Car Insurance for P-Platers

Car insurance for P-Platers isn't cheap. But there's still plenty you can do to find affordable car insurance cover, like comparing your options, or just getting a third party policy.

Just looking for the most affordable cover? The 3 cheapest car insurers for under 25s are:

1. Australia Post
2. Virgin Money
3. Budget Direct

_{Costs are based on a 20 year old male and female. This list is based on our 2019 Finder Awards research and includes 36 companies. Our full methodology can be found here.}

How much does insurance for P-Platers cost?

• 18 Year Old Female
• 21 Year Old Female
• 18 Year Old Male
• 21 Year Old Male

Monthly cost for an 18 year old female

Company	18 Year Old Female - Third Party Property	18 Year Old Female - Comprehensive
Budget Direct	$60.50	$221.69
Bingle	$46.20	$160.01
NRMA	$80.47	$183.58
AAMI	$66.24	$198.29

How did we get these costs?

• Female driver born 1/1/2000
• Silver 2016 Ford Falcon 4dr Sedan Semi-Auto
• Licence acquired in 2017
• Safe driver with no claims made in the past 3 years

• Drives 10,000-15,000 km per year
• Adjusted excess to $850 where possible
• Driver located in Sydney
• Policy starting 21/11/2018

Monthly cost for a 21 year old female

Company	21 Year Old Female - Third Party Property	21 Year Old Female - Comprehensive
Budget Direct	$34.88	$96.94
Bingle	$43.50	$155.73
NRMA	$58.60	$124.64
AAMI	$62.43	$130.19

How did we get these costs?

• Female driver born 1/1/1997
• Silver 2016 Ford Falcon 4dr Sedan Semi-Auto
• Licence acquired in 2014
• Safe driver with no claims made in the past 3 years

• Drives 10,000-15,000 km per year
• Adjusted excess to $850 where possible
• Driver located in Sydney
• Policy starting 21/11/2018

Monthly cost for an 18 year old male

Company	18 Year Old Male - Third Party Property	18 Year Old Male - Comprehensive
Budget Direct	$64.54	$213.13
Bingle	$58.32	$195.59
NRMA	$91.28	$209.53
AAMI	$74.70	$217.35

How did we get these costs?

• Male driver born 1/1/2000
• Silver 2016 Ford Falcon 4dr Sedan Semi-Auto
• Licence acquired in 2017
• Safe driver with no claims made in the past 3 years

• Drives 10,000-15,000 km per year
• Adjusted excess to $850 where possible
• Driver located in Sydney
• Policy starting 21/11/2018

Monthly cost for a 21 year old male

Company	21 Year Old Male - Third Party Property	21 Year Old Male - Comprehensive
Budget Direct	$33.28	$101.29
Bingle	$34.36	$127.34
NRMA	$52.85	$110.15
AAMI	$52.20	$126.76

How did we get these costs?

• Male driver born 1/1/1997
• Silver 2016 Ford Falcon 4dr Sedan Semi-Auto
• Licence acquired in 2014
• Safe driver with no claims made in the past 3 years

• Drives 10,000-15,000 km per year
• Adjusted excess to $850 where possible
• Driver located in Sydney
• Policy starting 21/11/2018

Your cost will differ depending on your circumstances. Some things that can affect the cost of your quote include your gender, the type of car you drive, the colour of the car, how long you have been driving, the amount of cover you need, plus more. Be sure to read the PDS to find cover that suits you.

_{* - We sourced this price by dividing Bingle's monthly cost into a daily cost}

What cover option is best for P-Platers?

Not sure which cover type to go for? Here's the downlow on each cover type to help you make a decision.

Compulsory Third Party Cover : Commonly known as greenslip insurance, CTP is mandatory for every driver in Australia. In many states, it's included in your car rego so you don't need to worry too much. It offers protection to the driver who is at fault for a motor vehicle accident which led to another person being injured.

Best for: Everyone - it's mandatory!

Third Party Property Damage Cover: The most basic policy. This provides coverage for any damages you may cause to someone else's vehicle or property. However, it won't cover the expense of repairing damages your vehicle incurs as a result.

Best for: Those P-Platers with cheaper cars or who are on a really strict budget.

Third Party Fire and Theft Cover: As the name suggests, this cover type ensures you are protected if your car is stolen, as well as covering you for fire damage. You're also covered if your car causes damage to someone else's property.

Best for: P-Platers who need a bit more cover without the pricetag.

Comprehensive Cover: If you want top cover, this is the option for you. It covers theft, vandalism, storms, flood, hail, fire, key replacement, emergency accommodation, hire cars, accidental damage (to name a few) - plus everything that's covered by cheaper policies.

Best for: P-Platers who want peace of mind, knowing that they have the highest cover available.

Compare car insurance cover levels

Want to save more in the long run? Look for policies with low excesses

An excess is the amount you pay when you want to make a claim. Premiums are one thing, but if you have to fork out an extra $1,000 after you've had an accident, that can easily eat away at your bank account. Before you sign on the dotted line, have a careful look at what excesses you'd be paying if you want to claim.

We've put together a summary on how 4 major underwriters treat excesses for a driver under the age of 25, inexperienced drivers (like a fresh new P-Plater), or for an unlisted driver (like your best mate that accidentally scratched your car while on a Maccas run). If you're a young P-Plater, you might need to pay multiple excesses - one for being inexperienced, and another for being under the age of 25. That's why it's so, so important to make sure you're getting a policy with fair excess rates.

Have a look at how some insurers treat excesses below:

Underwriter	Driver under age 21	Driver aged 21-24	Inexperienced driver	Unlisted driver
Auto & General	$600	$500	$500	$600
Insurance Australia Group	$800	$450	$400	No excess
Suncorp	$400	$400	$400	$1,400
Hollard	$1,200	$800	$800	$1,600- $2,000

Why does car insurance for P-platers cost more?

If you’re a P-Plater under the age of 25, statistically speaking, you’re more likely to be involved in an accident. According to figures from Victoria’s Transport Accident Commission, 19% of drivers who lost their lives on Victoria’s roads in 2016 were in the 18–25 age bracket, despite this group only representing 10% of this state’s licence holders. In addition, a review by the Australian Transportation Safety Bureau found that young drivers are at greater risk on the roads for a range of reasons including:

• Lack of driving experience
• Limited ability and judgement
• Underestimation of risks
• Deliberate risk-taking behaviours
• The use of alcohol and drugs

This means drivers under the age of 25 pay significantly more for car insurance. Even a 21-year-old driver will pay much less for cover than an 18-year-old and you might be surprised just how much premiums can decrease with each passing year.

What other factors impact the cost of car insurance for P-Platers?

There are several other factors that can affect the cost of car insurance for drivers under the age of 25, including:

• Your gender. Men, especially young ones, are considered more likely to engage in risky driving behaviours than women, so generally have to pay more for car insurance.
• Where you live. Some suburbs have a much higher rate of car theft than others.
• Where the car is kept. If your car is locked in a secure garage overnight, you’ll pay much less for cover than if it were parked on the street.
• How often you drive. Vehicles that are driven frequently are more likely to be involved in an accident than those only driven occasionally.
• The excess you choose. If you have the flexibility to vary your excess, selecting a higher excess will allow you to pay cheaper premiums.
• Any discounts that apply. You may be able to take advantage of discounts to lower the cost of your premium, such as savings for buying online or discounts for insuring multiple vehicles.

What should P-platers look for in a car insurance policy?

If you’re ready to compare car insurance for P-platers, remember to consider the following factors when weighing up the pros and cons of different policies:

• The sum insured. This is the total amount you’re covered for and there are two ways to calculate this amount: agreed value or market value. The agreed value is decided upon by you and the insurer ahead of time. The market value is the current value of your car when you make a claim, calculated based on the retail price of your vehicle, depreciation and a number of other variables. Market value cover is the cheapest and most convenient option, but you run the risk of your car being undervalued.
• The excess. Next, look at the excess you’ll be required to pay when you make a claim – is this an affordable amount? The best car insurance for P-platers allows you to adjust this excess so you can lower your premiums.
• Policy limits. What’s the maximum the insurer will pay for each specific benefit? For example, if a $500 limit applies to windscreen claims, will this be enough to cover replacement costs if your windows are smashed? If your car is stolen, for how long will your policy cover the cost of a rental vehicle?
• Extra features. Apart from the basics of cover, what additional benefits are included? For example, does your policy cover a hire car after theft, emergency repairs, towing costs, personal property in your car, caravans or trailers, or the cost of recoding your locks if your keys are stolen?
• Exclusions. Read the PDS for a full list of situations and circumstances where you will not be covered. Are there any situations where you would expect to be covered but no protection is available?
• The cost of cover. Finally, obtain quotes from multiple insurers to see how they compare. Check whether any premium loadings apply to your policy and find the insurer that offers the best value for money.

What car insurance traps should I avoid?

Finally, be wary of the following car insurance traps which can pose big problems for P-plate drivers:

• Under- or over- insuring. Make sure the level of cover you select is adequate for your vehicle. Don’t pay for comprehensive cover if your 20-year-old banger doesn’t need it and don’t skimp on cover if you’re driving a brand-new or expensive vehicle.
• Unapproved mods.If you’re buying a modified vehicle or planning on modifying your car yourself, tell your insurer. If you fail to do so and you need to make a claim, that claim may be refused.
• Failing to list drivers. If the driver of a car isn’t listed on the policy, then the car is usually uninsured as long as that unlisted driver is behind the wheel. Some insurers and policies have exceptions to this rule, but you will need to remember that there is generally no cover for unlisted drivers.
• Car dealer insurance. Don’t buy car insurance along with the car until you’ve had a chance to compare the policy to other options. The first car insurance policy you see will rarely be the best.

• Car finance insurance. If you’re buying a car under finance, as many P-platers do, it’s worth bearing in mind that some financiers will require comprehensive car insurance as a condition of the loan. This isn’t necessarily a downside, but you shouldn’t let yourself be pressured into an unsuitable or overpriced policy.

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Questions you might have

• Does the type of car I drive affect my premium?

  Yes, it most certainly does and for several reasons. The more expensive your car, the more it will cost to insure. For example, a late-model BMW is priced a whole lot higher than a humble Toyota Corolla, so this is reflected in your premiums. Other vehicle-related factors that influence the cost of cover include:

  • Some vehicles stand up to collision damage more than others and are cheaper to repair
  • How easy it is to find the necessary parts to repair some vehicles
  • Security and alarm systems installed on your vehicle can deter thieves and lower the cost of premiums
  • Some makes and models are more popular with thieves and therefore cost more to insure
  • Some makes and models are statistically more likely to be involved in an accident
  • Older cars are generally cheaper to insure because they have lost a lot of their value and cost less to replace

• Do I have to get my own car insurance policy or can I stay on my parents’ policy?

  There’s absolutely no requirement for P-plate drivers to invest in their own car insurance policy, so there’s no problem with remaining insured on your parents’ policy (as long as they don’t mind). In fact, it will often work out cheaper to share cover with Mum and Dad on the one family policy than for you to go out and purchase a separate policy. You’ll need to be listed as a driver on your parents’ policy, and this will obviously mean their premiums will increase. They might ask you to chip in to cover the cost, but if you’re lucky they’ll foot the bill. However, keep in mind that this option is only viable if the vehicle in question is owned by the policyholder, such as your mum or dad, and can’t be done if you’re the car’s legal owner.

• Can I put insurance under my parents’ names if they don't own the car?

  You might be tempted to save money on P-plate car insurance by putting the policy in your mum or dad’s name, even though they don’t own the car. However, this practice, known as “fronting”, is not a good idea. If you try to put your policy in a parent’s name when you’re the main driver, you run the risk of any claim you make being rejected or your entire policy voided – which can have expensive consequences. The best approach is to put the car insurance in your name right from the start. This will allow you to develop a good reputation with insurers and benefit from no-claim bonuses in the future.

Picture: GettyImages

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