Since young or new drivers typically have little to no driving experience, insurance companies typically perceive them as riskier, resulting in higher premiums. In most provinces, a new driver might need to pay more than $2,000 annually just to be covered by auto insurance.
This article covers the cost of insurance for new drivers in Canada and includes tips on lowering premiums.
Key Takeaways
- New drivers can expect to pay anywhere from $1,100 to over $5,000 annually for car insurance in Canada. This wide range is influenced by multiple factors considered in the calculation, such as the driver’s city of residence, age, driving history, and type of vehicle.
- Some of the easiest ways to lower your car insurance costs as a new driver are to bundle your insurance policies, limit your auto insurance coverage, and build a clean driving record.
How Much is Car Insurance for a New Driver Per Month?
Exactly how much car insurance costs a new driver in Canada depends on many factors, such as the driver’s age, gender, city of residence, driving history, and type of vehicle.
Because of this, there’s no definite answer to how much you can expect to pay for car insurance as a new driver in Canada without a quotation from an insurance company.
However, based on a recent study conducted by Ernst & Young (EY) and commissioned by the Insurance Corporation of British Columbia (ICBC), an 18-year-old driver with a novice license can pay as low as $1,129 in Saskatchewan and as high as $5,119 annually in Ontario.
New Driver Insurance Cost Per Province
Even within the same province, new drivers can receive different quotations from their auto insurance companies.
After all, in addition to the driver’s province of residence, numerous factors still affect car insurance costs, such as the city you live in, your age, the type of car you drive, and even your employment and marital status.
That said, if we want an objective way to compare how much auto insurance costs differ across provinces, we need to use a control group, which is exactly what the previously-mentioned study conducted by Ernst & Young (EY) did.
Using the data from that study, here’s a table that shows how much the average car insurance costs for 18 to 22-year-old drivers across 9 provinces in Canada:
| Province | Annual Insurance Cost Range for New Drivers |
| Alberta | $3,410 to $5,936 |
| British Colombia | $2,165 to $2,511 |
| Manitoba | $1,370 to $1,413 |
| New Brunswick | $3,386 to $4,297 |
| Newfoundland and Labrador | $5,019 |
| Northwest Territories | N/A |
| Nova Scotia | $3,060 to $4,861 |
| Nunavut | N/A |
| Ontario | $2,867 to $5,199 |
| Prince Edward Island | $1,846 to $2,988 |
| Quebec | N/A |
| Saskatchewan | $1,129 to $1,471 |
| Yukon | N/A |
Why is New Driver’s Insurance So Expensive?
New drivers’ insurance premiums are expensive because insurance companies typically consider them “high-risk.”
Statistically, younger or new drivers are more prone to traffic violations and car accidents that directly affect how much the insurance company may potentially need to cover.
As new drivers spend more time behind the wheel and prove a clean driving history, their insurance premiums will decrease.
Factors That Influence the Cost of Insurance
These are some of the major factors that influence the cost of auto insurance in Canada:
- Driver’s age
- Driver’s gender
- Driver’s city or province of residence
- Driver’s history of car insurance claims and related convictions
- Driver’s type of license
- Number of kilometres driven annually
- The vehicle make, year, and model
Some insurance companies may also consider your marital status and employment status when determining how much to charge you for the premiums.
Do New Drivers Need Their Own Insurance Policy?
If you’re a new driver who wants to buy or lease your own car, you must get your own car insurance. However, if you’re only planning to drive your family car, your parents or guardians can add you to their insurance policy as a primary or occasional driver.
How to Save on Car Insurance
Want to save on driver insurance? These are some of the best tips to follow to get the cheapest insurance for a new driver:
- Bundle your insurance policies
- Always pay your car insurance on time
- Limit your insurance coverage to what you actually need
- Directly compare quotations from different insurance companies
- Build a clean driving record that’s free from accidents and convictions
Cheapest Cars to Insure for New Drivers
Wondering what the cheapest cars to insure for new drivers in Canada are?
Jeep Wrangler almost always remains one of the cheapest cars to insure. If you’re looking for “green” car options, the Toyota Rav4 Hybrid, which is one of the best hybrid cars in Canada, and the Kia Soul EV, one of the cheapest electric cars, are some of your best options.
Conclusion
How much new drivers pay for their car insurance widely varies depending on factors such as their type of license, province of residence, driving history, and gender.
That’s why even if others can pay as low as $1,500 per year for auto insurance as an 18-year-old driver, you may still be quoted double this amount just by living in a different province.
To ensure your auto insurance costs eventually go down, keep a clean driving record and follow the other tips mentioned above.
More…
Who is considered a “new” driver in Canada?
There’s no specific guideline as to who’s considered “new” drivers in Canada. Some insurance companies classify individuals under the age of 25 as new drivers, while others base this classification on how long the drivers have obtained their driver’s license or both.
Can I drive a car without insurance if I just bought it in Ontario? ‘
If you just bought a car in Ontario, you must already be covered by auto insurance before you can legally drive your vehicle off your seller’s lot. However, if you already have an existing policy for an older car, your new car may also be temporarily covered by your existing insurance policy.
Which age group pays most for car insurance?
The youngest age group, or those under 20 years old, typically pay most for car insurance. That’s because this group has the least driving experience, making them more prone to road accidents or convictions.
Do you need a driver’s license to get car insurance in Ontario?
Yes, you need a driver’s license to get car insurance in Ontario. Both the G1 and G2 licenses are accepted by insurance companies.
