being said, these are some of the cheapest small vehicles to insure currently:
- Nissan Micra
- Ford Focus
- Toyota Prius
- Kia Rio
- Chevrolet Cruze
- Ford Focus
- Hyundai Elantra
Before purchasing or leasing a vehicle, it is important for you to do some research on your potential car’s CLEAR rating. This will help you to determine whether or not you can afford its monthly insurance premium.
Have more questions about small cars and their insurance coverage? Get in touch with one of our licensed insurance professionals today.
