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The type of car you choose can have a big impact on your premiums. Choosing some old clunker might save you money in the short-term, but if your car lacks essential safety features, then you might end up forking out more on premiums than you would for a more dependable vehicle.
To find a cheaper premium, there’s a few things to consider before you even buy a car. Selecting a car with the following features might result in a cheaper insurance premium:1
Generally speaking, a cheaper car that doesn't cost much to replace will also attract a lower premium.3 Insurers don’t like taking big risks, and they’re likely to offer cheaper premiums if they know that repair parts are cheaper, damage is minimised, and the driver is conscientious. The more of these features you can find in a car, the better your chances are at finding a good deal on Car Insurance.
Can the colour of your car affect your premium? Well, it really depends on your insurer.4 There are definitely some out there that don’t really care (so long as you don’t have a custom paint job!), but it’s worth speaking to your insurer beforehand to see whether it’s something they assess.
Drivers in Australia require some form of Car Insurance. Case in point: Compulsory Third Party (CTP) insurance is mandatory in all states and territories,5 and uninsured drivers could face heavy fines.6
Keep in mind that CTP insurance only covers injury to people and death caused by a car accident.7 It does not cover property damage, including repairs to either your own car or someone else's.
Unless you live in NSW, CTP will also be included in your registration.8 Some states offer you a choice of CTP insurance while others don’t.
For example, in NSW CTP insurance is called a green slip and you need to buy this separately before you register your car.9 Whereas in Victoria, CTP insurance is administered by the Transport Accident Commission (TAC) and is referred to as the TAC charge.10 Either way, you should always check your registration paperwork to make sure CTP is included.
But what if you want to go a bit further than CTP? If you want a policy that covers some of the other expenses that come with an accident, you can choose from comprehensive, third party property or third party property, fire and theft insurance.11
Keep in mind that these policies will be more expensive than CTP, but they’ll also cover you for more!
However, insurers can charge drivers a different amount for the same policy, depending on a number of risk factors.12
The type of things insurers will ask you - and factor into the price of your premiums - can include:
Your answers will help determine which level of cover you are eligible for and how much it will cost.13
There can be a big difference between the price of different policies and a lot of this can come down to what optional extras or features are included. If you’re looking for cheaper Car Insurance, you may want to consider if you can do without any of the below optional extras:
So, you’ve bought a car, and you know what you want in a policy, and what you can live without. Great! Now let’s touch on some of the things you can do to get the best deal possible.
It’s essential to choose a Car Insurance policy that suits your car and your circumstances. If you own a cheap car that you can easily replace, you could decide to save by purchasing third party property insurance, rather than the generally more expensive comprehensive insurance. But if you can’t live without your car - or afford to stump up for repairs - then comprehensive cover could be well worth the extra cash.19
One-size-fits-all insurance policies are a thing of the past, and providers can differ greatly in their offerings, and their prices! Once you decide on a policy or level of cover, shop around to find a competitive price. Our comparison service* can give you up-to-date prices on policies from our range of providers in just a few minutes.
Certain insurers will offer a discount if you purchase their policy online. While this might just be a discount for the first year of your policy, it could still end up saving you a bit of cash!20 So be sure to check whether this is an option for your chosen policy and provider.
If you can afford to pay your premiums upfront annually in one lump sum, you’ll usually receive the lowest price on your policy. However, if an annual insurance bill risks breaking your budget, then it might be a good idea to pay your premiums in monthly instalments instead.
Insurance needs change over time so be sure to regularly review your policy come renewal time. Don’t simply auto-renew without seeing how your current policy stacks up against other options. Instead, consider your renewal notice a prompt to shop around. Changing providers or choosing different policy features may be an easy way to reduce your premium.
How do insurers reward their loyal customers? Some will offer discounts if you hold more than one type of insurance or multiple policies with them.21
If you don’t drive very often, you may find a better deal through a provider that bases premiums on kilometres driven.22
Insurers usually offer lower premiums if you keep your car secure whenever possible. Parking your car in a locked garage and installing car alarms or immobilisers may also help reduce your premium.23
Consider whether accepting a market value payout will work for you in the event your car is written off. While opting for an agreed value payout could provide more certainty in the event your car is written off, it may increase your premium.24
Comparing policy prices and features can be time consuming. But set-and-forgetting can result in paying more than you need. Let us take the hassle out of shopping for Car Insurance. iSelect can help you compare* available policies from our range of insurers. Call us today on 13 19 20 to compare Car Insurance policies!
1 Budget Direct - How Much Does Car Insurance Cost?
2 iCare - Purchase Safer Vehicles Fact Sheet (Page 1)
3 Budget Direct - How Much Does Car Insurance Cost?
4 pd.com.au - 5 Car Insurance Myths You Should Stop Believing
5 Motor Accident Insurance Commission (MAIC) - Discussion Paper | 2023 Review of Queensland’s Compulsory Third Party (CTP) insurance scheme (Page 11)
6 NSW Government | State Insurance Regulatory Authority - Failure to take out insurance
7 Moneysmart - Choosing Car Insurance
8 As above.
9 As above.
10 VicRoads - What does my rego pay for?
11 Moneysmart - Choosing Car Insurance
12 As above.
13 As above.
14 pd.com.au - Comprehensive Car Insurance
15 Virgin Money - Virgin Car Insurance Price Promise | Product Disclosure Statement (Page 8)
16 As above (Page 8).
17 Moneysmart - Choosing Car Insurance
18 Everyday Insurance From Woolworths - Drive Less Pay Less Insurance
19 Moneysmart - Choosing Car Insurance
20 Budget Direct - Car Insurance
21 Moneysmart - Choosing Car Insurance
22 Everyday Insurance From Woolworths - Drive Less Pay Less Insurance
23 Budget Direct - How Much Does Car Insurance Cost?
24 Moneysmart - Choosing Car Insurance