21 Factors to Lower Car Insurance Rates in Ontario

Apr 27, 2019

Many drivers are looking for effective strategies on how to lower car insurance in Ontario, given its increasing complexity. Clients often ask us, "Why is my price higher than my friend's or neighbour's?"  It turns out, it is not as simple as being the same age or living in the same area as someone you know.  We found no less than 21 factors that can influence your car insurance premiums.  Do you land on the right factors?  Here is a comprehensive list, in no particluar order, of the main factors that go into calculating your car insurance and what you can do to lower your rates and make sure you have the right price.

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Vehicle Year, Make and Model

Choosing the right vehicle can be a significant step towards lowering your car or auto insurance. While it certainly is more expensive to insure a BMW versus a Honda Civic, the physical damage coverage is only one part of the insurance premium.  You are also insuring your body for injury.  The vehicle safety rating often has a major impact on the insurance premium.

Vehicle Purchase Date, Bought New or Used

Generally, the newer the car, the more value it has and the more expensive it is to replace if there is a loss. This makes newer cars pricier to insure.  There are however some insurers that will reduce your rates if you purchase a vehicle new.  The logic is that if you have the credit to buy a new vehicle, then you are probably less likely to have an accident.  While using credit scores to determine auto insurance premiums is illegal in Ontario, it is perfectly legal to discount insurance premiums on new vehicles.

Postal Code

Where you live may be the biggest factor in how your insurance is priced.  Urban areas have more vehicles and more things to bump into as opposed to suburban or rural areas.  As a general rule, the closer you are to a major metropolitan area, the higher your insurance will cost.  Rates are based on historical claims data from that area or territory, with the Greater Toronto Area having the highest rates in all of Canada!


The coverage you select definitely impacts the price.  Do you want to cover your vehicle for collision or comprehensive coverage?  Should you purchase one million or two million dollars in liability coverage?  What deductible is appropriate?  If you don't know the answers to these questions, you should consult the advice of a broker who can tailor the right combination of coverage and savings for you.

Winter Tires

Installing winter tires not only enhances your safety during Ontario's harsh winters but also offers a practical benefit – it can lead to discounts on your car insurance.The discount can vary from 2% to 5% so make sure you tell your broker if you have them installed.

Date of Birth

Your age has an impact on the insurance rate, especially if you are under 25 years old.  Young drivers pay higher rates because statistics show they are more likely to have an accident and also more likely for it to be a higher severity.  The insurance pricing is reflected in this.  As you get older into your fifties and sixties, you could see additional age discounts.

Marital Status

If you are a male under 25 your marital status can have a big impact on the rates.  If you are married your rates are much lower.  Is the effect of domestication? That is not a leap that I will make here in this article.  We do know however that stats show married men have fewer accidents.  


As we just saw above, your gender can impact your rates drastically especially if you are under 25; males pay much higher rates than females.  There is also a new Gender X designation that Ministry of Transportation of Ontario has approved.  For those who are non-gender binary or gender fluid, you can have the MTO change your gender to 'X' on your driver's license.  These drivers will get the lower of the male or female insurance rates.

License Date(s)

The longer you are licensed and the more experience you have, the lower your prices will be.  Do you have a G1, G2 or G license and for how long?  This information often has a large impact on the rates.

Years Continuously Insured

The number of years you have had continuous insurance impacts your price positively the longer you've been insured.  You have established a track record of having insurance without claims which gets you lower rates.  

Company Insured

How long have you been insured with your current company as opposed to continuous coverage with any company?  Some insurers highly value this factor because it is an indicator of loyalty.  Insurers want you to stay with them for a long time and will reflect that in their pricing to try and land you as a client.


This one is obvious.  If you have had "at-fault" claims, it will affect your pricing negatively.  There is a lot of misconception about no-fault insurance in Ontario and how it relates to claims impacting your rates, enough for another article entirely.  Suffice it to say any at-fault collisions on your record within the past 6 years, and sometimes beyond, will impact your insurance rate.


Any Highway Traffic Act violation within the last three years will impact your insurance rate.  Convictions, or more commonly referred to as "tickets" come in the form of minor, major and serious with each having progressively worse impacts on your rates.  It is important to note that parking tickets do not impact your insurance rates, a common misconception.


A vehicle suspension due to unpaid fines or demerit points may impact your insurance price.  It is always recommended to keep your driver's license in good standing.

Cancellations and Insurance Lapses

Many people may not know this but having your policy cancelled due to non-payment of premiums will have a negative impact on your auto insurance.  Having multiple cancellations could impact your eligibility for a payment plan or the ability to get insurance at all from a given provider.

Yearly Kilometres

Your annual kilometres increases your premiums depending on how far or often you drive.  The more you are on the road, the more likely to have an acdident.  Makes sense.

Daily Kilometres

Similarly, your daily commute length impacts your pricing as well.  Do you work right around the corner or do you commute to Toronto from Hamilton every day on the 403?  Guess whose rates will be higher.


The discounts for auto insurance are many.  Do you have multiple vehicles insured? Are you bundling with your home insurance?  From conviction free, retiree, driver training to good student discounts, there are many discounts you can qualify for and you should discuss with your broker.

In addition, starting 2024, Direct Compensation Property Damage (DCPD) coverage will become optional for Ontario vehicle owners, offering more choice and control over insurance policies

Group Pricing

Are you a member of an alumni group, professional association or an employee at a large company?  You may qualify for a special group rate or discount.  CAA members als get special discounts.

Vehicle Usage: Commute, Pleasure, Business, Commercial

Are you just using the vehicle for pleasure use, or are you commuting to work?  Is the vehicle being used to visit clients?  Do you have a logo on the car?  Are you making deliveries or driving for UBER?  All of these different uses will have escalating effects on your insurance rates as the usage and risk increases.

Usage Based Insurance: Telematics

Another factor that could use an entire article devoted to it, Usage Based Insurance (called UBI for short or Telematics), is a way to reward good drivers for their safe driving. Enrolling in Usage Based Insurance programs can now lead to discounts up to 20% per year for safe driving habits. Those drivers who exhibit safe driving habits like not speeding, hard braking or hard cornering will get discounts if these events do not occur.  The driving is tracked either by an app on your mobile phone or by a device inserted into your car's CPU.  Those who enrol in these programs generally get 10% off just for enrolling, with an additional 15% for safe driving.  Potentially saving 25% on your auto insurance for being a safe or seldom driver is a pretty good deal.

How to Lower Your Ontario Auto Insurance Rates

We've just explored 21 strategies on how to lower car insurance in Ontario. It's important to note the indexation rate for 2023 set by the FSRA at 6.9%, affecting income replacement and medical benefits under auto insurance policies. Considering the expected rise in premiums, actively comparing rates, exploring usage-based insurance options, and tailoring coverage are crucial for cost-effectiveness. While factors like age and marital status may be beyond your control, there's much you can do to maximize your discounts and find the best price for your situation. Need guidance? Feel free to reach out to us for assistance

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About the author Sean Graham:

Sean Graham has been an insurance broker in Ontario for the past 18 years.  He is considered a pioneer in the digital insurance space and has been featured on CTV’s Canada AM, CBC, City TV, AM 640, Newstalk 1010 and Toronto Star.  In 2014 he was named one of Canada’s Top 10 brokers under 40.  Sean believes strongly in putting the consumer at the center of everything the business does.  He is also an advocate for fostering the next generation of insurance talent through education and mentorship.


Photo by Krissia Cruz on Unsplash

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