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Car insurance for new drivers: the basics.

Are you a new driver trying to find car insurance? Finding affordable insurance is often a challenge since new drivers typically pay the highest car insurance premiums.

One thing that can help new drivers lower their costs is comparing quotes from multiple Canadian car insurance companies. This will go a long way in helping you secure the cheapest insurance policy as a first-time driver.

LowestRates.ca compares the car insurance market for you. To start, just enter your postal code. We’ll show you car insurance rates from Canada’s leading car insurance companies.

Next, we’ll connect you with a car insurance agent or broker who will secure your lowest rate. Heads up, your broker or agent might suggest changes to your coverage, which could impact the price.

In Canada, a newly-licenced driver is considered a new driver or a first-time driver. For some car insurance companies, drivers are considered "new" until they have at least three years of driving experience; for others, it can take up to five or even nine years.

As a new driver, getting your first insurance policy can be an overwhelming process. The good news is we have helpful tips for new drivers on finding car insurance. 

Keep reading to learn more about car insurance for beginner drivers. When you’re ready, apply for car insurance quotes and see what your lowest rate is.

Front view of a car. Illustration.

See how our customers save big on auto insurance.

CustomerLocationVehicleLowest rateAverage rateSaved
Quote from October 01, 2022
Customer
Female, 47 years old
Location
ontario
Vehicle
2016 AUDI A4 2.0T QUATTRO 4DR
Lowest Rate
$108/mth
$1,297/yr
Average Rate
$160/mth
$1,917/yr
Saved
$52/mth
32.34%
Quote from October 01, 2022
Customer
Male, 31 years old
Location
ontario
Vehicle
2019 CHRYSLER 300 TOURING 4DR AWD
Lowest Rate
$188/mth
$2,257/yr
Average Rate
$290/mth
$3,485/yr
Saved
$102/mth
35.24%

Your questions about car insurance for new drivers, answered.

What is new driver insurance?

If you have no prior driving history or any record of having insurance you're considered a new driver.

This includes:

  • Drivers who recently obtained their driver’s licence and are looking to buy insurance for the first time.
  • Teenagers and young adults; if you’re under the age of 25, insurance companies have you pegged as inexperienced — and therefore more likely to file a claim.
  • Adults with no Canadian driving experience. Regardless of whether or not you have a good driving record in another country, if you have no proof of that experience, you will be considered a new driver. Insurance companies will generally include driving experience from all Canadian provinces, the United States and other countries with similar driving environments. These consumers should look to obtain that documentation from their prior insurer to assist the process.

Car insurance for new drivers is expensive. Your lack of experience on the road is taken into consideration when your car insurance company calculates your insurance, which results in higher premiums.

Make sure you get car insurance quotes for first-time drivers from multiple providers to ensure you get the most competitive rate.

How much is car insurance for new drivers?

There are a few reasons why auto insurance premiums are so expensive for recently-licenced drivers. The main one being that young drivers and inexperienced drivers are more likely to be involved in an accident and need to make a claim. Insurance companies base their prices on the level of risk each customer presents. Therefore, premiums will be different for every driver.

Who has the best car insurance for first-time drivers?

What counts as a good car insurance rate for a first-time driver? The answer depends on your driving history.

Overall, new drivers pay more for car insurance than the more experienced drivers they share the road with. Insurance companies assess many different factors, including your driving history, when calculating the cost of your insurance rates, and each insurer has a different tolerance for risk (the more willing the company is to take on a risky client, the lower the rate will be and vice versa). That’s why premiums vary from company to company.

On the bright side, there’s more than one way to find cheap full coverage auto insurance for a new driver.

You can lower your rates further by checking which discounts you're eligible for. Joining a telematics program, taking a driver's education course, or even maintaining good grades if you’re in school are just a few examples of tactics that may help trim your car insurance premium.

It’s best to shop around for best car insurance quotes for new drivers and see what other insurers are willing to offer you before you sign on the dotted line.

Do new drivers qualify for cheaper car insurance?

Having no previous auto insurance or no driving experience is sometimes riskier to insurers than having a violation on your record. That’s because your driving experience is a key factor in predicting the likelihood of you being in an accident.

That being said, there are still ways to lower the price of insurance as a first-time driver.

  • Bring proof. New to the province or country? Request your old insurance company to provide a reference to your new insurer. This may help you secure a lower premium because you have a record of your insurance and driving history the potential provider can review.
  • Student discounts. Many new drivers are under the age of 25 and are deemed inexperienced. Luckily, students in high-school or post-graduate programs still have access to discounts. For example, some auto insurance companies will provide discounts to students who maintain good grades.
  • Join a telematics program. Installing a telematics device in your car, or using an app that tracks your driving habits, can earn you a discount of up to 25% on your auto insurance at renewal.
  • Take a driver's education course. Drivers can get a better rate by taking voluntary driving courses from a recognized driving school.

Ultimately insurance costs for new drivers may also differ due to other factors such as your gender (men pay more than women), licencing level, where you live, the kind of car you drive and whether you’ve incurred any traffic violations during your brief time driving.

Remember to ask your insurance provider for discounts that you are eligible for so that you have the most affordable car insurance for new drivers and maintain adequate coverage.

How can I get cheap insurance for new drivers?

It can be challenging to find cheap new driver insurance because most new drivers don’t have any prior insurance history that insurers can use to gauge risk. Ultimately, you wind up paying more in premiums.

The good news is expensive auto insurance for new drivers won't last forever. According to LowestRates.ca data, automobile insurance premiums gradually decline annually after age 18, with the most significant drop by price occurring around age 25.

But not every new driver is a young driver. Here are other things you can do to get the lowest car insurance rates for new drivers:

  • Get a full licence: The more driving experience, the cheaper your rates.
  • Show your credit score to your insurer. This isn't an option in every province, but insurance companies may offer you a discount on your premium if you have a good credit score.
  • Compare insurance rates before you buy a car. Insurers calculate premiums depending on the make and model of your car. Ask your agent or broker for an estimate to see how expensive your car is to insure. If it’s a model that is frequently targeted by car thieves or is expensive to repair, it will be costly to insure.
  • Join a telematics program. When you sign up for a telematics program, you give permission to your insurer to monitor your driving habits, usually through a mobile app. Good drivers can get discounts of up to 25%.
  • Ask about usage-based insurance. Your annual mileage is used to calculate your premium and it’s estimated up-front. If you end up driving less than you thought you would, a usage-based insurance program will help you save. These programs offer sign-up discounts and reward good driving behaviours with additional savings.
  • Get listed on your parent’s policy. Getting your own insurance policy is expensive when you’re a new driver. One way to avoid high premiums is to get listed as a secondary driver on your parents’ policy. You'll build a driving and insurance record, which saves you money in the present and also helps save you money down the road. You don't even have to live at home or own a car to be listed as a secondary driver.

To ensure you’re always getting the best auto insurance rates for new drivers, we recommend comparing rates. A lot of new drivers lock into the first insurance company that comes their way, but LowestRates.ca data shows that young drivers find the most savings when they compare. The more you’re expected to pay, the more dramatic the savings.

Zandile Chiwanza

Zandile Chiwanza

About the Author

Zandile is a Personal Finance Writer at LowestRates.ca. Before joining the team Zandile worked as the content editor for Real Estate Management Industry News. As a self-proclaimed budget warrior, Zandile dedicates most of her time to advocating for financial wellness.

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