Whether you’re buying a car or borrowing your parents’ vehicle, you need an affordable auto insurance policy with the proper coverage. Finding cheap insurance is often a challenge, since new drivers typically pay the highest car insurance premiums. The good news is we have helpful tips for new drivers on finding car insurance. In this article, we look at 15 ways new drivers can save on auto insurance.
Why Are Rates So High for New Drivers?
There are several reasons why auto insurance premiums are more expensive for new drivers. The primary concern is that young drivers with limited experience are more likely to be involved in an accident and file a claim. Insurance companies base their prices on the level of risk each customer presents. Therefore, premiums will vary for each driver.
How Much Does Car Insurance Cost for New Drivers in Ontario (2025)?
Ontario remains one of the most expensive provinces for auto insurance. In 2025, the average annual premium for drivers in the province is approximately $1,750, though costs vary significantly by age, experience, and location. Vaughan remains the most expensive city for auto insurance, with estimated annual premiums averaging $2,350.
For newly licensed or young drivers, rates are much higher. In Ontario, a “new driver” typically refers to anyone with fewer than 3–5 years of driving experience (though some insurers extend this period up to nine years). Because drivers between 16 and 24 years old account for nearly 25% of serious collisions despite making up less than 10% of all drivers, they are considered high-risk. As a result, premiums for new drivers typically start at around $3,750 annually and can increase even higher, depending on the vehicle, location, and driving history.
By comparison, average annual rates across age groups in Ontario look like this in 2025:
- Millennials/Gen Z (16–33): $2,950
- Gen X (34–51): $2,350
- Boomers (52–70): $2,050
This makes it clear that while all Ontarians face steep premiums, new and younger drivers bear the highest costs.
Factors That Contribute to the Cost of Insurance
Several factors contribute to the cost of insurance. Here are some of the key considerations when calculating premiums for auto insurance:
- Type of car that you drive: New vehicles can be safer, but more expensive to insure, as older cars pose higher risks due to the lack of safety features.
- Your age, gender, and level of experience.
- Where you live: Urban areas tend to be more expensive due to congestion and higher theft rates.
- Driving experience in a relevant country: Unfortunately, many insurance companies do not count driving experience if it was earned in a country not among a select few.
As a new driver, you should be aware that it is mandatory in Ontario to have the following coverage on your auto policy:
- Minimum of $200,000 Third-Party Liability (TPL) insurance to protect you in case someone suffers injuries or property damages by you.
- Statutory Accident Benefits coverage for your own personal injuries following an accident, regardless of fault.
- Direct Compensation – Property Damage coverage (DC-PD) covers damage to your vehicle or its contents in an accident.
Do I Need My Own Insurance Policy?
If you plan to share a vehicle with another driver (such as a parent) and only drive occasionally, you can obtain secondary driver insurance, also known as occasional driver insurance. Secondary driver insurance is an affordable option because you don’t have your own policy. Instead, you are added to the main driver’s policy, and that person pays a higher premium. If you’re unsure of what constitutes a “secondary driver,” ask your insurer. Failing to abide by the rules of your policy could render your coverage void.
Ways for New Drivers to Save On Auto Insurance
Are you a new driver looking to save some money on your auto insurance? Let’s look at some ways that you can help reduce insurance premiums as a new driver:
For the reasons described above, there’s no simple answer to the question, “How much is insurance for a new driver?” However, by doing your research and utilizing our 15 ways to save on auto insurance, new drivers can find the lowest possible premiums that fit their budget. If you are in the market for car insurance, don’t hesitate to reach out to us at isure today!
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