Just got your P's? Find affordable car insurance that still gives you the protection you need.
The day you get your driver’s licence is one you’ll remember forever. Slapping on those red P-plates and hitting the road without supervision is a liberating experience – until you see the cost of car insurance and realise you might have to ask for a loan.
Car insurance for red and green P-platers costs significantly more than it does for fully-licensed drivers. This is part of the price you pay for being a young and inexperienced road user, but there’s still plenty you can do to find affordable car insurance cover that still offers all the protection you need.
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How do the cover options stack up against each other?
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. If you want to take out cover for damage to your car or a breakdown on the side of the road, you're looking at the more comprehensive cover options mentioned below.
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 budget.
Third Party Fire and Theft Cover: This gives you that little bit extra cover against life's uncertainties. 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.
|Damage to other people's property|
|Storm or flood|
|Emergency accommodation, transport and repairs|
|Replacement of keys|
|Contents inside the car|
|New car replacement|
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.
How can I save on car insurance?
Okay, so car insurance when you’re a P-plater is always going to be more expensive than when you have your full licence, but there’s still plenty you can do to keep your premiums to a minimum. Money-saving tips include:
- Secure your car. Reduce the chances of your car being stolen by using vehicle security systems like steering wheel immobilisers, microdotting, VIN etching and others. Some insurers will reward you for taking these precautions by lowering your premiums.
- Secure your garage. Cars that are kept in a locked, secure garage overnight can be substantially cheaper to insure than vehicles that are parked on the street.
- Take a safe driving course. Some insurers offer discounted premiums to policyholders who successfully complete an approved safe driving course, so check with your cover provider to see whether this is an option for you.
- Adjust your excess. By choosing a higher excess on your policy, you can enjoy lower premiums.
- Look for discounts. Did you know you can get as much as 25% off just for buying a policy online, or that some insurers will price-match their competitors? Keep an eye out for discounts that could help you lower your premium.
- Drive safely. Accidents are often completely unavoidable, but there’s plenty you can do to reduce the risk of damaging your car and needing to make a claim. Stick to the speed limit, don’t tailgate and always remember to use common sense. Insurers take your driving record and claims history into account when calculating your premiums, so keeping a clean rap sheet can go a long way to ensuring affordable cover.
- Shop around. Has your insurer sent you a car insurance renewal notice that seems too expensive? Don’t just automatically renew cover – shop around to see if another provider can offer better 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.
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.
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