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Do Photo Radar Tickets Affect My Insurance Rates?

It’s been a year since photo radar began to be enforced in Community Safety Zones throughout Toronto, and the number of tickets being issued each month continues to rise. What was once a political hot potato is fast becoming a fixture around our schools. And while the consequences of being caught speeding by these devices don’t directly affect your insurance rate and driving record, it can have a big impact on your pocketbook.

We all know the feeling of suddenly realising you have just sped past a parked police cruiser doing 20 km/h over the speed limit. A big shot of adrenalin runs through your veins as you look in the rear-view mirror to see if those lights are going to start flashing. Nowadays that sense of dread can linger for days, spiking every time you open your mailbox.

But just what are the consequences of finding a speeding ticket in there, along with a photo of the back of your car? Well, to the driver, surprisingly little. It is the owner of the vehicle that bears the responsibility in the eyes of the law. So, the important thing is…be careful who you’re lending your car to!

I got a ticket in the mail. What does this mean for my auto insurance?

Under current regulations, Automated Speed Enforcement cameras (ASE cameras) are much like red light cameras in that they don’t affect your insurance premiums. The cameras are designed to take a photo of the licence plate of a speeding car, not the driver of the vehicle, so it is impossible for authorities to know who exactly is behind the steering wheel at the time of the infraction.

The resulting ticket is issued and sent to the registered owner of the vehicle, who is in turn responsible for it to be paid. Because the driver is unknown:

  • No demerit points are issued
  • No one’s driving record is affected
  • The registered owner’s insurance premiums remain the same

What’s more, the city does not grant access to the information gathered from these traffic tickets to insurance companies.
So, it doesn’t matter for your insurance policy if your son or daughter takes the car out for a spin and racks up a few photo radar fines. It won’t increase your rate, though it might take a toll on the Bank of Mom and Dad.

How much is a photo radar fine?

ASE devices (the fancy name for photo radar cameras) are set up in Community Safety Zones. These are areas where there are many children and elderly people crossing the streets, such as near a school or long-term care home. Because of this, the fines are more hefty proportional to the speed you are going.

Photo Radar Fines for Speeding
Km/h Over Limit Fine
1 – 19 $5 per km
20 – 29 $7.50 per km
30 – 49 $12 per km

Anything over 50 km/h and you will be summoned to appear in court where your penalty will be decided by a judge. So, make sure you’re not lending your car to any speed demons in the family! Telling the judge that it wasn’t you driving the vehicle is not going to get you off the hook.

Insurance tip


In Ontario, being detected speeding by a photo radar device is an owner liability offense.

Where Are Photo Radar Cameras Located?

There are 50 ASE devices installed around Toronto. They are located on local, collector and arterial roads in Community Safety Zones. The city has kept them away from the main highways and streets in order to reinforce the message that photo radar cameras are about safety for our children, not just a slick way of raising taxes.

Camera rotations

Still, photo radar locations are changed periodically, so if you have been planning your route in such a way as to avoid them, you may want to keep yourself informed. As of June 2021, the cameras will be set up in new spots under a so-called third round of locations.

Not only are photo radar areas well-indicated by signs notifying motorists of their presence, the city also provides a list of photo radar locations which includes a link to a map to make it all the more transparent.

Tickets issued

  • First round of locations: Enforcement began in July 2020, and the subsequent months saw just over 20,000 tickets issued per month.
  • Second round of locations: The cameras were moved to new locations in November 2020. By January 2021, roughly 30,000 tickets were being issued each month.
  • Third round of locations: We shall see…

The point of rotating the cameras, according to city spokesperson Hakeem Muhammad, is to deter drivers from speeding, increase speed compliance, alter driver behaviour, and to raise public awareness about the need to slow down.

Is photo radar here to stay?

It looks like it. Toronto Mayor John Tory has said, “Speed cameras are a proven traffic calming measure that we will continue to rotate across the city because we are committed to making our roads safer.”

For the most part, the public has come a long way on this issue since the days of Bob Rae’s NDP government, who were the first to introduce Ontarians to photo radar. After the government pulled in over $2 million in fines, opposition parties began to label photo radar “a cash cow”, until Mike Harris scrapped the program in 1995.

Since the reintroduction of photo radar in January 2020, the public has largely gotten behind Tory. Most of that comes down to the fact that they are exclusively located in Community Safety Zones. It’s hard to argue that motorists shouldn’t slow down to a safe speed in a school zone.

But are they as effective as the mayor suggests? Well, several other jurisdictions in Canada and the U.S. have implemented photo radar programs with great success:

  • In 2016, Quebec reported its program had reduced average speeds by 13.3 km/h and reduced accidents by 15% to 42% in the relevant areas
  • Saskatchewan saw speeds fall by up to 17% and speed-related injuries drop by 51%
  • New York City reduced speeding by 63% and pedestrian injuries fell by 23%

Additionally, a study done by the Insurance Institute for Highway Safety (IIHS) found that vehicles exceeding the speed limit by 10 km/h dropped 70-88% within eight months in the jurisdictions they looked at.

Is there a negative side to photo radar?

There don’t seem to be many arguments against placing photo radar cameras in school zones specifically, though there have been some concerns raised:

  • Due to the fact that no demerit points are issued, and nothing is put on your driving record, many people worry that this gives wealthy people carte blanche to speed
  • Some studies suggest that while cameras reduce the chances of being t-boned, there is a heightened risk of being rear-ended when people slam on their brakes as they enter these zones
  • And of course, there’s the slippery slope argument that as the city gets used to the revenue they generate, more and more cameras will be installed throughout the city

In the end, it looks like we will be dealing with photo radar indefinitely. So, the best way to avoid a ticket, other than changing your route, is to simply slow down when you’re near a school. And be prudent about who gets behind the wheel of your car!

If you have any questions about how speeding tickets, especially those issued by a police officer, may affect your insurance rates call Mitchell & Whale now at 1-800-731-2228.

Have us shop the best car insurance companies in Ontario for you.

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Contact a Mitchell & Whale broker to get a quote on Ontario auto insurance: Speak with a broker today: 1-800-731-2228

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Photo radar on highway
Smiling young drivers sitting in a car

The Best Insurance Companies For Younger Drivers

What auto insurance company is the best in Ontario for young drivers? Turns out the answer is different depending on whether you’re a man or a woman. For female drivers 25 and under, Aviva has the best average premiums. For males, it’s Intact. But it gets even more complicated than that. We ran quotes for 12 young drivers in our quoting system, and seven different insurance companies had the best rate for at least one of them.

Finding the best auto insurance company for young drivers is no easy task. The first thing you need to know is that insurance companies see young men very differently than young women. So we created 12 different fictional driver profiles, six men and six women, all 25 or younger, and ran quotes for them. As suspected, the story was a little different for men than it was for women.

For males aged 25 or under, we found that Intact Insurance has the best rates, on average, in the province. For females in the same age bracket, Aviva Canada offers the lowest average auto insurance premiums. But that just scratches the surface of what we learned.

Key Findings:

  • Aviva Canada has the best auto insurance rates, on average, for females 25 and under.
  • Intact Insurance has the best average rates for male drivers 25 and under.
  • Seven different insurance companies (Aviva, Intact, Pembridge, SGI, CAA, Coachman, Jevco) offer the best rate for at least one of the 12 driver profiles we created.
  • Aviva appears to be the best insurer for young G2 drivers, regardless of gender.

Before we go on to share the details of our study, it’s important to note that there’s much more to determining the best insurance companies than just price. We focus on price here because it’s the one factor that definitely varies by age. Check out our Best Insurers blog post, where we talk about other factors like service and claims experience, and share Google and JD Power ratings.

The Rankings

Here is how our top auto insurers stack up against each other when it comes to prices for young drivers.

Best Insurers For Young Men
Regular marketHigh-risk 1
1. Intact1. Coachman
2. Aviva2. Jevco
3. Pembridge3. Pafco
4. Travelers
5. SGI Canada
6. CAA
7. Wawanesa
8. Gore Mutual
Best Insurers For Young Women
Regular marketHigh-risk 1
1. Aviva1. Jevco
2. SGI Canada2. Pafco
3. CAA3. Coachman
4. Intact5. Gore Mutual
6. Gore Mutual
7. Pembridge
8. Wawanesa
9. Travelers

1Note that these high-risk rankings for young drivers are based on one quote for a male and one quote for a female.

In order to be a useful ranking, we had to generate separate lists for men and women, and for high-risk vs. regular market insurers.

High-risk insurers are ranked separately because the nature of the customers they take on (drivers with a history of non-payment of premiums, at-fault claims, tickets etc.) means that their premiums are naturally higher than those of regular market insurers.

Rankings for male and female drivers are separate because young men are statistically much worse drivers than young women, and are viewed very differently by insurance companies. This difference fades with age, and all but disappears by age 25.

How we came up with the rankings

There are a number of ways to evaluate insurance companies. You can base it on how easy it is to get a quote and buy a policy, reviews of their customer service, or the experience of policyholders who have had to make a claim. Because in this case we are talking about how insurance companies cater to a particular market, the only way to reliably rank them is on price, as that is the only factor that is significantly different for young drivers.

So to determine how insurance companies perform in terms of pricing, we created 12 fictional driver profiles, six men and six women, and ran quotes for each of them. Although the drivers are made up, the prices we generated accurately reflect what someone with similar circumstances (age, gender, location, driving record) would pay in the real world.

Just to make sure we compared apples to apples, all of the quotes were based on the same coverages, policy limits, deductibles and discounts, as follows:

  • With the exception of G2 drivers (Riley and Isa), everyone got their G1 the day they turned 16, G2 one year later, and G license one year after that
  • Winter tire discount was included on all quotes
  • No honour student discounts
  • No multi-vehicle or home bundle discounts
  • Coverage details:
    • $1 million liability coverage
    • Zero deductible for direct compensation claims
    • $1,000 deductible for collision and comprehensive claims
    • Accident forgiveness where available
    • Replacement cost coverage where available (mostly for cars under three years old)
    • $1,500 coverage for loss of use (rental car)
    • $50,000 coverage for damage to unowned vehicle (rental, loaner, etc.)
    • Family protection endorsement in case you or your family are injured by another driver who’s inadequately insured

Meet our young male drivers

We ran quotes for the following young male drivers:

  • Riley, Male, 17 (G2 license), single, Woodstock (N4T), clean record
    Drives a 2017 GMC SIERRA 1500 CREW CAB 2WD
  • Keegan, Male, 20, single, Cornwall (K6K), following too close in 2018
    Drives a 2010 VW GOLF 2.0 TDI WAGON
  • John-Paul, Male, 21, single, Burlington (L7P), clean record
    Drives a 2010 TOYOTA MATRIX WAGON
  • Hakim, Male, 23, common-law, Goderich (N7A), at-fault and speeding in 2017
    Drives a 2014 NISSAN 370Z ROADSTER
  • Jock, Male, 25, married, Lindsay (K9V), speeding in 2018
  • Zachary, Male, 24, divorced, Port Hope (L1A), speeding in 2019, 2020, impaired and at-fault in 2021
    Drives a 2011 ACURA TSX SPORT WAGON

And here are the quotes. Note that Zachary was not included when we calculated average premiums, because his record makes him a high-risk driver, and so his best quotes are from high-risk insurers.

Rates provided by Mitchell & Whale’s car insurance quoter, with access to 40+ insurance companies in Ontario. Note: If Zachary lived in Toronto, his best insurer would be Pafco, and he’d be paying over $10,000 a year.

Rates provided by Mitchell & Whale’s car insurance quoter, with access to 40+ insurance companies in Ontario. Note: If Zachary lived in Toronto, his best insurer would be Pafco, and he’d be paying over $10,000 a year.

Ontario Car Insurance Quotes For Young Male Drivers
  Riley (17, G2) Keegan (20) John-Paul (21) Hakim (23) Jock (25) Avg Zachary (24)
Intact $6,000 $2,195 $2,267 $2,649 $1,819 $2,986
Aviva $4,683 $2,647 $2,491 $3,347 $2,291 $3,092
Pembridge $6,198 $2,864 $2,745 $3,508 $1,786 $3,420
Travelers $7,021 $2,896 $2,761 $3,264 $1,795 $3,547
SGI Canada $9,120 $2,370 $2,532 $2,255 $1,966 $3,649
CAA $6,967 $5,122 $3,594 $3,133 $1,794 $4,122
Wawanesa $8,686 $3,424 $3,947 $3,291 $2,493 $4,368
Gore Mutual $8,667 $3,880 $5,364 $2,450 $2,692 $4,611
Coachman $5,053
Jevco $5,139
Pafco $5,991

Rates provided by Mitchell & Whale’s car insurance quoter, with access to 40+ insurance companies in Ontario. Note: If Zachary lived in Toronto, his best insurer would be Pafco, and he’d be paying over $10,000 a year.

Intact is the clear winner with young male drivers in the regular market. They have the lowest average, offer the best quote for two drivers, and they are no worse than fourth on any profile. But if you’re Riley (G2 driver), Intact will cost you 28% more than Aviva.

Meet our young female drivers

We ran quotes for the following young female drivers:

  • Isa, Female, 18 (G2 license), single, Kanata (K2L), clean record
    Drives a 2017 FORD FOCUS ELECTRIC 5DR
  • Wren, Female, 19, single, Scarborough (M1G), speeding ticket in 2019
    Drives a 2016 CHRYSLER 300 S 4DR
  • Akilah, Female, 22, single, Kenora (P9N), clean record
    Drives a 2015 CHEVY IMPALA LS 4DR
  • Karlee, Female, 23, married, Whitby (L1N), at-fault claim in 2018
    Drives a 2019 BMW 330i Xdrive 4DR AWD
  • Grey, Non-binary2, 25, common-law, Georgetown (L7G), speeding ticket in 2019
  • Dalilah, Female, 20, married, Strathroy (N7G), impaired driving and speeding in 2020

2 Non-binary or gender X drivers are rated as males, then as females, and are given the lower of the two rates. For young drivers, this effectively means they are rated as females.

And here are the quotes. Dalilah was not included when we calculated average premiums because the best quotes are from high-risk insurers.

Ontario Car Insurance Quotes For Young Female Drivers
  Isa (18, G2) Wren (19) Akilah (22) Karlee (23) Grey (25) Avg Dalilah (20)
Aviva $3,099 $7,432 $2,580 $5,378 $2,662 $4,230
SGI Canada $3,568 $8,432 $2,207 $6,450 $2,349 $4,601
CAA $3,352 $9,669 $2,089 $5,799 $2,446 $4,671
Intact $3,589 $10,679 $2,172 $6,244 $2,222 $4,981
Gore Mutual $5,040 $8,451 $2,608 $6,762 $2,348 $5,042
Pembridge $5,290 $8,596 $2,688 $6,081 $2,737 $5,078
Wawanesa $5,195 $10,570 $2,531 $7,287 $3,301 $5,777
Travelers $5,462 $12,443 $2,899 $5,835 $3,108 $5,949
Jevco $3,667
Pafco $5,573
Coachman $7,208

Rates provided by Mitchell & Whale’s car insurance quoter, with access to 40+ insurance companies in Ontario.

For young women drivers, Aviva is the overwhelming winner, with the lowest average quote, and offering the best price for three out of six profiles. But if you happen to be Grey or Akilah, you don’t care that Aviva loves young female drivers, because their quote for you is 20-25% higher than the lowest rate offered by another insurer. The moral of the story is that insurance pricing is very specific to the individual, and the only way to know you’re getting the best rate is to get quotes from as many companies as you can.

Will these rankings change over time?

Rankings based on rates are accurate at the time the quotes are run. History shows that some companies remain competitive over years in certain market segments, but exact rates often vary every few months and certainly over a year or more.

The rankings in this piece are based on rates that insurance companies file every quarter with the Financial Services Regulatory Authority of Ontario (FSRA). Not every company changes their rates every quarter, but many do, and they have to justify their new rates with evidence of how much money they’ve spent in paying claims. When a company has a quarter with lower claims costs for a particular market segment, say young drivers, they may reduce their rates for that segment. If their claims go up, well, obviously they will have to collect more premium to cover those costs, and rates will increase.

So the auto insurance market is constantly fluctuating, with some companies lowering rates to attract more of a particular type of customer, and others increasing rates for that same group, just to stay profitable. It’s not likely that one insurer will be the cheapest in a given segment for very long. If they are, and they can make a profit, eventually others will lower their rates to try to mimic their success.

How can young drivers save on auto insurance?

1. Get insured under your parents

All of the quotes included in this piece are for standalone policies, meaning that the person in question is the primary driver on the vehicle. By far the most affordable way for young drivers, especially those under 20, to gain experience is to be listed as an occasional driver on their parents’ policy.

Take Keegan, for instance. He’s 20, lives in Cornwall, and had a conviction for following too close in 2018. On his own, his best rate would be $2,195 with Intact Insurance. But assuming he’s still living with his parents, he could be listed as an occasional driver on the same car for only $917 more than his parents are already paying with CAA (only $339 if he was a girl). This can make an even bigger difference in the GTA, where rates are much higher for young drivers.

2. Prove you’re a good driver (telematics)

Even if you’re a conscientious, safety-oriented individual, you are paying for the sins of every young driver that came before you, because you haven’t had a chance yet to build a 10 or 20-year record of clean driving. This can seem incredibly unfair, especially for young men, who even with a clean record, can sometimes pay three or four times the provincial average for insurance.

The only way for young drivers to mitigate this effect is to opt for a telematics device that measures how you drive and can save you big bucks if you drive safely. To illustrate, we ran quotes for a G1 driver, Erik, whose best rate would ordinarily be $5,051 with Aviva, but if he opted to go with telematics, he would automatically get a 10% discount for signing up with Intact’s “my Drive” program. So his base rate would be $4,672, and could go as low as $3,884 by the end of the policy term if he drove like a saint3.

Important note: If you opt for a telematics program, you’ll have to install a device in your vehicle, or download an app to your phone, that measures things like how much you drive, what time of day you drive, and how quickly you start and stop.

3. Avoid tickets and accidents

If you’re 50 and you’ve been driving for 30 years, having one speeding ticket or even an at-fault on your record won’t necessarily affect your premium that much. If you’re under 25, tickets and at-faults will cost you dearly.

In the quote examples above, Wren’s best rate, with Aviva, is $7,432. If she didn’t have a speeding ticket on her record, Aviva would still be her best choice, but the premium would be $5,467. That’s an extra 36% she’s paying, for one speeding ticket.

3 Most users save 10%. You’ll only get the maximum 25% discount by severely limiting your kilometres, avoiding rush hour driving, and making sure all your starts and stops are gradual.

Your best insurer is here

We want all Ontario drivers to end up with the insurance company that is best suited to their individual needs. Depending on who you are, how old you are, where you live and how clean your record is, your best insurance company could be any one of seven or more. There’s really only one way to always hit the bullseye. Shop with a licensed insurance brokerage like Mitchell & Whale. With 40+ insurance company partners, we’ve got the best insurer for you, regardless of your circumstances. We’re waiting for your call.

Have us shop the best car insurance companies in Ontario for you.

Get a Quote Now

Contact a Mitchell & Whale broker to get a quote on Ontario auto insurance: Speak with a broker today: 1-800-731-2228

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Woman with rolling suitcase walking down the road

Moving Out of Province: Can My Car Insurance Come With Me?

In Canada, the reality of moving to a new province means cancelling your current insurance policy and purchasing a new one in whatever province you now call home. Each province has their own laws governing car insurance, so it is necessary to get a new policy when you move…and this can come with some unexpected headaches and fees.

With the changes that have come recently to the workplace, and the increasing reality of working remotely, there is plenty of news around these days of Torontonians and other big city dwellers packing up their cars and leaving the city, with many even deciding to head to the coasts on a new life adventure or just to return to their hometowns.

Moving to a new province can be an exciting opportunity, but it’s important to remember all those little details that can easily be overlooked until it’s too late, such as what the implications are for your car insurance policy.

Why Do I Have to Cancel My Current Policy When Moving to a New Province?

“I ain’t gonna pay it!”

So a friend of mine recently exclaimed shortly after learning that he would have to pay a cancellation fee on his existing Ontario car insurance policy before purchasing a separate policy from the same company in his new home province of Nova Scotia.

First of all, let’s be clear that any cancellation fee you pay when you move to another province in Canada is charged by your insurance company, not your broker. It applies to any policy that is canceled before the end of the policy’s term.

When you purchase an insurance policy you are essentially buying one year of coverage and then financing it over a full year. So when you cancel halfway through that term it is unlikely that your payments are balanced with the number of days you have actually used. This has to be reconciled. The insurance company also has a right to add on a small cancellation fee to account for administrative costs related to your policy.

This is understandably frustrating when, like my friend, you wish to use the same company in your new province. But there is a very good reason for this:

The Ontario Automobile Policy (or OAP1)

In Ontario, auto insurance is regulated such that all insurance companies sell the same product. That product is called the ‘Ontario Automobile Policy- OAP1’. So the insurance companies that operate in Ontario are licenced to sell only a policy that is specific to Ontario and is not valid or offered to people outside of Ontario.

So even though you would like to keep the same company, you are not able to keep the same policy, for the simple reason that the Ontario Automobile Policy is only licenced to be sold in Ontario to Ontario residents.

It would be like wanting to keep your OHIP in a different province. Both are insurance policies that are specific to Ontario, the only difference being that auto insurance is sold by private companies in most provinces and not the government.

Reminder: B.C., Saskatchewan and Manitoba have a public insurance scheme in which the government is the exclusive seller of car insurance, but the same rules apply.

How Much is the Cancellation Fee? Shouldn’t I Be Getting a Refund?

If you paid your yearly premium upfront and in full, then yes, you will get a refund if you cancel your policy halfway through the term. But you will still be paying some sort of cancellation fee in order to compensate the insurance company for costs they have incurred.

If, on the other hand, you do as most people do and pay that premium through monthly installments, then the calculations get a little more complex depending on how many installments have been paid, how early you canceled your policy, and how many days into a month the cancellation occurs. This can sometimes result in you owing more money.

Pro-rata V Short-rate Cancellations

You will only get what is called a “pro-rata” cancellation, which refunds you the full amount of your unused portion of your premium, if the company itself decides, for whatever reason, to cancel the policy.

But when it is you who is canceling the policy early, a short-rate cancellation table is the standard way in Ontario of calculating the outstanding amount. A short-rate calculation means you are not entitled to a refund proportionate to the coverage period left in that term, as the company will retain a certain amount of the refund as a penalty.

The reason: As you might imagine, the average cost of insurance and administration is higher for policies priced over a shorter amount of time. The main reason for this is that most administration costs are upfront for the insurance company, but they spread that cost over the full year term.

So when you cancel a policy early the company has a right to impose a penalty to make up for the portion of those administration costs that have not yet been paid. As an example of how they calculate this amount, here is a slimmed down version of a short-rate table insurance companies might use:

Days Policy in Force% of Premium Retained

As you can see, the earlier you cancel the policy the larger the proportion of the premium the insurance company will retain. Even though 10 days in you have only used about 3% of your policy, they will retain 10% of the yearly premium. This disparity lessens as the policy’s term comes closer to its end date.

Keep in mind, every company uses its own unique short-rate table. Some companies start as high as 25% from day one. While others might add on other charges. Before you move, check with your insurance company as to what these charges and fees will mean to your wallet, as they vary from company to company.

Insurance tip

Remember to Bridge the Gap!

Make sure there is no lag time between policies. You don’t want to be driving in your new home province without coverage. And keep in mind that a gap in your coverage history can affect your overall rating and increase your premiums.

How Long Can I Drive Out of Province on my Current Policy?

If you are taking up residence in another province, you have a certain grace period in which to change your insurance and registration. This grace period is determined province to province. In Ontario it is 30 days, but can be as high as 90 days in others. Check with your local registry agent and insurance broker to find out how long you have.

If, on the other hand, you are merely spending the summer months on the coast in order to take advantage of your ability to work remotely, and are not intending to reside their permanently, this should cause no problems for your current Ontario insurance policy. You will still be covered, and there’s no need to change your policy.

Just keep in mind that if that temporary working vacation involves you using your car more on a daily basis because you’ve decided to work even more “remotely” than usual, you should notify your insurance company, as your premiums are partly calculated on how much you use your car and what you use it for.

Does My Insurance Experience Move Along With Me?

Yes. Wherever you move within Canada and the United States you will not have to pay the rates of a new driver. But there are a couple of things you should do before you move:

  1. Request a “Letter of Experience” from your current insurance company. This will provide information about your insurance history, such as:
  • Total time insured
  • Any previous policy cancellations
  • All claims filed against the policy
  1. Obtain a copy of your “Driver’s Abstract” from Service Ontario. This provides information about your driving history, such as:
  • Any conditions or restrictions imposed on you
  • Driver education courses completed
  • All prior convictions and demerit points
  • Any replacements, renewals, and class changes
  • Due dates for medical exams, especially for commercial drivers

These are both easier to get while you are still living in Ontario. So think ahead, and don’t let your new adventure be ruined by these unexpected details!

Moving to Ontario? Let us help get you settled…

If you’re coming this way to Ontario, let us give you a hand getting settled in our beautiful province by helping you bridge that gap and get the car insurance that’s right for you precisely when you need it…

We work with more insurers. Call us to find the best one for you.

Get a Quote Now

Contact a Mitchell & Whale broker to get a quote on Ontario auto insurance: Speak with a broker today: 1-800-731-2228

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Car keys being handed over after purchase

New Car vs. Used Car: How Will it Affect My Rate?

Does buying a used car save you a significant portion of your monthly transportation budget? The truth is that, generally speaking, it is not necessarily cheaper to insure a used car than a new one. Much of it depends on the make and model of the particular car, the insurer you choose, and things like your driving record, your age and gender, and the amount you use your car.

Slipping into a brand new car is an unforgettable experience for almost all of us. Still, the choice between buying a new or used vehicle can be a tough one for many. To inform the discussion, we compare insurance rates for new vs. used vehicles.

Example Quotes for New and Older Vehicles

To give you an idea of what premiums you might expect to pay for new and used vehicles, we’ve run sample quotes for the same driver with a brand new car, and then with several older used cars.

Aliyah, single female, 37 years old, 1 minor ticket, Living in Toronto (Postal Code M2N)
VehicleFull CoverageBasic CoverageSavings
2021 Honda CRV EX-L 4DR AWD (Brand New)$1,956$1,47525%
2016 Honda CRV EX-L 4DR AWD (Used)$1,944$1,52721%
2011 Honda CRV EX-L 4DR AWD (Used)$1,901$1,57517%
2006 Honda CRV EX-L 4DR AWD (Used)$1,941$1,63916%

*Rates provided by Mitchell & Whale’s car insurance quoter, with access to 40+ insurance companies in Ontario.

Although the quotes and percentages above don’t necessarily reflect what you would see with a different driving record, different address and different vehicle, they do illustrate a general reality of auto insurance in Ontario: While premiums for optional physical damage coverage (collision and comprehensive) do come down with older cars, premiums for mandatory coverages (accident benefits, liability etc.) generally go up.

Will Buying a Used Vehicle Save Me On My Insurance Bill?

Those who own older cars do typically pay a little less for car insurance, but this isn’t necessarily because older cars are cheaper to insure. The biggest reason they are paying less is that the vast majority of cars lose value over time, faster in the first few years, and some drivers choose to remove optional coverages on much older cars.

The way insurance works is also different with a new car. Most insurers offer a waiver of depreciation for a car that’s less than 3 (or sometimes 5) years old. Meaning if the vehicle is totaled, you get a brand new car. On the other hand, if a ten-year-old car met the same fate, you would only receive enough to buy a comparable used car, which is likely less than 10% of the original value.

This disparity in potential payouts will be reflected in somewhat lower premiums for physical damage coverage, but as you can see from the table above, the cost of your basic (mandatory) insurance will go up, largely offsetting any savings. If at this point you remove all physical damage coverage, you will save some money, maybe 15-20%, but not nearly what you might expect given the diminished value of the vehicle.

The moral of the story is that your premium is affected mostly by the likelihood of you getting injured in an accident, not so much by the likelihood of having to repair or replace your car.

Should I Remove Comprehensive and Collision if Possible?

Based on industry statistics, collision coverage makes up roughly 20% of your premium and comprehensive coverage comprises just under 12%, so you may think that removing these two optional coverages is going to save you over 30% on your insurance bill.

But hold on a second. Your older car probably isn’t worth as much as the average car in Ontario, on which these figures are based. This means you won’t be saving 30% when you remove comprehensive and collision from your policy, as these coverages make up a smaller and smaller percentage of the cost.

The reality is more like this:

  • On a 10-year-old car, you might save 17-20%.
  • On a 20-year-old car, this would be more like 12-15%.

Accident benefits and third party liability are mandatory coverages in Ontario and make up the lion’s share of full coverage insurance rates. Since these coverages apply more to the people in the vehicle than the vehicle itself, these costs are not related to depreciation, and actually tend to go up with an older car. Premiums for these coverages hinge on the probability of injuries, and older cars are less likely to have the most recent safety advancements.

The Cost of Parts

Traditionally, insurance providers would sometimes reduce their rates as popular models got older since they would have more options for replacement parts. Whereas new vehicles need to be repaired using the same manufacturer’s (OEM) parts, older vehicles can be repaired with less expensive “aftermarket” parts, or parts not made by the car manufacturer itself.

Also, these days, the newer the car, the more likely it is to be equipped with enhanced safety features like backup cameras, lane departure warning and emergency brake assist, to name a few. Even though these features reduce the probability of a collision, resulting in a general reduction in the number of claims, the cost of each claim is driven up by the fact that many bumpers, windshields and even mirrors now have sensors and cameras that make them much more expensive to repair or replace.

For example, if you had a minor accident in, say, a 2005 Toyota Matrix, you could simply replace the bumper, and 500 bucks later, you’re all good. On the other hand, if you’re driving a more recent model, with all those sensors and cameras built into the mirrors and bumpers and calibrated to a computer that’s basically running your car, even a minor accident in which you merely dent the bumper can end up costing thousands of dollars.

So, as you can see, a lot depends on the specifics of the particular used vehicle you are driving, the availability of replacement parts for that vehicle, and just how “enhanced” it is.

Insurance tip

Insuring a classic car

Remember classic and vintage cars are insured in a completely different way than typical used cars. While a regular insurance policy may be a possibility, classic car coverage is most likely the way to go. This kind of coverage usually insures classic cars at a higher value than the list price, and limits mileage.

Does a Waiver of Depreciation Change the Equation?

If you are looking to minimize the effect of depreciation in the first 2-5 years of the life of your vehicle, and you want to be sure that you get a brand new replacement vehicle should your car be damaged beyond repair, you will need either GAP insurance or a Waiver of Depreciation.

Waiver of Depreciation

  • Seller: Bought through your auto insurer
  • Cost: $75 extra in the first year, and as little as $300 in the fifth year
  • Benefit: if your car is written off, your insurance company will buy you a new, similarly equipped car of the same make and model

GAP Insurance (Guaranteed Asset Protection)

  • Seller: Bought through your finance company
  • Cost: a lump sum added to your total loan amount – meaning you will pay a slightly higher monthly payment on that loan
  • Benefit: if your car is written off, any outstanding debts remaining after your Insurance company pays you the Actual Cash Value (ACV) of your car at the time of the accident are wiped clean

The fact is that both of the above are ways to increase your coverage in the event of a total loss, and both will make insuring your new vehicle somewhat more expensive. Hence, yes, it may change the equation, in that it makes insuring a new vehicle that much more expensive.

Note: A waiver of depreciation is only available to the first owner of the vehicle, while GAP insurance is typically available for any vehicle that is financed, regardless of whether it is new or used.

Can Sort it All Out for You

Here at Mitchell & Whale we know that the cost of insurance is a big factor when buying a car. So whether you are thinking of buying a new car, a used car, or even a classic car, be sure to contact a Mitchell & Whale broker, ideally before you make a decision. We can get you quotes on all the vehicles you are considering, and help you make the decision that is right for you, and your monthly budget!

We work with more insurers. Call us to find the best one for you.

Get a Quote Now

Contact a Mitchell & Whale broker to get a quote on Ontario auto insurance: Speak with a broker today: 1-800-731-2228

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