Car Insurance for Your First Car

What kind of insurance should first-car drivers get?

There are four different types of car insurance and they all offer different levels of protection.

• Compulsory third party (CTP). Compulsory third party insurance is a legal requirement and covers liability charges in the event you are involved in an accident. This cover ensures that the driver at fault will always have an insurance policy that can pay for any injuries caused.
• Third party property (TPP). This is not mandatory, but it's cheap and extremely important. Third party property covers the cost of property damage you might cause while driving. If you rear end a Mercedes Benz or crash into the wall of someone's house, you will most likely be liable for all the costs, even if it wasn't strictly your fault. Even the cheapest TPP car insurance usually covers at least $20 million worth of property damage.
• Third party property with fire and theft. This policy gives you all the benefits of TPP insurance, along with fire and theft insurance for your car. Fire and theft are two of the most common causes of total car loss, so it's a good idea to get the protection.
• Comprehensive. This is the highest level of car insurance cover there is. Comprehensive vehicle insurance includes all the benefits of TPP insurance, as well as protection against fire and theft. What makes it different is that, unlike the other types of car insurance, it also provides a lot of protection for your car, including the cost of storm damage, flooding, hail, vandalism and much more. Depending on the insurer, you can also find a wide range of extras with comprehensive insurance like cover for lost or stolen keys.

What does insurance cost for young drivers?

The cost of car insurance differs between all individuals, including first car drivers. Your gender, the type of car you drive, how long you have been driving, where the car is parked and the amount of cover you choose are some of the things that can affect the cost of your insurance. To give you an idea of how much you might pay though, we calculated costs based on an 18 year old males female.

• 18 Year Old Female
• 18 Year Old Male

Monthly cost for an 18 year old female

Company	Third Party Property	Comprehensive	Apply
Budget Direct	$68.76	$190.20	Get quote
Bingle	$67.27	$132.20	More info
NRMA	$78.36	$208.16	More info
AAMI	$79.18	$171.63	More info
Coles	$47.09	$173.14	More info
Virgin Money	$76.40	$205.79	More info
GIO	$80.35	$229.73	More info
Suncorp	$121.40	$279.29	More info
QBE	$73.86	$356.48	Get quote

_{Quotes obtained September 2021}

How did we get these costs?

• Female driver born 1/1/2003
• Silver 2018 Toyota Corolla Hatchback Hybrid 5dr Auto
• Licence acquired in 2020
• Safe driver with no claims made in the past 2 years

• Drives 10,000-15,000 km per year
• Adjusted excess to $850 where possible
• Driver located in Sydney more info button
• Policy starting September 2021

Monthly cost for an 18 year old male

Company	Third Party Property	Comprehensive	Apply
Budget Direct	$70.41	$184.38	Get quote
Bingle	$85.08	$161.66	More info
NRMA	$88.68	$238.10	More info
AAMI	$102.69	$184.72	More info
Coles	$53.82	$205.77	More info
Virgin Money	$78.26	$200.10	More info
GIO	$103.52	$251.71	More info
Suncorp	$158.67	$306.34	More info
QBE	$95.62	$414.94	Get quote

_{Quotes obtained September 2021}

How did we get these costs?

• Male driver born 1/1/2003
• Silver 2018 Toyota Corolla Hatchback Hybrid 5dr Auto
• Licence acquired in 2020
• Safe driver with no claims made in the past 2 years

• Drives 10,000-15,000 km per year
• Adjusted excess to $850 where possible
• Driver located in Sydney more info button
• Policy starting September 2021

Best insurance if you've got a brand new car

Unfortunately, there's no one size fits all when it comes to finding the best car insurance. But, if you have a brand new car, there are some things worth considering.

• Could you afford to replace your car? If you were to write your brand new car off, could you afford to replace it? If not, then comprehensive insurance might be your best option. It doesn't just protect other people's property, it protects your own car from damage as well.
• Don't be fooled by price. Sure, cost is important, but it shouldn't be your only factor when deciding. If you opt for a cheaper policy, ensure it's actually got the cover you need. In the long run, a more comprehensive policy might be the more affordable way to go, especially with a brand new car and inexperienced driver at the wheel.
• New for old replacement. If you have comprehensive car insurance and your car is written off, usually within two years of purchase, many providers will replace the written-off car with a new one. For new drivers, this could provide the ultimate peace of mind, knowing that your brand new car would be replaced with one of equal value.

Best insurance if you've got an old secondhand car

If you have an old secondhand car, then a comprehensive car insurance policy might not be worth the cost. It really comes down to how much the car would cost to repair or replace. If that's likely to be less than a policy would cost you, then another option might be more suitable.

• Third party property. This protects you from what is likely the most costly expense: other people's property. It doesn't protect your car, which is why it's cheaper, but if you hit someone else's vehicle, and are responsible for the repairs, it'll pay them for you. TPP usually covers at least $20 million worth of property damage, so it safeguards you from any major expenses and is usually the most affordable car insurance option for first car drivers.
• Third party property with fire and theft. If you want some protection for your secondhand car, but don't want to pay for comprehensive insurance, this is the policy option for you. It does everything that TPP includes, but it also protects your car from fire and theft. It doesn't provide cover for things like hail damage, storms and most other natural disasters like comprehensive insurance, but this generally also makes it a lot cheaper as a result. It might also be worth getting if you live in a bushfire-prone area.

Picture: GettyImages