4 things to consider when buying a car that impact your auto insurance
Are you in the market for a new car? Whether you’re looking to upgrade your current model or are purchasing your first car, a new car is one of those exciting purchases that many people associate with a sense of freedom and independence. No more waiting for the bus on the weekends in order to go to the store, or asking your friends for a ride when you want to go apple picking in the countryside.
However, as exciting as getting a new car is, you shouldn’t forget about something slightly less exciting but arguably more important: Your auto insurance. In Canada, having auto insurance is mandatory, although the exact details and extent of coverage vary across provinces and territories. In Ontario, for example, you must have at least standard or basic coverage from a provider of your choice. Québec automatically offers every resident a so-called public insurance plan, known as the Société de l’assurance automobile du Québec (SAAQ), which only covers injuries obtained by being involved in an accident with a car. In addition, Québec residents must purchase a private policy that covers up to $50,000. So make sure you’re informed of the specific requirements of your province or territory before shopping for insurance.
The reason why you should think about auto insurance before you buy a car is that the car you choose will directly affect your insurance premiums. That’s why we recommend choosing a car that doesn’t only fit your budget and driving habits, but will also ensure that your future insurance premiums don’t burn a hole in your wallet.
Here’s what you should keep in mind when buying a car:
1. The car’s make and model
The make and model of the car you choose will have a very significant impact on your insurance, which is why you should choose wisely here. Of course, the cute convertible in bottle green with 300 hp may be calling your name, but your insurance may not be so thrilled. That’s because an expensive and powerful car will be much more expensive to repair, and it runs a higher risk of potentially getting into an accident. Plus, a flashier car is considered to be more appealing to theft and vandalism, which just means more risk for insurers.
Similarly, a beautifully restored oldtimer may incite heart emoji eyes, but insurers will make nothing but frowny faces at the thought of all those expensive, hard-to-source parts that will have to be tracked down if your car needs servicing. Insurers like cars that are considered safe and affordable, with parts that are easily replaceable, and no customized features that make it difficult to repair.
In Canada, some of the cars that fetch affordable insurance rates include Toyota Corollas, the Nissan Kicks S, and the Hyundai Elantra Essential. Also, keep in mind that an older car might be easier to repair, but have fewer safety features than a newer model (insurers love safety features).
2. Where you live
Your address will also affect how much you’ll have to pay for auto insurance. If you live in a city, your premiums will likely be higher than if you live in a quiet suburb. And if you live in a postal code known for having higher rates of crime, your insurers will consider you more of a risk and charge you a higher premium.
But it doesn’t end there: If you live in an area that’s prone to earthquakes, flooding, or storms, then you’ll also face higher premiums. That’s because insurers will consider it more likely that something could happen to your car if you live in an area that’s high-density, prone to crime, or simply the site of frequent extreme weather, and therefore consider it more of a risk to insure you.
3. Your driving history and habits
Another factor that you should keep in mind before purchasing a car is your personal driving record, and how you plan to use the car. Unfortunately, any stains on your driving record will follow you as you choose a car insurance policy, and will affect your premiums. So if you’ve got a history of speeding tickets or previous insurance claims, you should definitely try to compensate for that when buying a new car. Choose a model that has a reputation for being safe and particularly unflashy in order to offset your driving record.
Furthermore, you should also consider how you plan to use this car. If you’re going to be driving multiple hours to and from work every day, while also driving yourself and your family around on the weekends, then you may be facing higher premiums. If you just use your car occasionally on the weekends and opt for public transportation or a carpooling scheme for getting to work, your premiums will likely be lower. So while choosing your car, also think carefully about how exactly you’re going to use it.
4. Your coverage level
Finding that balance between getting the coverage you need while not overpaying for extras that likely won’t affect you is tricky, but it’s worth taking some time to find out exactly what kind of coverage you’ll need for the type of car you want.
If the car you want has up-to-date safety features, you live in a safe area, and you only occasionally use your car for commutes, then you may be just fine with a more standard coverage level.
However, if you want a more luxurious brand and tend to use your car quite a lot in your daily schedule, or let your teenager who’s just learning to drive practice with your new car, then you’re probably going to need a higher level of coverage.
As you can see, you should always consider how a new car will affect your auto insurance payments, and proceed accordingly. While buying a car is a joyful investment, it’s also a big purchase. As such, you’ll want to make sure you’re getting a car that fits your lifestyle and budget while also keeping your insurance premiums at a reasonable level.
By the way: Thinking of leasing instead of purchasing? No problem. Insurers don’t discriminate between purchased and leased cars, and the factors that’ll affect your premiums remain the same.
If you’re curious to see what auto insurance providers are out there, and what kind of rates you can expect for your dream car, then we’ve got you covered. At YouSet, you can get a free quote from various insurers within minutes, and easily compare policies to find one that works for you. Curious? Check us out!
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