How to Save Money on Car Insurance in Canada

Every car owner in Canada needs car insurance, but no one wants to be stuck with a policy that breaks their budget. Thankfully, there are practical ways to save on car insurance without sacrificing the coverage you need.

Some strategies offer quick savings, like installing winter tires. Others pay off over time, like maintaining a clean driving record.

The best place to start is by reviewing your current policy and asking your insurance provider what discounts or adjustments are available to you. Even small changes to your car insurance can add up to significant savings.

1. Maintain a clean driving record

Your driving record is one of the biggest factors affecting your insurance premium. It includes your licence class, years of driving experience, traffic violation convictions, and claims history.

Insurers use this information to assess your risk profile. If you have multiple traffic violations convictions — such as speeding tickets, distracted driving, failing to yield, or impaired driving — you’ll likely be seen as a higher risk. And higher risk usually means higher premiums.

Thankfully, parking tickets don’t affect your insurance rates  — but avoiding them will help to keep more money in your wallet and mean you can easily renew your licence plate when time comes.

Overall, safe driving is one of the most effective ways to save on car insurance — and protect yourself and others on the road.

2. Seasonal and safety discounts

• Insurers often offer discounts for actions and features that reduce your risk of accidents or claims. Here are some simple strategies that can lead to savings:

• Installing winter tires. Snow tires perform better in winter weather conditions, helping to minimize your risk of an accident. In Ontario, it’s mandatory for insurers to offer you a discount for putting winter tires on your vehicle. While other provinces and territories don’t mandate this discount, many still offer it.

• Taking a defensive driving course. Both new and experienced drivers may qualify for a car insurance discount for completing an approved defensive driving course. But keep in mind the savings may be smaller if you’re an experienced driver with an already low rate.

• Having an anti-theft device. With roughly $1 billion worth of vehicles stolen every year in Canada, installing anti-theft devices — like an ignition kill switch or a wireless tracking system — can protect your car and help reduce your premium.

• Drive less. If you only use your vehicle occasionally, lower mileage leads to lower premiums, compared to a driver who uses their car to commute daily. 

3. Bundle your home and auto insurance policies

Bundling means combining multiple types of insurance — such as home and auto — under one provider. Doing this is not only convenient, since you can access multiple policies in one place, but it often comes with a discount.

With RBC Insurance, for example, when you bundle the insurance for your primary residence and your car, you could save up to 15 per cent on your premiums, depending on your insurance profile and province.

You may also qualify for savings by insuring multiple vehicles with the same provider. Each vehicle would still have its own coverage, customized to its value, but together they may be eligible for a multi-vehicle discount — especially helpful for households with more than one driver.

4. Group memberships and employer discounts

You may qualify for a car insurance discount through your workplace or if you’re a member of a specific organization. Common eligible affiliations include:

• Professional associations

• Labour unions

• College or university alumni associations

• Employer group benefit plans

If you belong to any of these, ask your insurance advisor what group discounts might be available to you.

5. New driver and student discounts

Newly licensed drivers may qualify for savings as they move from a beginner’s licence class to a higher licence level — such as graduating from a G2 to a full G licence in Ontario.

Completing a Certified Driver Training course through a provincial Government-approved driving school can also help reduce your premiums, since it indicates you are trained to drive safely.

Students may be eligible for discounts as well. Some insurers offer lower rates for full-time students who can provide proof of strong academic performance.

Also, let your insurer know if any listed drivers on your policy — like your kids — are away at school. Since they won’t be using the car as much, you should be able to save on your premiums.

6. Adjusting your deductible

Your deductible is the amount you pay when you make a claim. For example, if you’re in an at-fault accident with $2,000 worth of damage to your car, and your collision deductible is $500, you would pay the first $500 and your insurance would cover the remaining $1,500.

A lower deductible means less upfront cost if something happens — but it usually comes with higher premiums. On the flip side, choosing a higher deductible can lower your monthly premium.

The key is balance. Calculate the potential monthly savings on your premium versus the potential claims cost. If you’re comfortable covering a higher out-of-pocket cost, increasing your deductible can be an easy way to save.

7. Reassessing coverage for older vehicles

As your car ages, its value typically drops — so keeping the same level of coverage may no longer make financial sense. In some cases, repair costs can exceed what your car is worth, or it may be more practical to pay out of pocket for repairs than file a claim.

Take a close look at your vehicle’s current value, estimated repair costs, and potential payout. If your coverage costs more than what you’d receive in a claim, it may be time to reconsider.

Two optional coverages to review are collision (for repairing or replacing your car after an accident) and comprehensive (for non-collision events like vandalism or theft). If your car no longer has much value, these add-ons may not be cost-effective.

Remember: this isn’t about dropping coverage you genuinely need — it’s about making sure your policy still fits your vehicle’s value.

8. Consider accident forgiveness coverage

Mistakes happen — it is, after all, called an “accident” for a reason. But even so, your car insurance premiums will usually go up if you’re at fault.

Accident forgiveness coverage, also known as accident rating waiver coverage, helps protect your driving record rating after your first eligible at-fault accident. The catch? You need to add it to your policy before anything happens — you can’t apply it retroactively.

As well, it only covers your first eligible at-fault accident. Any additional at-fault claims will likely affect your insurance premiums, coverage, or both.

9. Improve and maintain your credit score (where applicable)

Some insurers consider your credit score when determining premiums, with better scores often leading to lower rates.

That said, this isn’t universal. In some provinces — Ontario and Newfoundland and Labrador — insurers aren’t allowed to use credit scores for auto insurance. Still, depending on your insurer and where you live, it may be an available option.

10. Choose a new vehicle wisely

Before you buy or lease a vehicle, get insurance quotes for the models you’re eyeing. The year, make, and model may play into your premium.

Some vehicles are more expensive to insure due to higher theft rates, , or pricier repairs. Because of these risks, insurance companies typically charge more to insure them.

Checking rates in advance can help you avoid surprises — and potentially save money over the life of your vehicle.

11. Review your policy annually

Review your policy every year to ensure that all your information is accurate and up to date.

Maybe you’ve moved to a new neighbourhood and aren’t commuting as far. Or maybe you now have a spouse to add to your policy or your child has moved away and is no longer driving your car. These are all things that can impact the cost of your insurance.

It’s also a good time to check for new discounts. An RBC Insurance advisor can help you with your review and identify possible savings.

12. Use a driving app

Being a safe driver can help lower your premiums, but how do you prove you’re responsible behind the wheel? With a driving app, such as Aviva Journey. Available in Ontario and Quebec, Aviva Journey is a usage-based insurance program that enables you to obtain a personalized premium which can decrease (or increase) based on your driving habits.

Rather than having to install something in your vehicle, the app uses sensors on your smartphone to track and assess your driving habits. Just by having your phone with you while driving, the app can detect things like:

• Whether you consistently drive within the posted speed limits.

• If you accelerate, brake, and corner smoothly and with control.

• If you’re focused on the road and not actively using your smartphone while in the car.

If the data indicates you’re a low-risk driver, you may qualify for a higher discount.

13. Compare car insurance quotes when renewing

Every year is a chance to review your premiums — don’t just automatically renew. Check if your policy is still accurate for your current situation or if there are any new discounts or plans available.

Also, don’t be afraid to shop around. Get quotes from multiple insurance providers, but don’t focus on price alone. Compare coverage levels too — you want real value, not just the lowest number.

Many insurers, including RBC Insurance, let you quickly get a quote online (excluding Alberta).