You Have Your Licence. What To Do Next?
You have your license. This is a huge rite of passage.
If you haven’t already got one, you’ll probably be shopping for a vehicle. Of course that comes with yearly licensing fees, fuel to buy, and, oh yeah, insurance. The sticker shock for insurance can be severe. The reason, teenage drivers are inexperienced.To the insurance company you are an unknown quantity and, statistically, you are twice as likely to have an accident during that first year as drivers 25 and older. As a new and excited driver, you will generally drive faster and more recklessly than older drivers. Sure, there are plenty of exceptions, but insurance companies go by the statistics, not by how badly your Uncle George may drive.
If a company is going to take a chance on you, it’s going to cost you more until you prove yourself. You have the responsibility to show that you are not the statistical worst-case scenario they have seen many times before.
There are some good ways to help keep that premium as low as possible.
Avoid a flashy car for your first vehicle.
An older, cheaper, more sedate ride will not only get you cheaper insurance rates, but it attracts less attention on the highway from the officer with the radar gun. Remember, traffic tickets can raise your insurance premiums.
Do a little math.
The law will require you to carry liability, or third party coverage. However, if a bank or finance company holds the note on your vehicle, they will require you to maintain full-coverage until the loan is repaid. If you opt for an older, less expensive ride until you’ve established your good driving record, you may be able to avoid financing altogether, and save big money.
Avoid traffic tickets and making claims when you don’t have to.
If it’s a fender bender, think it through before you file a claim for repairs to your vehicle. It may be cheaper in the long run to fix it at your own expense. Some insurance companies will reduce rates for every year that a teenager does not have an accident or get a ticket.
Are you an honor roll student? Some companies will give you a better rate—you are statistically considered a better risk. Do you smoke? Quit, it’s not only bad for your health, but usually results in a higher premium.
For those who figure they can just play the odds and not carry insurance, think again. It’s not a smart bet. Get pulled over for any reason and you will be asked for proof of insurance. Failure to produce proof of insurance will result in two tickets instead of one, a court appearance and a heavy fine, or worse. This will end up on your MVR for the insurance company to see. Get involved in an accident without insurance and odds are you will also be receiving a letter from someone’s attorney.
There are a lot of good insurance companies out there. Be smart, go shopping.
Andrei Zakhareuski is the founder of Find-a-driving-school.ca. He has been writing for beginner Canadian drivers for several years.
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