How to Get Cheaper Car Insurance

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Updated 14/09/2023
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Updated with new sources and included information on whether car colour can impact premiums.
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Written by

Francis Taylor

Updated 14/09/2023

What changed?

Updated with new sources and included information on whether car colour can impact premiums.
Our aim is to help you make better informed decisions. That’s why iSelect’s content is produced in accordance with our fact-checking and editorial guidelines.

Edited by

Laura Crowden

Find out more about how we make money.

View our Privacy Policy.

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Choosing the right car
Finding the right level of cover
Tips to help save money on your Car Insurance
Choose the right level of cover
Shop around for a better deal
Online discount
Payment frequency
Review your insurance frequently
Package your insurance policies
Only drive when necessary
Keep your car secure
Market value versus agreed value
Compare Car Insurance policies to see if you can find a better deal

Choosing the right car

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:1Budget Direct – How Much Does Car Insurance Cost?  

Generally speaking, a cheaper car that doesn’t cost much to replace will also attract a lower premium.3Budget Direct – How Much Does Car Insurance Cost?  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.

Helpful Tip:

Can the colour of your car affect your premium? Well, it really depends on your insurer.4pd.com.au – 5 Car Insurance Myths You Should Stop Believing 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.

Finding the right level of cover

Drivers in Australia require some form of Car Insurance. Case in point: Compulsory Third Party (CTP) insurance is mandatory in all states and territories,5Motor Accident Insurance Commission (MAIC) – Discussion Paper | 2023 Review of Queensland’s Compulsory Third Party (CTP) insurance scheme (Page 11)  and uninsured drivers could face heavy fines.6NSW Government | State Insurance Regulatory Authority – Failure to take out insurance

Keep in mind that CTP insurance only covers injury to people and death caused by a car accident.7Moneysmart – Choosing Car Insurance 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.8As above.  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.9As above. Whereas in Victoria, CTP insurance is administered by the Transport Accident Commission (TAC) and is referred to as the TAC charge.10VicRoads – What does my rego pay for? Either way, you should always check your registration paperwork to make sure CTP is included. 

What impacts the price of your premiums?

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 comprehensivethird party property or third party property, fire and theft insurance.11Moneysmart – Choosing Car Insurance 

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.12As above.     

The type of things insurers will ask you – and factor into the price of your premiums – can include: 

  • How often do you drive? 
  • Will anyone else drive your car? 
  • Is your car for business or private use? 
  • Is your car modified or performance enhanced? 
  • Are you an older/younger driver? 
  • Do you need additional extras? (i.e. a rental car) 
  • What basic excess are you comfortable with? 
  • Are you interested in roadside assistance? 
  • Would you prefer to choose your own repairer? 
  • Do you have a history of chipped or broken windscreens? 

Your answers will help determine which level of cover you are eligible for and how much it will cost.13As above.  

Extra features can cost you extra!

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:   

  • Younger drivers: If other people drive your car on the regular, then you might need to list them on your policy so that they’ll be covered for accidents too. This may depend on your insurer, but in many cases, they’ll require you to nominate these additional drivers. If your nominated drivers are younger and less experienced (i.e. under 25) this could impact your premiums. 
  • Roadside assistance: This could be offered as an optional extra on your Car Insurance.14pd.com.au – Comprehensive Car Insurance  Basically, you can call to get help with flat tyres, engine troubles or full-on breakdowns. Pretty handy! 
  • 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 ).15Virgin Money – Virgin Car Insurance Price Promise | Product Disclosure Statement (Page 8) 
  • Temporary Accommodation: Certain insurers will also cover the cost of your temporary accommodation if your car is damaged and they can’t get you back home.16As above (Page 8). This can be included as part of your Comprehensive Car Insurance, or it might be offered as an optional extra. 
  • Level of excess: An excess is how much you’ll need to pay out-of-pocket when you make a claim.17Moneysmart – Choosing Car Insurance  The more you’re willing to pay as an excess, the lower your premiums will generally be.
  • Windscreen cover: Most insurers will include some form of windscreen cover within their standard comprehensive policy. Many have an additional layer of windscreen protection as an optional extra. In some cases, this comes in the form of  low-excess (or no excess!) cover for damaged windscreens.18Everyday Insurance From Woolworths – Drive Less Pay Less Insurance 

Tips to help save money on your Car Insurance

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.

Choose the right level of cover

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.19Moneysmart – Choosing Car Insurance   

Shop around for a better deal

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. 

Online discount

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!20Budget Direct – Car Insurance  So be sure to check whether this is an option for your chosen policy and provider. 

Payment frequency

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. 

Review your insurance frequently

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. 

Package your insurance policies

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.21Moneysmart – Choosing Car Insurance  

Only drive when necessary

If you don’t drive very often, you may find a better deal through a provider that bases premiums on kilometres driven.22Everyday Insurance From Woolworths – Drive Less Pay Less Insurance  

Keep your car secure

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.23Budget Direct – How Much Does Car Insurance Cost? 

Market value versus agreed value

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.24Moneysmart – Choosing Car Insurance  

Compare Car Insurance policies to see if you can find a better deal

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!

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