Get an insurance quote before you purchase a vehicle
It's important to start shopping for auto insurance before purchasing a vehicle. Ontario has compulsory automobile insurance. This means every vehicle registered in the province must be insured.
This auto insurance law established the bare-minimum levels of car insurance for drivers on the road so that people wouldn't be left without a means to recover and support themselves if another driver involved them in an accident.
You must show proof that you have insurance coverage before you can register a vehicle or renew your registration.
The average cost for full coverage auto insurance will vary, depending on your home address, driving record, and other variables. To provide an idea, the average cost to insure the top selling vehicle in Canada (Ford F150) is approximately $1,900 a year*. This is a sizeable chunk of the overall cost of owning a car, but getting a quote ahead of time will allow you to confirm that this compulsory expense will fit into your budget.
You will also have peace of mind knowing that your car is completely protected from accidents caused by you or others.
If purchasing a car for the first time, full insurance is required before driving off the lot. But if you’re replacing a car, most car insurance companies allow a grace period. This is an amount of time- typically 6 to 14 days- that the vehicle will be covered, even if you haven’t called your insurance agent to report the new purchase. The length of the grace period varies by insurer. The grace period is applicable if the new purchase was a cash deal and the current policy includes a grace period clause.
Taking Out a Loan
Many people require a loan to fund the purchase of a vehicle. Almost all lenders require the purchaser to obtain full coverage auto insurance when buying a car, such as collision, comprehensive, and liability insurance. The lender requires such extensive insurance coverage plans to ensure the vehicle is covered in the event of an accident, as they technically own the car until the loan has been paid off.
The lender, whether a bank or a financial institution, will give you an estimate for a car loan based on the car model and insurance coverage.
When you fully cover your vehicle, you will have protection from accidents and other damages such as theft or fire.
You can test drive a new car using the dealer’s fleet insurance, but to take it home, you’ll need your own insurance.
Buying From a Dealership
Many dealerships require proof of insurance before permitting a buyer to drive a new car off their lot. Even if the vehicle was paid in cash, the dealership will likely need to see proof of insurance to ensure you are covered when you hit the road.
If the dealership funded the car purchase, it's almost certain they won't let you take it off the lot without proof of insurance. Otherwise, you'll have to leave the car at the dealership until proof of insurance has been satisfied. Some dealerships offer insurance, which may be convenient, but oftentimes is not the best offer available in terms of cost and coverage.
Buying From a Private Seller
Completing a cash vehicle sale with a private seller doesn’t require proof of insurance. If the purchase involves a loan, insurance coverage will be needed to satisfy lender requirements.
Can I Buy Insurance Without a Car
Yes. Since it is illegal to drive without insurance, in most cases, you will have to buy insurance before technically owning the car. Your insurer will require your personal information and information about the vehicle. If you've already decided on the exact vehicle, the insurer will require the make and model, along with the VIN (vehicle identification number.)
This will allow the insurer to provide adequate coverage to drive off the lot legally after purchasing the vehicle.
Common Types of Car Insurance
It's essential to review your specific needs, but generally speaking, most people buy a combination of comprehensive, collision, and liability insurance.
How Long Does it Take to Get Car Insurance
It depends, but buying car insurance is typically quick, and in many cases, can be purchased the same day or day before buying a car.
You can obtain a quote online, in person, or over the phone. Online is typically the fastest option. Using a broker will allow a quick comparison of multiple insurers. This will help you get the best deal in one stop versus having to reach out to multiple insurers on your own.
When getting a quote, you will need to provide general personal information, like your name, birth date, address, plus information about the vehicle, such as year, make and model.
If you require a policy for a specific vehicle (versus a general quote), you will need the vehicle's identification number (VIN), any current insurance information, driver’s license number, and other personal data.
Sometimes it does take more than a day to get car insurance, so it's best to start the process sooner than the day you need it to avoid delays.
Factors That Will Affect Your Insurance Rate
If the driver has previously been charged with a DUI, license suspension or other driving infractions, the insurance rate will increase considerably.
First Time Driver
First-time drivers, regardless of age, generally pay a much higher premium versus experienced drivers. This will decrease over time as the driver displays competency and responsibility with a clean driving record.
Similar to the first time driver scenario above, simply the age of a driver can significantly increase insurance premiums. This is why many young drivers are turning to usage-based car insurance.
Ways To Save On Auto Insurance
Here are a few of the best ways to save money on car insurance.
- Shop around - The best way to save money on auto insurance is to shop around, as every insurer may charge a different rate for similar coverage.
- Bundle - Insurance companies give discounts if you bundle multiple cars or your home and auto with the same company. See our blog post "How Bundling Your Insurance Can Save You Money" for more information on bundling.
- Safe Driver - It pays to be a safe driver, as insurance companies tend to give discounts to drivers without accidents on their records.
- Telematics - Many insurance companies now offer telematics to track drivers and their driving habits. Choosing this option can help save money on insurance, depending on driving habits.
Buying a new car can be exciting, nerve-racking and complex. Knowing all of the costs involved in car ownership can help reduce the stress of the journey, including fuel consumption, maintenance, and insurance, which is mandatory in Ontario.
One of the most significant factors regarding car insurance premiums is the make and model of the vehicle. To get an idea of the insurance cost of "Canada's Top 2 Vehicles in 2021", check out our two blog posts: "F150 Insurance: How Much Does It Cost In Ontario" and "Honda Odyssey: How Much Does Insurance Cost In Ontario."
The best way to get insurance for your new vehicle is through an insurance broker, versus an insurance company. Insurance companies sell their own insurance products, which limit your options. When you work with an insurance broker such as Best Buy Insurance, they’re able compare dozens of various quotes from different insurance companies. This enables the broker to quickly find the best coverage and rates overall.
Ready to find the best car insurance rates and coverage for your needs? Call Best Buy Insurance at 1-877-813-5710 or request your car insurance quote online. It’s free and there is no obligation. Find out how much you could save today.
*Age: 40; Monoline; $2,000,000 Liability, standard SABS;$500 Coll; $500 comp; 44; 20/27; 43, 15 km commute; 15,000 annual km, Winter tires; parking in private driveway, vehicle purchased new, driver licensed at earliest date and has driver training.
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