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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 around the costs of driving. Most notably, insurance. While you may be excited to hit the road, it’s important to be educated about the cost of car insurance for G2 drivers.

The cost of car insurance with a G2 licence

Brand new drivers generally cost much more in car insurance than the average driver in Ontario. The average cost of car insurance for G2 drivers in Ontario is $2,400 yearly. That’s $200 per month! Other factors, besides driver experience, are taken into account when determining the cost of premiums for any driver. This amount of $2,400 is based on adding 25% to the average cost of vehicle insurance in Ontario. The average cost is $1,920 yearly. Some insurance companies may increase this by as much as 50%.

Why is auto insurance for G2 drivers so expensive?

For new drivers, the main criteria for determining rates is the amount of experience they have behind the wheel. Drivers that only have a few weeks or months of driving experience are more prone to accidents and are 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 in order to offset the additional financial risk that they present.

Other determining factors for insurance premiums are:

  • Age
  • Insuring their own vehicle
  • Added to their parent’s insurance as an Occasional Driver

In Ontario, it is relatively cheaper to add an inexperienced driver to your policy, compared to purchasing a separate vehicle and 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 up to another licence class, as this will affect your premiums.

Can I buy a car with a G2 licence?

Yes. Anyone in Ontario can buy a car. You are able to buy a vehicle from a dealership or private seller at any time, regardless of your licence class. You do not need insurance or a licence to buy a vehicle. However, you will not be able to drive that vehicle without having a valid driver’s licence. Additionally, if you purchase your own vehicle, you’ll have to obtain your own car insurance policy. The exception to this is if your parent or guardian puts the vehicle under their name.

How much does insurance go down from G2 to G?

The graduation to a G licence indicates that your child now has additional knowledge and experience. Many insurance companies will give a discount when there is a change in the licence. It is not uncommon to see a decrease of approximately 10%. This helps to reduce the risk of the insurance company providing insurance 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 licence), provided that 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 that’s certified by the Ministry of Transportation, you’ll be able to 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 here.

Good student

Drivers who are full-time students between the ages of 16 and 25 who have 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

1. If buying a vehicle

As a G2 driver, if you’re considering buying your own vehicle, it’s important to do your research. 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 cost of insurance. Different cars and features affect insurance costs. So be sure to get an isure car insurance quotes for prospective vehicles while you’re shopping, not after you’ve bought. To learn more about the best cars for teen drivers, click here.

2. Clean driving record

The main thing needed to keep a G2 driver’s insurance premiums low is to maintain a clean driving record. 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.

3. 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. It is also a good idea if your child is using someone else’s car, that they understand to be extra cautious. Ensure that they realize they will be using your policy and any collision will affect your rates. You will want to make sure to list them as an occasional driver on your policy. This way, both you and your child can save money until they get more experience and become a fully licensed driver. It’s wise for young G2 drivers to use their parents’ vehicle until they’re able to afford the expenses that come with owning their own car.

4. Use an insurance broker, like isure

Now that you have one more driver in the household, it may not be a bad idea to view your coverage in light of this change. Our isure representatives can take some of the time commitment off your hands by doing the research for you. We will shop around to get you quotes from multiple insurance companies to ensure you get the best rate. Another insurance company can perhaps meet your needs with good 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 on buying their own vehicle after they have obtained their G license, they will then need to shop for their own insurance (unless the new car is put in their parents 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 that you educate G2 drivers about the costs of car insurance and their responsibility to maintain a good driving record in order to help keep your insurance premiums down.

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