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How can young drivers save on car insurance?

May 31, 2023
4 mins
Couple driving in their car

This article has been updated from a previous version.

High car insurance rates and young drivers go hand in hand in Canada.

Drivers between the ages of 16 and 24 years old continue to bear the brunt of costly auto insurance premiums nationwide. Insurance companies are known for using risk assessment techniques — and limited insurance history and driving experience alone can increase a driver’s risk profile.

With the odds stacked against them, young and novice drivers must seek every possible opportunity to save money and each avenue available to curb the high costs of their auto insurance coverage. Here are a few ways to do so.

Driving school

One of the best ways for newer drivers to get a better insurance rate right off the bat is to complete an accredited driver’s training program in preparation for their practical driving test.

Not only can enlisting in a driver’s training program allow you to take your test earlier, insurance companies look upon this action favourably and have been known to issue up to 30% discounts.

Good grades

In line with the education theme, achieving good grades and maintaining a decent grade point average (GPA) may also be the ticket to lower insurance rates for drivers under 25.

Some insurance providers assume that responsible students are more likely to be responsible drivers and will offer Good Student Discounts to new drivers, which can knock up to 10% off the insurance premium.

Primary versus secondary driver

Trigonometry or advanced physics can wreak havoc on a student’s GPA. For students for which this is the case, it's not worth stressing over. There are other ways young drivers can lower their insurance.

One way is to list the novice driver as a secondary driver on an experienced driver’s insurance policy.

Generally, it’s more expensive to be listed as the principal driver of one’s own vehicle. However, being an occasional driver of someone else’s vehicle allows drivers to establish an insurance history and save on insurance now and in the future. That’s because the longer your insurance history is, the lower your risk level becomes — provided of course that you stay free of at-fault accidents and practice safe driving habits.

Usage-based car insurance

Another way to save money on a new driver’s insurance rate is to opt for usage-based car insurance in Canada. Basically, this form of car insurance requires installing a telematics device, or black box, in the car. The device monitors driving habits including rapid acceleration, sudden braking, average and top speeds, and time of vehicle operation. The technology includes GPS tracking that can pinpoint the car’s location to thwart theft and alert authorities of emergencies if airbags are deployed.

More and more Canadians are opting for this insurance program as it saves 5% to 10% just to do a trial. Drivers who exhibit responsible driving habits can reduce their premiums by 30%.

As you can see, building a good record behind the wheel is still the best way to ensure more affordable car insurance premiums in the future.

Compare car insurance rates

You can follow all of the steps above to lower a young or new driver’s rate, but if you don’t compare car insurance quotes from different providers, you won’t know if you’re getting the best rate possible.

So, if you’re adding a new driver to your policy or if you’re a new driver yourself purchasing a policy for the first time, be sure to compare your options before securing coverage.

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