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What are the top five factors that influence your auto insurance rate?
Updated on August 12, 2026 by Arshi Hossain | Originally written: June 2, 2025 by Michelle Bates
KEY FINDINGS
- Vehicle make and model can significantly affect insurance costs based on claims history, repair costs, and theft risk.
- Drivers with longer insurance histories and no coverage gaps typically qualify for lower car insurance premiums.
- Age remains a major pricing factor, with drivers under 25 years generally paying higher insurance rates.
- Your postal code can impact premiums because insurers factor in local claims, traffic, and theft trends.
- Maintaining a clean driving record can help you keep your insurance premiums low.
The make and model of your vehicle, your driving history and record, age, and postal code are mostly the top five factors that shape your auto insurance rate. While you may think having a clean driving record is all it takes to score a low premium, that’s not necessarily the case. Some factors can weigh heavier on your premium than others.
Weighting of these factors can vary by insurance company and province. This list will give you an idea of how your next premium might be calculated and what factors you can control when it comes to your insurance costs.
The results might surprise you.
1. Vehicle make and model
Insurers look at your vehicle's make, model, and year to gauge two things: how often that type of vehicle is involved in claims, and how much insurance companies have paid for those claims.
Insurance premiums vary for different cars, and it has little to do with sticker price.
“There’s a big difference between replacing a bumper of a car that has motion sensors and replacing a bumper that doesn’t,” says Tanisha Kishan, vice president of product and technology at Rates.ca. “Many of the features of modern cars that make them so convenient can also make them expensive to replace.”
Certain makes and models also have a higher frequency of being stolen. But even if you drive an expensive vehicle, installing anti-lock brakes and anti-theft devices could be the differentiating factor between a lower and higher premium.
Insurance claims data is used to assign every car model with a risk rating under the Canadian Loss Experience Automobile Rating (CLEAR) system. This system plays a big part in determining your premium compared to most other elements. Fortunately, it's also a factor you can research before you buy a car.
Read more: The best (and cheapest) cars to insure in Canada
2. Driving experience and insurance history
The longer you've driven without interruption and without gaps in coverage, the lower your premium tends to be. In Canada, driving experience and insurance history go hand in hand, and insurers weigh both carefully.
“Insurance providers will want to know about any gaps in your insurance coverage as it may affect your premium, especially if it was for a negative reason, such as non-payment or the result of misrepresenting your policy information,” says Kishan.
A gap in coverage can also set you back at square one in terms of your perceived driving experience. “Some providers may also treat it as your first insurance policy if the gap is over a certain amount of time,” says Kishan.
Your coverage history can divulge valuable information that your past driving convictions and collisions might not. “Depending on the reason for a gap in your insurance, it may matter more to an insurance provider than your driving record,” says Kishan.
If you’re switching insurance providers, make sure your coverage transition remains seamless. Teen drivers should also consider getting listed on a parent’s policy as early as possible to build up their insurance history.
3. Age
Age can work against younger drivers and in favour of older ones as it pertains to insurance rates. Unlike most factors that impact car insurance rates, age is an independent driver of premiums, entirely outside your control.
Drivers under 25 years are considered inexperienced, or 'high risk’, as they haven’t had enough time behind the wheel to prove their driving ability. Their inexperience may drive up their car insurance rates. Comparatively, age can be a positive for older drivers when it comes to insurance prices. Some car insurance companies offer lower premiums to drivers over 60 years. Insurers may view them as more likely to drive safely, with a longer uninterrupted coverage history.
Related: The best way for high-risk drivers to get car insurance
4. Postal code (where you live)
Where you live can raise or lower your premium. Insurers use your postal code to understand local risk. They analyze claims data, traffic density, theft rates, and collision frequency tied to specific areas, then price premiums accordingly.
Certain cities and towns in Canada have higher auto claims frequency than others. If you live in a city or town that collectively files more claims than other locations, chances are your auto insurance rate has been affected by it. Before you plan a move, check and compare car insurance rates in the area.
Related: How to protect yourself from carjackings and vehicle theft
5. Driving record
Major or minor traffic tickets signal to insurers that you're capable of the same behaviour again, and can raise your rate for three years. At-fault claims carry even more weight, and can increase your premium for up to six years.
Insurance providers generally don’t weigh your personal driving record heavily when determining your car insurance premium. However, it’s still an essential component that helps your insurer understand your driving habits to price your policy accordingly.
If you’re looking for a chance to lower your auto insurance premiums, keep a clean driving record. Obeying the rules of the road and anticipating actions of drivers around you—beyond ensuring everyone’s safety—could translate into savings.
Read more: How your claims history affects your car insurance premium
What other minor factors can influence your car insurance premium?
The top five factors carry the most weight, but they're not the whole picture. Other factors can also influence what you pay in car insurance, such as:
| Factor | How it affects your car insurance rate | Within your control? |
|---|---|---|
| Mileage | Fewer kilometres driven generally typically equate to lower premiums. Usage-based and pay-as-you-go insurance convert safe, low-mileage driving into direct savings. Not all insurers offer telematics. | Yes |
| Credit score | Some insurers see a link between credit ratings and collision risk. A good credit score may lower your premium. Note: this applies in select provinces only; excludes Ontario or Newfoundland and Labrador. | Yes |
| Gender | Women in Canada tend to have fewer collisions and lower claim amounts, which can result in reduced rates. This factor primarily impacts drivers under 25 years and becomes less influential in later years. | No |
Some of these factors are within your control, while others aren’t. But the one tool you always have at your disposal to defend against overpaying for car insurance is to shop around before you sign up for a policy.
Read next: Most Ontario households have spent over $15k on insurance in the past four years
Don't waste time calling around for auto insurance
Use Rates.ca to shop around, and compare multiple quotes at the same time.
Michelle Bates
Michelle Bates, Freelance writer
Michelle Bates is an editor and writer in the personal finance space. She has seven years of content writing experience.
She has a Bachelor of Arts (Honours) degree from Queen's University in English Literature and Sociology along with a Publishing - Book, Magazine and Electronic graduate certificate from Centennial College. Michelle specializes in personal finance content, including mortgages, home, auto, and travel insurance, and credit cards. Her work has been covered by notable Canadian news sources like the Financial Post, the Globe and Mail, CTV News, and Narcity.
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