Before You Buy a Car, Compare Insurance Rates

Have you ever thought about how your choice of vehicle impacts your auto insurance rates? Most people assume that expensive cars cost more to insure than budget friendly choices, but is that really true?

How much you pay for your auto insurance relies on a number of factors. This includes your driving record and where you live, but for most people, the biggest factor is the model and year of the vehicle you drive.

Auto insurers use the Canadian Loss Experience Automobile Rating (CLEAR) system to determine the odds that a type of vehicle will be involved in a claim, and what that claim is likely to cost. This system is comprised of large amounts of claims data collected from insurers and is specific to the actual claims loss experience for each make, model and year of vehicle. The information is grouped and based on the assessed risk; each vehicle is assigned a CLEAR number. The higher the number assigned to a vehicle, the greater the risk to the insurer and the more you can expect to pay for insurance.

As a result of CLEAR, owners of vehicles with a lower than average claims risk, pay less for insurance. As this has little to do with the manufacturer’s suggested retail price (MSRP), the cost to insure many vehicles can contradict most people’s assumptions about auto insurance rates; in particular, that expensive cars cost much more to insure than cars with a much lower MSRP. A good example of this apparent contradiction is a 2010 Mercedes Benz E350. According to CLEAR, this car has a very low frequency and severity of claims. As a result, it is actually less expensive to insure than many vehicles costing less than half as much. This includes popular models like the Toyota Camry and Honda Civic. According to CLEAR, these cars are a much higher than average risk.

Previous to CLEAR, insurers relied on the MSRP and some basic information about a vehicle’s repairs costs when determining premiums. As a result, vehicles with similar MSRPs would usually result in similar insurance premiums. For the most part, the greater a vehicle’s MSRP, the higher the premium charged. For many years, that seemed to make sense, but this system failed to acknowledge a number of claims cost factors including:

  • Some vehicles depreciate more rapidly than others
  • The cost of replacement parts can vary considerably between brands and models
  • Certain cars are much more attractive to thieves due to easily defeated security systems or a strong demand for used parts
  • Sophisticated safety devices that increase a vehicle’s cost, may reduce claims frequency and severity of injuries
  • Some vehicles have a higher likelihood of specific types of claims. For example, the top heavy nature of many SUVs make them more prone to rollovers

The CLEAR system rewards you with lower insurance costs if you buy a vehicle that is safer to drive and less likely to be stolen. To determine what vehicles give you the best rates, the CLEAR chart is available here:

Another good way to determine your best vehicle choice is a call to your insurance provider after you’ve narrowed it down to a few models. They can easily provide you with a cost comparison.

If you want to learn more about auto insurance and other ways you can reduce your costs, please visit


  1. As a licensed insurance agent in Ontario. I find that too many people assume cars will be cheaper on car insurance because they are newer. I’ve even had clients loose it on me as if I was playing some game with their insurance rates.

    I always tell my clients to email me with a list of vehicles they are looking at. It takes very little time for me to give them a quote on the vehicle their looking at.

  2. Thanks BD Williams,

    I completely agree with your advice. It always pays to get quotes for different vehicles before you buy.


  3. Susan Anderson Behn

    For those in jurisdictions with Provincial Car Insurance, remember you can walk into any agent for Provincial car insurance and get a quote for a years insurance printed out for you.
    Remember to take with you the details of the car( or cars) you are considering that includes the year, make and model and its easier for the Agent if you have the VIN for each vehicle under consideration.