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Tips for finding cheaper car insurance

How do I choose a car that’s cheaper to insure?

How do I choose cheaper car insurance without sacrificing cover?

What impacts how cheap car insurance premiums can be?

Which policy features make car insurance expensive?

How do I compare car insurance quotes to get a cheaper deal?

Long story short

Getting cheaper car insurance comes down to lowering your risk and shopping around

Insurers price premiums based on risk, so safer driving, secure parking and comparing policies can help lower costs.

Your car, driving habits and type of car insurance all impact what you pay

Lower‑value cars, getting a low-kilometre policy and choosing only the cover you need can help cut down on costs.

Reviewing and comparing policies regularly can help you find better deals

Opting for a higher excess or paying your premium annually instead of in instalments can help keep insurance costs down.

Tips for finding cheaper car insurance

Getting cheaper car insurance involves lowering your risk to an insurer while also ensuring that you’re constantly looking for a better deal. There can be several ways to potentially lower your premium, including driving a low-risk car, choosing to pay a higher excess and paying your premiums annually instead of monthly. Also, consider reviewing your cover options regularly, looking out for discounts and, of course, comparing a range of policies before you buy a new policy or renew your existing car insurance cover.

How do I choose a car that’s cheaper to insure?

A car that’s cheaper to repair or replace is less of a risk to an insurance provider than a higher-priced car that’s likely to have higher repair or replacement costs if damaged or stolen. Cars with better safety ratings and security features can also attract lower premiums as they’re generally considered a lower risk to insure.

For example, insuring a brand-new car can be more expensive than insuring a slightly used one – this has a lot to do with the insured vehicle’s market value and car depreciation rates.

So, if you want to score cheaper car insurance, having a car with the following characteristics or features might help:

• lower market value
• security features (e.g. alarms, immobilisers)
• high safety rating
• no modifications
• not regarded as ‘high-performance’.

The more of these features you can find in a car, the better your chances are of finding a good deal on car insurance. Remember, insurers assess a range of factors when determining premiums, including the likelihood and potential cost of a claim. So, you’re more likely to pay a lower premium if the cost of repairing the car is lower and that measures have been taken to reduce the chances of a total loss.

Helpful tip

If you modify your car, you must let your insurer know because it can change how your policy covers you – from your risk profile to your premium. Not disclosing car modifications such as getting your engine tuned or adding aftermarket exhausts, alloy wheels or body kits can lead to denied claims or, worse, an insurer cancelling or voiding your policy.

Adrian Bennett

General Manager for General Insurance

How do I choose cheaper car insurance without sacrificing cover?

You can choose from comprehensive, third-party property and third-party property fire and theft policy types, considering the level of cover each of them offers and their costs. Also factor in how much you drive, how much excess you can pay, your driving experience and who else drives your car, and any optional cover you want – all of which affect the premium you’ll be charged for a policy.

It helps to think about how you can balance your insurance needs with your budget. Third-party car insurance can be a cheaper option, but only a comprehensive policy can cover your own car for damage, whether that’s due to a weather event, an accident that was your fault or even vandalism. For example, if you own a cheap car that you can easily replace, but you’re more concerned about paying for accidental damage to other people’s property, you could save by getting a basic third-party policy. But if you depend on your car or can’t afford unexpected accident repairs, then comprehensive cover could be worth the higher premium.

To be sure that you’re choosing wisely, it’s worth reading the policy’s Product Disclosure Statement and weighing up which features suit your needs while also keeping an eye out for exclusions and what’s not covered.

What impacts how cheap car insurance premiums can be?

Insurance companies calculate your car insurance premiums based on your risk level. The higher your risk, the higher the premium you’re likely to pay. Factors such as your age, your driving and claims history, your car and how you use it and how much excess you pay can contribute to your risk level.

So even if you go for a cheaper policy that only covers third-party property damage, you might end up paying more for it than someone else with a lower risk level would. Insurers can charge drivers different amounts for the same policy, depending on a number of risk factors.

An insurer can consider the following factors to calculate your car insurance premium:

• Your age: Young drivers tend to pay more for car insurance due to their statistically higher risk of crashing.
• Your car: A car with a lower market value and repair cost presents a lower risk to an insurer.
• Where you live: An area with low car theft rates or frequency of accidents can attract lower premiums.
• How you garage your car: A lock-up garage provides more safety from car theft and weather damage.
• Your level of cover: Third-party policies may be cheaper, but don’t cover as much as a comprehensive policy.
• Your excess: Choosing to pay a higher excess reduces some of the risk taken on by the insurer.
• Optional extras: Limiting your optional extras to only what you need can help keep car insurance costs low.
• How often you drive: A pay as you drive policy can be cheaper if you drive within a limit over the policy term.
• Who drives your car: Restricting high-risk drivers from using your car can help lower your premium.
• How you use your car: If you use your car for business or rideshare, expect to pay a higher premium.
• Car modifications: Keeping the mods to a minimum (or at zero) can also help keep your risk level low.

While you can’t do much about some of your risk factors, it can help to drive more carefully, so your chances of getting into a bingle and needing to make a car insurance claim are lower. Even using your car only when you need to and adding driver age restrictions to your car insurance policy can help you secure a lower premium.

Which policy features make car insurance expensive?

Features such as agreed value cover, new car replacement, towing and personal effects cover, which are common standard inclusions on comprehensive car insurance policies, can make car insurance more expensive. Optional extras or add-ons, such as choice of repairer, windscreen excess and accident hire car, when added to a policy, can also contribute to higher car insurance costs.

While some of these features may not fit into someone’s driving habits or lifestyle, they can be quite beneficial to others and sometimes a no-brainer to have.

So, knowing what a policy feature entails and whether you really need it can make all the difference when you’re trying to find the cheapest policy for you and your car. If you’re trying to find a balance between coverage and cost, consider whether you could do without these features:

• Young drivers: Listing younger drivers (under 25s) on your policy can not only raise your premium but can also result in you paying an additional excess if said younger driver causes an accident while driving your car.
• Rental car: Having access to a hire car to help you get around while your car is being repaired can be super handy, but it could also cost you extra. Some insurers will offer a hire car as standard, while for others it is an optional extra. Keep in mind that whether or not it’s an additional cost may depend on whether or not you were at fault in the accident.
• Emergency accommodation and travel costs: Some insurers may provide cover for the cost of your temporary accommodation or emergency travel expenses if your car is damaged and you’re unable to continue your journey home. This can be included as part of your comprehensive car insurance, or it might be offered as an optional extra.
• Windscreen cover: Insurers can include some form of windscreen cover within their standard comprehensive policy or offer it as an optional extra. This cover can come in the form of low-excess (or no excess!) cover for damaged window glass or windscreens.
• Roadside assistance: Some policies include roadside assistance as a standard feature or as an add-on option at an extra cost. Either way, it’s likely to bump your premium (but it can be pretty useful to have in case of a flat tyres, engine troubles or full-on breakdowns).

How do I compare car insurance quotes to get a cheaper deal?

A great way to compare car insurance quotes is to use an online comparison service. You can use the iSelect comparison tool to find and compare policies from a range of well-known car insurance brands in Australia. It saves you the time and effort you’d otherwise put into calling into each provider or checking their websites one by one by doing it for you in minutes.