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Written by
Tina Sendin
Edited by
Laura Crowden
Reviewed by
Adrian BennettWe compare many well-known car insurers
iSelect does not compare all providers in the market or all policies offered by our partners in your area. Not all policies or special offers are available to all customers. Learn more.
What is short-term car insurance?
Sometimes you don’t need car insurance for an entire year – maybe it’s just for a quick road trip, a visiting mate borrowing your car, or revving up an old, dusty vehicle.
Enter short-term car insurance – or the idea of it.
While not typically offered as a standalone product, short-term car insurance refers to the way standard car insurance policies can provide coverage for a limited period, typically ranging from a few days to a few weeks.
When might I need temporary car insurance?
There are plenty of scenarios where drivers might need coverage for just a short time. Here are a few examples of ways short-term car insurance could come in handy:
Using a rental car
If you’re using a short-term rental traveling or camping around the country, sometimes extra protection on your hire car is worth the peace of mind.
Borrowing a car
If you’re using your mate’s car for a weekend surf trip, you might need to ensure you’re covered while driving.
Selling a car soon
Only need insurance for a few weeks while you’re waiting for the paperwork? Short-term cover could save you a bit of dosh.
Temporary use of a second car
Perhaps you’re pulling the old runabout out of the garage and need insurance for a couple of months.
International driver coverage
If you’re visiting from overseas and feeling uneasy about those Melbourne hook turns, this coverage might suit you.
Test-driving a car you might buy
Thinking of treating yourself to a new set of wheels? Short-term cover can protect you while test-driving potential purchases.
How can I get short-term car insurance?
Even though you can’t just take out a specific short-term policy in Australia, there are a few workarounds to get temporary car insurance when needed. Here are a few options to consider:
Purchase a regular policy, then cancel it
One of the simplest methods is to buy a standard comprehensive or third-party policy, pay it monthly, and cancel it once no longer needed. Many insurers will provide a pro rata refund for unused portions of the policy, though cancellation fees might apply.
Pro: There are heaps of policies available and you can choose the level of coverage that tickles your fancy.
Con: Cancellation fees might apply.
Explore pay-as-you-go or usage-based insurance
Some insurers offer usage-based car insurance, which might be ideal for temporary needs. Pay as you drive policies calculate premiums based on how much or how often you drive. These can be ideal if you only drive every now and then, and don’t want to fork out for a full premium.
Pro: You don’t have to shell out a big sum of money for a car you don’t get to use that much.
Con: It’s essential to have a crystal-clear idea of how much you’ll be driving your car. Exceeding your agreed kilometres could mean extra excess fees on a claim or a higher premium when it’s time to renew.
Add temporary drivers to an existing policy
Some insurers allow you to add an additional driver to your policy regardless of the level of coverage you have with them. So if you’re borrowing aunty Shaz’ car, it’s a good idea to check if she can temporarily add you as a listed driver on her policy. Just note that this might increase her premiums slightly or add an excess if you’re considered a younger driver.
Pro: You won’t have to do anything but ask Aunty Shaz to add you in her policy.
Con: You can’t get on Aunty Shaz’ bad side and you’ll owe her a nice dinner as she’s doing you a solid, paying for a higher premium (and an added excess if you’re a Gen Z).
Purchase a regular policy, then cancel it
One of the simplest methods is to buy a standard comprehensive or third-party policy, pay it monthly, and cancel it once no longer needed. Many insurers will provide a pro rata refund for unused portions of the policy, though cancellation fees might apply.
Pro: There are heaps of policies available and you can choose the level of coverage that tickles your fancy.
Con: Cancellation fees might apply.
Explore pay-as-you-go or usage-based insurance
Some insurers offer usage-based car insurance, which might be ideal for temporary needs. Pay as you drive policies calculate premiums based on how much or how often you drive. These can be ideal if you only drive every now and then, and don’t want to fork out for a full premium.
Pro: You don’t have to shell out a big sum of money for a car you don’t get to use that much.
Con: It’s essential to have a crystal-clear idea of how much you’ll be driving your car. Exceeding your agreed kilometres could mean extra excess fees on a claim or a higher premium when it’s time to renew.
Add temporary drivers to an existing policy
Some insurers allow you to add an additional driver to your policy regardless of the level of coverage you have with them. So if you’re borrowing aunty Shaz’ car, it’s a good idea to check if she can temporarily add you as a listed driver on her policy. Just note that this might increase her premiums slightly or add an excess if you’re considered a younger driver.
Pro: You won’t have to do anything but ask Aunty Shaz to add you in her policy.
Con: You can’t get on Aunty Shaz’ bad side and you’ll owe her a nice dinner as she’s doing you a solid, paying for a higher premium (and an added excess if you’re a Gen Z).
Why should I buy with iSelect?
Nearly two million car insurance comparisons and counting!
Since 2018, we’ve helped almost two million Aussies suss out their car insurance online. Yep, we’ve been pretty busy making it easier for you to choose a policy.
We offer price confidence
We’re confident that you’ll get the same price with iSelect as going direct. So, if you buy comprehensive car insurance with us and find the identical policy cheaper within 30 days from the same insurer, we’ll give you a $100 eGift card. T&Cs apply.
Same price, no sneaky mark-ups
Instead of charging you a fee, our partners pay us a commission. Our quotes come direct from the insurer – no mark-ups, just great deals.
*Excluding corporate discounts and exclusive offers. (Of course there’s no free lunch. If you’re curious how we make money, let us explain.)
Quick and easy online comparisons
Hitting the road (again) is only a few clicks away. You can compare car insurance policies in around five minutes – probably quicker than getting through Sydney Harbour Bridge traffic at peak hour!
FOUND THE SAME POLICY CHEAPER?
WE’LL GIVE YOU A $100 E-GIFT CARD
When it comes to comprehensive car insurance, we’re confident that you’ll get the same price through iSelect as going direct to the insurer.
So, if within 30 days after buying with us, you find the identical policy (commencing within two days of the quote) with a lower annual premium from the same insurer, we’ll give you a $100 e-gift card.*
What are possible pitfalls that I should watch out for with short-term car insurance?
Going the short-term route can be handy, but there are some challenges to watch out for before committing.
Cancellation fees
Some providers charge cancellation fees when you pull the pin on your policy a tad too early outside the ‘cooling off’ period.1For more information, see Consumer Affairs Victoria – New car cooling-off period
Gaps in coverage
Even a one-day lapse in coverage could land you in hot water with the law, if not get your claim rejected.
Slim pickings
Not all insurers offer options suitable for short-term needs, so you might have to shop around.
Overpaying
Short-term solutions can sometimes cost more. If you only need a week of coverage, paying for a full monthly premium might seem steep.
What are the types of car insurance available for short-term needs?
Here’s a quick breakdown of common car insurance types and how they can work for short-term scenarios
Compulsory third-party insurance
If you want to legally drive on Aussie roads, you’ll need this non-negotiable. CTP insurance (aka Green Slip in NSW or MAI in Queensland) covers you if someone is injured in an accident, but doesn’t cover any damage to property or your car.
Third-party property insurance
This can cover damage you cause to other people’s property. Third-party property insurance is more affordable but doesn’t cover your car.
Third-party fire and theft
This adds coverage for fire damage and theft to the basic third-party property insurance. It’s a step up but still lighter than comprehensive insurance.
Comprehensive car insurance
This comprehensive level of protection covers your car in case of accidents, theft, or damage, as well as damage to other vehicles and property. Top-notch cover, but it’s also more expensive than the two.
Rental car insurance
Some rental car companies can also offer temporary coverage for drivers using rental vehicles. Some even allow cancellation anytime up until vehicle collection.
Helpful tip:
Consider your coverage needs carefully. Taking out a policy for the short-term can be great for borrowing or lending a car, quick trips, or temporary use, but does your policy include the right level of coverage? For instance, does it protect you from accidental damage or theft?
Comprehensive car insurance might be more expensive than other levels of cover, but if peace of mind is on top of your hierarchy of needs, this might be your go-to.
Adrian Bennett
General Manager for General Insurance
How to buy with iSelect
Spill the beans
Tell us a bit about your car, who’s driving it, and what kind of cover you’re after. We’ll get cracking on finding options for you.
Check out your options
We’ll lay it all out for you – policies side by side with their monthly costs, what’s included (and not), plus any extras you might want to add.
Pick your winner
If a policy piques your interest, go for it – you’re a few clicks away from getting a brand spanking new car insurance.
Break up with your old policy
One last thing: Tell your old insurer that it’s time to part ways. Then you’re all set!
What are some of the factors affecting short-term car insurance costs?
Your premium will depend on various factors, even when insuring short-term. Here’s what can impact your costs:
- Your policy: The type of policy you choose sets the tone for what you’ll pay.
- The driver/s: Your experience (or lack of it) as a driver can make a difference.
- The vehicle: Make, model, and even the age of your car all come into play.
- Where you keep the vehicle: Where you’ll stay and where your car is parked at night counts too.
- How you use your ride: Whether it’s for daily commutes or weekend getaways, it all matters.
- Your excess amount: Picked a low excess? Your premium might be higher. Opt for a higher one? You could save on costs.
How can I choose short-term car insurance?
Here’s how to play it smart when choosing the best short-term option:
- Compare providers: You can use comparison tools like iSelect to explore policy options side by side, saving you hours of research.
- Think flexibly: It could be a good idea to explore usage-based insurance plans if you only need limited coverage.
- Avoid gaps: Ensuring active, continuous coverage before hitting the road is a pro move.
- Understand policy details: Product disclosure statements (PDS) can be your best mate here. It contains details on cancellation fees, refund policies, and excess amounts.
- Be honest about duration: Accurately estimating how long you’ll need coverage can help you avoid getting stung with unnecessary costs or complications down the line.
Compare short-term car insurance today
Short-term car insurance doesn’t have to be confusing. Whether you’re borrowing a mate’s car or need a temporary solution while selling yours, know that you’ve got options that can help save you money and steer clear of stress.
Get started today by exploring your options with Select.
Get started on comparing car insurance policies!
Save time and effort by comparing a range of car insurance quotes with iSelect
iSelect General Pty Ltd (ABN 90 131 798 126. AFSL 334115) has partnered with Compare the Market (ABN 83 117 323 378. AFSL 422926) to compare a range of car insurers and policies. Not all providers in the market or all policies offered by the partners are compared and not all policies or special offers are available to all customers.
A number of our participating general insurance brands are arranged by Auto & General Services Pty Ltd ACN 003 617 909 on behalf of Auto & General Insurance Company Limited 111 586 353, both of which are related entities of iSelect Limited. Our relationship with those companies does not impact the integrity of our comparison service. Click here to view iSelect’s range of providers.
Any advice provided by iSelect is of a general nature and does not take into account your objectives, financial situation or needs. You need to consider the appropriateness of any information or general advice iSelect gives you, having regard to your personal situation, before acting on iSelect’s advice or purchasing any policy. You should consider iSelect’s Financial Services Guide which provides information about our services and your rights as a client of iSelect. iSelect receives commission for each policy sold that is a percentage of the premium or a flat fee. Ask us for more details before we provide you with any services.