As geopolitical tensions have caused gas prices to skyrocket all across the country, many Canadians are looking for ways to meet their budget. If you’re one of the many drivers that have reduced their mileage in an attempt to save a few dollars, you may be missing out on a car insurance discount.
How to get cheap car insurance for driving less
Ask your auto insurance company for a discount
Auto insurance companies use many factors to calculate your exact car insurance quote, and the distance you drive is a big one – longer distances lead to more expensive premiums. That’s because the more you take out your car, the more likely you’ll need to make a claim whether it be for a collision or a break-in. But just as driving less often means you’re less likely to make a claim, it also means you can get cheaper car insurance.
So if you’re driving significantly less due to high gas prices, it’s time to contact your auto insurance provider and ask for a discount. The amount you’re able to save will vary depending on the change in your daily commute or annual mileage, but making one quick phone call could be potentially worth hundreds of dollars in savings.
Switching your policy’s vehicle use designation from business to pleasure is another factor that could lead to a substantial rate reduction. Let’s say you used to drive to client meetings daily, but the high cost of gas has made it no longer financially sustainable. So while you’re getting a lift from your colleague and your car is only used on the weekends for a quick grocery run, you can notify your insurer of the change (and save on car insurance).
Switch to usage-based insurance
If you’re currently shopping for new car insurance, opting for a usage-based insurance (UBI) policy can lower your rate substantially, especially if your driving is limited due to the high price of gas.
Usage-based insurance is essentially just what it sounds like – insurance premiums calculated based on your usage (also known as your driving behaviour). With a telematics device in your car or a mobile app on your phone, your auto insurer is able to track different factors such as braking, turning, acceleration, and distance. By proving that you’re either a safe driver or a limited-distance driver (or both), you could rack up substantial savings on your car insurance policy.
While pay-how-you-drive insurance rewards good driving behaviour with lower premiums, you’ll probably benefit most from a pay-as-you-go UBI system if you’re no longer driving much due to inflated gas prices. With CAA’s MyPace program, for instance, the amount you’re able to save increases as you reduce your distance travelled – driving 7,000 km annually can give you up to 15% in savings while driving 4,000 km annually can reduce your premium by up to 40%. So if the price of gas may turn you into a low-mileage driver for the long run, this type of UBI could be worth considering.
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Electric vehicles and your car insurance rate
Because gas prices are becoming more and more unpredictable, you might also be considering a hybrid or electric vehicle (EV) when purchasing your next car. But what does this mean for your car insurance rate?
Electric vehicles aren’t necessarily always more expensive to insure when compared to conventional cars. One factor that can increase your premium on an EV or hybrid car is the expensive cost of replacing the battery. But keep in mind that your premium is based largely on the vehicle model you select, instead of whether or not it runs on gas. Generally speaking, the more expensive your vehicle costs to repair or replace, the more you’ll be paying for coverage – so expect to pay much more for insurance for a Tesla Model S than insurance for a Toyota Corolla Hybrid.
Green vehicle discounts for electric cars
The good news is that many car insurance companies offer green vehicle discounts which can offset a hike in your insurance rate. For instance, Aviva customers are eligible for a rate reduction of up to 5% when insuring an electric or hybrid vehicle. And because many EVs are equipped with safe-driving technology, the insurer also offers up to 15% off for green vehicles with a manufacturer-installed automatic emergency braking system.
The total cost of car ownership when purchasing a green car can also be reduced by government incentives. With Canada’s Incentives for Zero-Emission Vehicles program (iZEV), you could be eligible for incentives up to $5,000 or up to $2,500, depending on the type of electric or hybrid vehicle you own.
The bottom line
Although you can’t control the price of gas, you can seek out cheaper car insurance rates during this time – asking for a low-mileage discount, switching to usage-based insurance, and seeking green vehicle savings are great ways to save on the cost of your coverage. And above all, you can always compare car insurance quotes with us to make sure you’re getting the best rate possible.