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How To Reduce Your Car Insurance

In this article you’ll discover our top tips for reducing your car insurance premiums, and for finding a policy that doesn’t break the bank.
How to reduce your car insurance

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Choosing the right car

Car insurance premiums are based on a variety of factors, including the type of car. To find a competitive premium, there’s a few things to consider before you even buy a car. Selecting a car with the following features could result in a lower insurance premium:

  • 5-star safety rating
  • Low statistical theft history
  • Initially sold in Australia by the manufacturer rather than imported (i.e. grey import)
  • Newer rather than older
  • Lower horsepower
  • No modifications

Generally, the newer, safer and more common your car is, the cheaper your insurance premium could be. Insurers are likely to offer a cheaper premium when they know that parts are cheap, 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.

Finding the right level of cover

Car insurance requirements can differ from state to state in Australia. Most car owners in Australia are required to have some form of Compulsory Third Party (CTP) insurance1, and uninsured drivers could face heavy fines2. CTP insurance only covers injury to people and death. It does not cover property damage.

In all Australian states and territories, except NSW, CTP insurance is covered in your registration. Some states still offer you a choice of insurer, and you should always check your registration paperwork to make sure CTP is included. In NSW, CTP insurance is called a green slip and you need to buy this separately before you register your car. In Victoria, CTP insurance is administered by the Transport Accident Commission (TAC) and is referred to as the TAC charge.

If you decide to protect yourself against the cost of repairs in the case of an accident, you can choose from comprehensive, third party property or third party property, fire and theft insurance.

Your policy may include a myriad of extras and features, which could ultimately impact the price you pay. Some will reduce your premium, while others can increase it:

  • Nominated driver
  • Roadside assistance
  • Rental car
  • Temporary Accommodation
  • Market value vs agreed value
  • Level of excess
  • Windscreen cover

To be quoted for a level of cover, there are some key questions some insurers will may you: :

  • 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 who can provide an affordable policy with the cover you’re after.

How to save money on your car insurance

Once you’ve bought a car and know what you want in a policy, there are many ways to ensure you find an ideal policy at a good price.

Reduce car insurance Australia

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 insurance3, rather than the generally more expensive comprehensive insurance.

Shop around for a better deal

One-size-fits-all insurance policies are a thing of the past, and providers differ greatly in their offerings. 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

Some insurers offer a discount when policies are purchased online. Be sure to check whether this is an option for your chosen policy and provider.

Payment frequency

If you can afford to pay annually, you’ll usually receive the lowest price on your policy. However, if an annual insurance bill will break the bank, it may still be beneficial to pay by the month.

Review your insurance frequently

Insurance needs change over time so be sure to regularly review your policy. Changing providers or choosing different policy features may be an easy way to reduce your premium.

Package your insurance policies

Insurers can sometimes reward loyal customers4. Taking out more than one type of insurance with the same provider may lower your premiums in some cases.

Only drive when necessary

If you drive less than an average person, you may find a better deal through a provider that bases premiums on kilometres driven4.

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 help reduce your premium.

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 premiums4.

Compare car insurance policies to see if you can find a better deal

Comparing policy prices and features can be time consuming. 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. www.moneysmart.gov.au/tools-and-resources/publications/factsheet-buying-a-car/
2. https://www.sa.gov.au/topics/driving-and-transport/vehicles-and-registration/vehicle-insurance/
4. https://www.moneysmart.gov.au/insurance/car-insurance/

Last Updated: 1/07/2020