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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 the best premium for you, there’re a few things to consider before you even buy a car. Selecting a car with the following features can bring you a lower premium:

  • 5-star safety rating
  • Low fuel consumption
  • Low statistical theft history
  • Marketed as a family car
  • Initially sold in Australia by the manufacturer rather than imported (eg grey import)
  • Newer rather than older
  • Petrol rather than diesel
  • Lower horsepower
  • Standard inclusions (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 CTP insurance1, and uninsured drivers 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.

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 will ultimately impact the price you pay. Some will reduce your premium, while others can increase it:

  • Drivers under 26 years old
  • Nominated driver
  • Roadside assistance
  • Rental car
  • Temporary Accommodation
  • Market value vs agreed value
  • Level of excess
  • Windscreen cover

To choose an appropriate level of cover for your circumstances, ask these keys questions:

  • How often do you drive?
  • Will anyone else drive your car regularly?
  • Is your car for business or private use?
  • Is your car eco-friendly?
  • Is your car modified or performance enhanced?
  • Are you an older driver?
  • Are you under 26 years old?
  • Do you need additional extras? (e.g., a rental car)
  • How much excess could you reasonably afford?
  • How much is roadside assistance as a standalone product? (e.g., through RACQ/RACV)
  • 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 need and who can provide an affordable policy that meets your needs.

How to save money on your car insurance

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

Reduce car insurance Australia

Choose the right cover

It’s essential to choose a car insurance policy that suits your car and your individual needs. If you own a cheap car that you can easily replace, you can save by purchasing only third party property insurance3, rather than the 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 the right policy for you, shop around to find a competitive price. Our comparison service can give you up-to-date prices on comparable 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

How often you pay your premium not only affects the total cost, but also your personal budget. 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 can 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 can often lower your premiums.

Only drive when necessary

If you drive less than the 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 should help reduce your premium.

Don’t claim unnecessarily

Each time you claim on your car insurance, you potentially increase your premium. Before going through your insurance for small repairs, consider whether you could cover the cost yourself to save money in the long run.

Market value versus agreed value

Consider whether accepting a current market value payout will work for you in the event your car is written off. Opting for an agreed value payout instead may increase your future premiums4.

How to compare car insurance policies to find a better deal

The sheer number of car insurance providers and policies in the market can be overwhelming. When comparing policies, it’s not just about price.

iSelect gives you a detailed look at policy features, along with price, so you can compare like with like. That way, you can make sure you’re getting the right deal for your individual needs.

Call us today on 13 19 20 to compare car insurance policies today!

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/