No matter where someone selects to drive in Canada, the law mandates that he or she obtain the appropriate motor vehicle insurance. This is a necessary requirement in all territories and provinces if one wishes to operate his or her automobile legally. If a person is found not to have the proper policy for his car, he can end up losing his vehicle and face several fines. Should they occur, any of these scenarios will have a bad impact on the driver’s lifestyle, as well as his or her driving record.
How Rates are Determined
Insurance plans in Canada can vary from location to location, so Canadian insurance agencies will look at every single independent factor and put them all together. One thing that stays constant is your driving history: a good record will always lead to a lower insurance price. If one has a history of accidents, speeding tickets, or other citations, he or she will most likely have to pay more for car insurance cover than someone with a clean driving record, or with a very minimal number of the aforementioned scenarios.
Insurance cover quotes will also vary depending on the accessories one has in his or her vehicle. You’re able to get an additional discount on car insurance for features like anti-theft sound alarms and extra airbags. In addition, younger people typically pay more for car insurance than mature individuals, and women are generally able to get lower rates than men. These rates are based on statistics that reveal that younger, inexperienced drivers are more apt to become involved in accidents or acquire citations than mature drivers. Similarly, statistics show that men drive more aggressively than women and tend to speed more often, making them a higher risk, as well.
Insurance for New Vehicles
When it comes time to buy a car, one must carefully consider the various pros and cons with regard to a used vehicle versus a new car that needs financing through a bank loan. The make, model, and year of a car are three details that have a significant impact on insurance rates. There are several reasons for this, including the easy-to-understand fact that if a brand new vehicle is involved in an accident, it will be more costly to repair than an older car. Similarly, a sports car or luxury car will cost more to repair than a basic model. In addition, newer cars are more often targeted for theft and are expensive to replace if the insurance company must do so. Therefore, insurance agencies typically charge more to insure such vehicles than they charge to insure older cars.
Another fact to which some thought must be given is that cars which are brand new should usually be purchased through a finance company. The finance company in such a case will need that one has full coverage on his or her automobile, meaning liability, collision, comprehensive, theft, vandalism, and cover for uninsured drivers. If one buys a used car that can be paid for with cash, he or she will have the option of buying only the minimum insurance required under Canadian law, which is usually basic liability. However, for a new car that must be financed, one must obtain the full cover as previously mentioned. With this in mind, it may be wise to consider if a new car is an absolute necessity, and if not, one may wish to purchase a used car for which only the minimum insurance cover is needed.
Tips for Reducing the Cost of Insurance on a Financed Car
Those who prefer to drive a new car do not have to resign themselves to paying unusually high insurance premiums. There are several ways in which one can save money on the cost of a policy for a financed car. For instance, the aforementioned safety devices such as a car alarm or a GPRS system can reduce insurance costs considerably, as theft is a key issue of concern for an insurance company. Additionally, if one does minimum driving, such as an individual who works from home and has no hectic commute five days a week, he or she should apply for a low mileage discount.
If you want to get even more discounts on auto insurance, be sure to take a driver’s education course and that can really assist you to lower your insurance rates. In addition, one should compare quotes from various insurance companies before making a final decision on a policy, as this is the best way to ensure that the most suitable and cost-effective policy will be found.