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Helping Canadians with Personal Finance Since 2006

Money Saving Tips for Auto Insurance!

It’s been a while since I’ve posted a money saving strategy, this time around we’re going to discuss how to save money on the dreaded auto insurance! I’ve been utilizing these tips below when insuring my home and our two vehicles.

  1. Increase Your Deductible

    • The deductible is the amount of the claim that you are willing to pay.
    • If your claim is $2000 and your deductible is $500, you will pay $500 and your insurance company will pay $1500.
    • Increasing the deductible from $500 -> $1000 can reduce your premium by 5%-10%.
  2. Shop the Insurance Market

    • Coverage may be pretty standard in your province, but premium differences can be vast. Make sure to shop around by getting quotes from multiple companies.
    • After doing my due diligence, I found that TD Meloche Monnex offered the best rates by a fair margin. Perhaps it was because I belonged to a professional association.
  3. Insure your Home and Automobile with the Same Company

    • Buying your home and auto insurance policies with the same company will give you a discount on BOTH policies. Sometimes up to 10%.
  4. Insure all Vehicles under the Same Policy

    • If you have multiple vehicles, placing them under the same policy can save you up to 10%.
  5. Buy a Car that Costs Less to Insure

    • Be sure to get insurance quotes on the vehicle that you are planning on purchasing.
  6. Follow the Speed Limit

    • Not only can speeding tickets be costly, they can jack up your auto insurance premiums also! (Perhaps I speak from experience?)

Those are my top 6 ways to save on auto insurance! Feel free to add any tips that you may have for reducing your auto insurance premiums in the comments.

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25 Comments

  1. Mr. Tippy on March 28, 2007 at 9:12 am

    I personally believe insurance should be used for something that could financially destroy me.

    My car cost $5000. I don’t have any collision or comprehensive coverage at all. Why? Because although a loss of $5000 would hurt, it wouldn’t wreck my financial situation. Liability is a must have though – injuring or killing someone would cause major financial problems.

    Having only the coverage needed saves a lot of money, and I have a feeling many people are overinsured.

  2. peter brieger on March 28, 2007 at 9:17 am

    I choose to lower my deductible for two reasons

    1/ i get in one accident a year
    2/ i don’t want to pay 1000 i’d rather pay 500 if i could.

    so in my situation it makese the most sense

  3. Mike on March 28, 2007 at 10:29 am

    Peter if you get into one accident a year then you shouldn’t be driving!

  4. canadiandollars on March 28, 2007 at 11:02 am

    hey FT:

    A few others to consider:

    Maintain a Good Credit Record

    Establishing a solid credit history can cut your insurance costs. Insurers are increasingly using credit information to price auto insurance policies. To protect your credit standing, pay your bills on time, don’t obtain more credit than you need and keep your credit balances as low as possible. Check your credit record on a regular basis and have any errors corrected promptly so that your record remains accurate.

    Take Advantage of Low Mileage Discounts

    Some companies offer discounts to motorists who drive a lower than average number of miles a year. Low mileage discounts can also apply to drivers who car pool to work.

    Ask about Group Insurance

    Some companies offer reductions to drivers who get insurance through a group plan from their employers, through professional, business and alumni groups, or other associations. Ask your employer and inquire with groups or clubs you are a member of to see if this is possible.

    Seek Out Other Discounts

    Companies offer discounts to policyholders who have not had any accidents or moving violations for a number of years. You may also get a discount if you take a defensive driving course. If there is a young driver on the policy who is a good student, has taken a drivers education course or is at a college out of the area without a car, you may also qualify for a lower rate.

    cheers,
    CD

  5. Blain Reinkensmeyer on March 28, 2007 at 11:50 am

    Great post Frugal! Auto insurance has never been my thing, and I can already foresee these tips helping down the road :p

  6. FrugalTrader on March 28, 2007 at 12:37 pm

    Hey CAD$

    Thanks for the tips, I didn’t know about the credit record tip, i’ll have to look into it.

    FT

  7. Festival of Frugality #75 ? Get Rich Slowly on May 22, 2007 at 3:33 pm

    […] Saving money on transportation FrugalTrader isn’t on a frugal journey — he’s on a Million Dollar Journey, and he has money saving tips for auto insurance. […]

  8. hard2insure on June 1, 2007 at 1:07 am

    I have to agree with Mike, about Peter.
    Once accident a year is way too many, especially if you’re looking to save money on car insurance. If you have a crap car, liability is all you need, but with a nice new car than you’re going to need a lot more, but it also depends on what you as individual can afford if and when you do have an accident.

  9. […] Save Money on Auto Insurance  […]

  10. Cannon_fodder on October 27, 2007 at 2:23 pm

    Last year our insurance company offered us an option to pay $50 for protection against premium increases should either car be involved in an accident claim.

    We only took it on the one vehicle and sure enough, we had the slightest of ‘accidents’. Frankly, I think the other driver was looking to scam my wife because the way it was described there should have been no damage to a 1 km/h bumper to bumper hit.

    Anyway, our premiums went down this year and that $50 was probably the best $50 for insurance on insurance we’ve ever spent.

  11. Bhasi Basandra on December 6, 2007 at 12:34 am

    I like the idea to get more deductable in collision and comprehenceable compare to less. It is right to have more deductable because driver save money if he is not at fault. Even if he or she is at fault extra would not effect him or her. It is because he is alredy saving some money from insurance. Think yourself.

  12. Louis on December 30, 2007 at 6:00 am

    If you’re in BC and have auto insurance through Canadian Direct, you can save 10% on collision coverage by enrolling in a discounted collision avoidance course. So you save on insurance and upgrade your driving skills.

    http://www.canadiandirect.com/More_Ways_to_Save.aspx

  13. sharebear99 on March 20, 2008 at 8:57 pm

    If you car is worth more than $2000 I believe it is important to have comprehensive coverage.

    The rate reduction would be about $100 a year if you opted for collision instead. The slightest damage on most cars will cost more than a $100. Even if you are a good driver, the chances are that the guy besides you is not.

    We have had a record breaking snowy winter. There have been more accidents than in past years.

  14. keko on May 8, 2008 at 10:24 pm

    Insurance Companies want you to buy two Million in Liability ,I would appreciate comments on this?

  15. Super_Eleni on June 15, 2008 at 8:29 pm

    My tip is to call your insurance company every few months and see if they have any new discounts you may qualify for.
    Recently I called them up to get a few quotes on cars I’m considering buying, and while I was on the phone with the sales agent, she asked me a few questions. It turns out that I qualified for a discount because I had been living with my boyfriend for over a year. She reduced my current premium by $10. per month. Not too shabby.
    I just wish they had a list of all the possible discounts available out there.

  16. paulette on July 5, 2008 at 11:22 am

    Nowadays i would prefer investing money in the bank rather than purchasing a new car. Or if ever i have a car i will sell it.The price of gasoline is going sky high.

  17. DAvid on July 5, 2008 at 12:15 pm

    Paulette,
    While you not owning a car is admirable, it is not a possibility for many folks. Thus insurance savings are an important aspect of their financial plan.

    DAvid

  18. Term Insurance Pro on December 1, 2008 at 2:22 pm

    You mentioned home owner’s insurance in this article too, and I determined to double my deductible. I figured that every 6 months I didn’t have a claim I’d be saving money. So hopefully my bet comes through.

  19. Aqorps on December 13, 2008 at 5:11 pm

    Well having seperate winter tyres for your vehicle might save you up to 5% That’s what I have seen..

  20. Insurance on December 18, 2008 at 8:15 pm

    Hey Y’all

    I have 2 cars, 1 house and life insurance from Co-operators. Before my wife and I bought our house we only had car and apartment insurance(apartment through CAA). However, once we added 2 life insurance policies and our house insurance, the savings in combining 5 policies(2 life insurance, 2 cars and a house) pretty much paid for the house insurance. So bundle up all insurance products with one company.

  21. Jeff Meyer on July 3, 2009 at 3:56 pm

    Can anyone reccomend a “HIGH RISK” insurance company , or a broker twho deals with such companies?

    It’s been 2 years since an accident, but I have 2 acciedents 3 years ago (at fault) and I am dishing out 400$ a month to drive!

    i’m with Economical (Perth) insurance now…

    would apprecaite if anyone has some good experience being in a similar situation!

    even just for shopping around purposes as the online quote systems always fail after you say you have 2 accidents.

    thanks so much!

    regards,
    Jeff

  22. Allyson on May 13, 2010 at 4:12 am

    Thanks for the information Frugal. These tips really save money for auto insurance. The insurance company offers scheme/policies such as ‘pay as you drive car insurance’ which really saves money on insurance where we need to pay only when we drive. This is really a good idea and good scheme for those who can pay insurance only that drive their car often and can also insure car for single day or for 28 days who borrow or rent a car for relatives or friends. This will help in saving money on car insurance. The tips are really very helpful in saving money on auto insurance.

  23. chevy 350 engine on July 1, 2010 at 2:55 am

    With many years of experience and expertise in the field of Chevy / GM motors – you will be delivered a high quality engine that we are willing to stand behind for 7 full years – 70,000 miles!

  24. Austin Auto Insurance on July 1, 2010 at 6:48 pm

    Hey thanks for those tips, seriously helpful. Especially if you get an auto insurance quote every now and then just to see if you can reduce your rates!

  25. Irfan Qureshi on August 6, 2010 at 6:27 am

    My son and daughter have just acquired their driving license, age 22 and 19 respectively. Both of them are university students. Any tip on reducing their auto insurance is welcomed.

  26. Jeff W on May 15, 2013 at 12:16 pm

    Pay your annual premiums up front rather than monthly, most ins company’s will offer a discount OR you are paying a fee to pay monthly.

  27. j.morris on April 4, 2016 at 11:18 pm

    I receive an annual discount from my Insurance Co. if I restrict my annual mileage to 10 thousand work related miles.

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