How do you know what coverage to select, what to anticipate in terms of costs, and how to maximize savings when you’ve never bought car insurance before? If you find yourself in this position and are in need of first-time car insurance, then you’ve come to the right place.
In this article, you’ll learn practical tips that will help you navigate the process of purchasing your first car insurance policy with confidence.
What Is First-Time Car Insurance?
As the name suggests, first-time car insurance is for drivers purchasing car insurance for the first time. While you might have been listed on a family member’s, friend’s, or company’s car insurance policy before as an occasional or secondary driver, this is the first policy you personally own and are the primary policyholder of.
There are many different types of people who are buying car insurance for the first time in Canada, including:
- Teenagers and Young Adults: New drivers who recently obtained their driver’s license
- Recent Immigrants or New Residents: People who have recently moved to Canada and are purchasing insurance here for the first time
- Mature Drivers: Those who obtained their driver’s license later in life and now require car insurance for the first time due to changes in transportation needs or lifestyle
- People Transitioning From Company Vehicles: Those who previously drove vehicles owned and insured by their employer
Is Insurance High on Your First Car?
Yes, insurance can be high for your first car. However, it’s not solely determined by the fact that it’s your first car. Insurance companies take many factors into account when calculating car insurance premiums, including some that have nothing to do with the car itself, such as your age, driving record, gender, and where you live. Moreover, the weight they assign to each factor may vary significantly from one insurer to another.
For example, a 30-year-old who has been safely driving for the past 14 years as an occasional driver and just purchased their first car might pay less for insurance than an 18-year-old with less driving experience would. In such cases, the insurance company could opt to charge the 18-year-old a higher premium because young drivers are statistically more susceptible to car accidents, and thus, pose a higher risk to insure.
Fortunately, there are always things you can do to ensure you get the best first-time car insurance for cheaper, many of which will be discussed in the following section.
How to Get the Best Car Insurance for the First Time
Regardless of whether this is your first car ever or your first time buying your own insurance policy, you want to get the best car insurance for the cheapest price. As such, here’s a few helpful tips on how to get car insurance for the first time.
- Choose your car wisely
- Reduce your driving time
- Select a deductible that suits your budget
- Minimize your risk of theft
- Shop around and compare prices
- Consider usage-based insurance
- Bundle your policies
Choose Your Car Wisely
If you haven’t purchased a car yet, keep in mind that the kind of car you drive affects the cost of insurance. Some vehicles are expensive to repair, have parts that are hard to source, or are particularly popular among thieves. So, always do your research first, if you can. If in doubt, the Insurance Bureau of Canada has a good rundown of the car models that are associated with the lowest claims, thereby increasing the chances of a lower monthly premium payment.
Reduce Your Driving Time
Insurance companies will ask you how often you drive and what you use your car for. Someone who drives to and from work every day is, at least statistically speaking, at greater risk for an accident than someone who only occasionally uses their car for errands on the weekends or to drive to the beach. So, if you can, reduce how much you drive. Doing so portrays you as a lesser risk to insurance companies, thus potentially increasing your chances of scoring cheaper car insurance.
Select a Deductible That Suits Your Budget
A deductible refers to the amount you have to pay in case of a claim before your insurance kicks in and covers the remaining amount. While every insurance provider is different, the average rule of thumb is that a high deductible equals lower monthly premiums, and higher monthly premiums equal lower deductibles. The trick is to find a happy medium. If you’re willing to pay for a larger part of the damages in the eventuality of an accident, then insurance companies will lower your monthly payments. Just make sure you’re agreeing to a deductible you could realistically afford.
Shop Around and Compare Prices
When it’s your first time buying car insurance, it can be tempting to go with the company your family and friends use or recommend. While you might start there, you should always shop around so that you can compare prices and ensure you’re getting the best coverage, for the lowest price. Fortunately, you can compare multiple insurers all in one place in minutes with YouSet.
Minimize Your Risk of Theft
Insurance companies are wary of situations that can lead your car to being stolen, so any proactive measures you take to ward off theft will reflect positively on your monthly rates. Whether that’s choosing a car that’s less attractive to thieves, installing an approved theft-deterrent system in your car, or parking in a secured location at night, insurance companies will look favorably upon these steps and may offer lower premiums as a result.
Consider Usage-Based Insurance
Usage-based insurance (UBI) is a type of coverage that uses technology to track how much you’re actually using your car, including how fast you usually drive and how often you’re making full breaks. Based on this information, insurance companies will create a hyper-personalized rate for you. The way it works is that your providers give you a device you plug into your car, or an app on your phone, that tracks all the relevant information.
Bundle Your Policies
Do you have insurance for your home, condo, or rental unit? If so, bundling your home and car insurance policies together can be a great way to save some extra money. In fact, if you use YouSet, we’re the only digital broker in Canada who is able to automatically compare the cost of bundling home and car insurance from a single insurer against the cost of mix-and-match home and car insurers. This means you can be sure you’re getting the best coverage for the cheapest price.
Next Steps: Buying First-Time Car Insurance with YouSet
When it’s your first time buying car insurance, it’s normal to feel a bit intimidated and overwhelmed. If you apply the tips listed above though, it’s entirely possible to buy first-time car insurance that provides the coverage you need without exceeding your budget.