While you may have your heart set on your perfect car, the reality is you may not be able to afford to insure it. Your car insurance is affected by many different factors.
Why Is My Car Insurance So Expensive?
Are you a high-risk driver?
Here are some factors that may classify you as a high-risk driver and raise your insurance rates:
Where you live
Insurance companies analyze your neighborhood’s claims history when setting auto rates, including accidents, vandalism, and thefts. Weather is another consideration - provinces prone to severe weather (i.e., storms, floods) will usually have higher insurance costs. They also look at state-level regulations, which can influence auto rates.
Amongst all the provinces, British Columbia is the most expensive province with an average auto insurance premium of $1,832 per year, a 63% increase in rates since 2015. In fact, insurance rates have always been a hot topic in BC with young drivers getting hit the hardest. BC’s insurance is run by a crown corporation (ICBC), and while the lack of private insurers means consumers have no other options, ICBC does offer discounts for those who drive minimally (low kilometre use, for example), have cars with autonomous emergency braking systems and anti-theft devices. Just no discounts offered for those with a dash cam yet.
Ontario is the second most expensive province when it comes to car insurance. But luckily, Ontarians have the option to shop around for the best deal through private insurers. On the other hand, Quebec has the most affordable car insurance rates, with an average insurance premium of $717 a year.
Inexperienced or young driver
Car insurance rates for high-risk drivers can run between 32% to 49% higher than is typical for standard-risk drivers. Young drivers are less experienced and more likely to have an accident, which results in higher insurance premiums. After 25 years, driver’s insurance rates begin to fall. Senior drivers are more likely to get into a car accident than younger people, but they are also more likely to suffer damage in an accident.
Your driving record
Your driving history has an impact on your car insurance costs. Drivers with recent accidents or infractions on their records pay higher auto insurance premiums than those with clean records. The difference in rates is because these drivers are statistically more likely to be involved in another accident.
But do keep in mind that not all insurers treat high-risk drivers the same way. Some companies will assess much harsher rate penalties than others on high-risk customers, which means it’s always wise to compare car insurance quotes before buying a high-risk policy. Some insurance companies may charge you a lot more after, say, a credit ding or speeding ticket, while others may charge you much less.
You have a lapsed insurance policy
Gaps in insurance history could lead to higher premiums. The more you drive, the lower your insurance. Even if you don’t have a car for a while, consider adding yourself as a secondary driver to a family member’s policy. Lastly, and this should go without saying but, tickets and accidents will hurt your premiums for a while (it takes at least 3 years from payment of a ticket for it to “fall off” your record).
The longer your driving record is with no infractions, the more likely the lowest rates are available to you.
You drive for your job
People who drive great distances for their job, i.e., delivery drivers, are considered high-risk drivers by many car insurance companies. If you drive for work and not just to work, you probably need a business auto policy, not a regular personal lines policy.
Is your car a high-risk car?
Your vehicle's make, model, and year help your insurance company predict how likely it will be involved in a claim, how severe the accident, and how much it will cost them.
According to the Insurance Bureau of Canada, the most expensive cars to insure in Ontario are:
- Toyota Camry
- Toyota FJ Cruiser
- Acura MDX
- Acura RDX
- Honda Civic
- Porsche Cayenne
- Acura TLX
- Ford F-250 Super Duty
Which factors make these cars expensive to insure?
There are a few key factors that typically make cars more expensive to insure:
It’s no secret the most expensive cars to insure are imports such as Maserati, BMW, Audi, Porsche, Mercedes Benz, Nissan, and Infiniti. The sticker price will impact how expensive insurance is.
The Maserati Quattroporte S GranSport was one of the most expensive car to insure in 2021. While this is undoubtedly a shocking number, if you can afford the $112,000 price tag of the GranSport, you can most likely cover the additional $5,000 a year to protect it.
You may be surprised to find two Toyota vehicles on the list because it’s not what people typically think of as a luxury vehicle. However, the Toyota Camry and the Toyota FJ Cruiser are two of the most frequently stolen vehicles on the road, which raises auto insurance rates for everyone who owns one.
The cost of parts and complexity to fix a vehicle are vital factors. Insurance companies will always consider the vehicle’s sticker price when setting a premium. They will have to replace the car if it is damaged or destroyed by a covered peril. Like the Ford F-250 Super Duty on the list - the engine parts are exceptionally expensive for this heavy-duty hauler.
Performance and Technology
Luxury and performance vehicles typically come with a higher sticker price, a bigger engine and are bursting with cutting-edge technology and luxury finishes. It doesn’t help that these vehicles tend to attract a more aggressive driver. And all of this leads to sky-high insurance bills. The Insurance Corporation of BC has compiled a list of luxury vehicles that lets you know if a luxury vehicle is subject to additional coverage, which means higher insurance costs.
Technology is another factor that insurers consider, and luxury vehicles are packed to the gills with high-end technology. Tesla is known for its technology and safety features, but while its safety technology helps keep drivers and passengers safe out on the road, it can also push up the cost of claims and repairs, and thus insurance.
Any performance vehicle not only has the power to be driven aggressively, but it tends to attract buyers who do just that. And aggressive driving leads to more mishaps and resulting claims. Insurance rates tend to be influenced by the likely buyer, so even the most careful driver who purchases a performance vehicle pays the penalty.
Tesla is known for its technology and safety features, and its connected nature protects them against theft. But the hefty price tags, bigger batteries, and their complex and leading-edge technology under the hood are factors that pushed up the insurance cost. The Plaid cars have a claimed top speed of 200 mph, with 0-60 mph acceleration in a manufacturer-estimated 1.99 seconds, and a driving range of up to 520 miles. In the hands of an aggressive driver, the Plaid cars will be super expensive to repair after a crash.
And you’re telling me to spend more on a dash cam?
Most Canadian insurers do not offer dash cam users discounts. But that might start to change!
In November 2021, Nextbase partnered with Branch Insurance to offer customers the chance to save on car insurance. Branch Insurance will offer Nextbase customers an additional 8% savings on car insurance, and Nextbase will offer Branch members a 10% discount on new dash cam purchases.
While insurance companies in Asia and the UK have long embraced the dash cam, this Bridge-Nextbase partnership is one of the first in the U.S. But, we have a feeling it won’t be long before more dash cam-insurance alliances start popping up. We spoke to Jeff Chuh, VP of Marketing at Nextbase North America, and he advised that dash cam users should inquire about car insurance discounts with their current insurer.
And as we all know very well, the true savings of having a dash cam goes beyond the 8% discount - it can literally save you hundreds of dollars in claims and premiums.