Auto Insurance – These Little Known Factors Have a BIG Impact on How Much You Pay – Canadian Car Cost Reports

Buying a new vehicle is an exciting experience for many reasons. You now have a valuable asset under your belt and you have the convenience of going places not feasible without a vehicle. Prior to purchasing a vehicle, nearly everyone has (and should’ve) done their research with regards to factors such as price, efficiency, safety, and durability. Particularly, car deals in Canada, are what most people research before making the purchase, hence, they seldom go to a dealership with an intent to buy without knowing the basic cost of the vehicles. This research eliminates the shock of hearing the price tag of the vehicle you so badly want because you already know the ballpark. While most of us know the price of the vehicle we are going to purchase is, we tend to put aside future costs that are necessary for owning a vehicle. The biggest investment when it comes to purchasing a new vehicle, aside from the price of the vehicle itself, is auto insurance. In Canada, every vehicle is required to be insured- no exceptions. The price of insurance is based on a plethora of factors and it is imperative to research this component of purchasing a vehicle as well.

What factors determine your auto insurance rate?

The car/model you drive

This is one of the primary factors that sway your insurance premium. There are many key metrics that determine what your insurance rate will be. Prior to deciding what amount of premium should be set, every car is first field tested in a variety of aspects; the likelihood of it crashing, the likelihood of passengers getting injured in the crash, the likelihood of it getting stolen (cars that are on the most-stolen list will have a higher insurance), etc. Insurers also assess how powerful the engine is, as in many cases, cars with a powerful engine are more prone to crashes when operated by inexperienced drivers.

Past driving record

Good drivers usually pay less because the likelihood and frequency with which they submit a claim are very low. If you have received any tickets or convictions regarding your actions behind the wheel, your premium will increase quite drastically. Moreover, your premium will also skyrocket if you are a new driver as seasoned drivers are regarded as having more experience on the road and are unlikely to encounter accidents. There are some insurers who provide accident forgiveness, which means that there will not be a hike in the premium for the first accident.

Where you live

Your place of residency has quite a significant effect on your premium. For example, if you live in a highly-populated area, such as Toronto, your rates will be a lot higher than if you were to live in a rural area with a lower population, such as Belleville. If you are in a highly-populated area, you are more likely to be involved in a collision due to an influx of congestion.

Your current age

rates are typically higher for those under 25. The lower age demographic hosts new drivers, young adults who may feel “invincible” behind the wheel, and G1 and G2 class drivers. Rates drop when a person obtains their full G class license and again when they turn 25- provided they maintained a clean driving record prior to.

The age of the vehicle you drive

the type of car you drive and it’s age play a critical role in determining your premium costs. The older the vehicle, the more likely it is to incur maintenance. The more luxurious a car is, the more it will cost to repair, thus, rates will be more expensive. There are many new cars on the market that boost lower premiums whilst providing the comfort and convenience.

What cars are the cheapest to insure in 2018?

The Group Rating Panel is the de facto system through which car models are assigned to a pre-set insurance group ranging from 1 to 50. 1 indicates cars that are very cheap to insure and 50 indicates those cars that come with exorbitant insurance rates. Here’s a list of the cars that fall under the lowest auto insurance group.

Nissan Micra

Shaking off the clunky exteriors of its predecessor, the Nissan Micra is one of the cheapest cars to insure depending on your driving history and a host of other factors.

Volkswagen Polo

The sixth generation sedan is another fixture in group 1 and many of the company’s models fall under this category.

Ford Fiesta

A crowd favourite, the Ford Fiesta is a prime example of a quality car that can be cheaply insured. Two of its style trims fall under insurance group 2.

Seat Ibiza

The 1.0 litre S and SE iterations of the Seat Ibiza fall under insurance group 2. These handy cars have impressed critics and are everything you could possibly hope to have in a small car.

Hyundai i10

Insurance-wise, the i10 is much cheaper than the previous models and is perfect for new drivers as it falls under the first insurance group.

Looking for a new car? Request a free dealer invoice report!

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