For many new drivers, getting your driver’s licence is a rite of passage — you’re finally on the road to independence (literally!) If you’ve recently got your G2 driver’s licence, you probably have questions about the cost of driving. Most notably, insurance. While you may be excited to hit the road, it’s essential to be educated about the cost of car insurance for G2 drivers.
The cost of car insurance with a G2 licence
In Ontario, insurance for G2 drivers can be anywhere between $1,700 and $5,000 annually. G2 drivers typically pay more than experienced drivers with a full license. Factors that affect cost:
- Age: Younger drivers are considered high-risk and pay more for insurance.
- Location: Crime rates, natural disasters, and population density affect G2 insurance costs.
- Driving history: New drivers with less experience are likelier to be involved in accidents.
- Insuring their own vehicle.
- Added to their parent’s insurance as an Occasional Driver.
The main criteria for determining rates for new drivers is their experience behind the wheel. Drivers who only have a few weeks or months of driving experience are more prone to accidents and less prepared to handle unforeseen incidents (cars stopping abruptly, animals crossing the road, etc.). Consequently, new drivers are considered ‘high risk’. Car insurance companies need to charge G2 drivers more for coverage to offset the additional financial risk they present.
In Ontario, adding an inexperienced driver to your policy is relatively cheaper than purchasing a separate vehicle and a new policy. However, your insurance company will charge additional premiums for adding another driver to your auto insurance policy. Your insurance company should be notified when a driver has moved to another licence class, which will affect your premiums.
Can I buy a car with a G2 licence?
Yes. Anyone in Ontario can buy a car. Regardless of your license class, you can buy a vehicle from a dealership or private seller anytime. You do not need insurance or a licence to buy a car. However, you will not be able to drive that vehicle without having a valid driver’s licence. Additionally, you’ll have to obtain your own car insurance policy if you purchase your vehicle. The exception is if your parent or guardian puts the car under their name.
How much does insurance go down from G2 to G?
Graduating to a G licence indicates that your child now has additional knowledge and experience. Many insurance companies will give a discount when the licence changes. It is not uncommon to see a decrease of approximately 10%. This helps to reduce the risk of the insurance company providing coverage.
How to cut the cost of insurance for a G2 licence
There are several ways that G2 drivers can save money on car insurance in Ontario. Some standard methods include:
Graduated licence discount
Drivers who progress through the graduated licensing system should receive a rate reduction of 5%-15% on all coverages (while under the age of 25). This is provided that you have no chargeable convictions or at-fault accidents when entering into Level Two (Class G2 licence). This reduction is applicable for one year. Similarly, you should receive a 10 percent rate reduction on all coverages when you become fully licensed (Class G license), provided you have no chargeable convictions or at-fault accidents during Level Two. This reduction is also only available for one year.
MTO certificate insurance discount
In Ontario, if you complete a beginner’s driver education course certified by the Ministry of Transportation, you can collect a driver’s licence history document from any ServiceOntario centre. This will make you eligible for a potential discount on your auto insurance.
Check out these government-approved driving programs.
Install tracking devices
Some insurance companies offer lower premiums for drivers who install tracking devices. Usage-based insurance is also called telematics. It’s referred to by other names, including pay-per-use insurance, UBI, pay-as-you-drive (PAYD), and pay-as-you-go insurance. Not surprisingly, it’s becoming increasingly popular with drivers. UBI determines your premiums based on your driving behaviour. It rewards you for being a safe driver and having good driving habits with lower costs and discounts.
Not all insurers offer telematics. However, while their programs may differ, there are two main ways to participate in a UBI program:
- Using a UBI app: Downloaded onto your smartphone, the app will track your driving data in real-time.
- Installing a device in your vehicle: Your insurer will mail you the device to install in your vehicle. Once installed, it will track your data. You can view performance on the company website or through an app.
Good student
Drivers who are full-time students between 16 and 25 with a “B” average or better may qualify for an up to 10% discount.
Other ways to save on the cost of insurance for G2 drivers
If buying a vehicle
As a G2 driver, it’s essential to research if you’re considering buying your vehicle. Check to see which vehicles are known to have a good safety rating and that are inexpensive to repair. It’s perhaps best for a new driver to buy a car before they understand the insurance cost. Different cars and features affect insurance costs. So be sure to get accurate car insurance quotes for prospective vehicles while shopping, not after buying them. Please read our article to learn more about the best cars for teen drivers.
Clean driving record
Maintaining a clean driving record is the main way to keep a G2 driver’s insurance premiums low. We understand that accidents happen, but staying focused on the road and not falling prey to distracted driving will help you stay safe while you gain more experience behind the wheel.
Secondary driver
It is important to remember that once your child has their G2 licence, you will need to inform your isure broker of the change. If your child is using someone else’s car, it is also a good idea that they understand to be extra cautious. Ensure they realize they will use your policy and that any collision will affect your rates. You will want to make sure to list them as an occasional driver on your policy. This way, you and your child can save money until they get more experience and become fully licensed drivers. It’s wise for young G2 drivers to use their parents’ vehicle until they can afford to own their own car.
Use an insurance broker, like isure
Now that you have one more driver in the household viewing your coverage in light of this change may not be a bad idea. Our isure representatives can take some time commitment off your hands by researching you. We will shop for quotes from multiple insurance companies to ensure you get the best rate. Another insurance company may be able to meet your needs with reasonable rates but also offer better rates for the new driver. This exercise will only be worth it while the new driver remains on the parent’s policy. Once they intend to buy their vehicle after obtaining their G license, they must shop for their own insurance (unless the new car is put in their parent’s name).
Final thoughts on the cost of insurance for G2 drivers
Driving and vehicle insurance is a new experience for a new driver. Be sure to educate G2 drivers about the costs of car insurance and their responsibility to maintain a good driving record to help keep your insurance premiums down.
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