Want to save on car insurance? Getting it for cheap may be easier than you think...
Car insurance is an essential investment for every driver, offering important financial protection in the event of accidents, fire, theft and more. It can seem pricey, but it’s still cheaper than paying out of pocket for damage if an accident happens.
Depending on what you’re looking for, there will be an option that is cheapest for you. Whether you want bare-bones cover for dirt cheap, or comprehensive insurance at a great price, there is something for everyone.
This guide explains how to find the cheapest insurance, no matter what you’re looking for.
Compare basic car insurance options from Australian brands and apply securely online
When you’re hunting around for the lowest price car insurance, you’ll see a lot of options with big differences in price. These are:
- Compulsory third party insurance (CTP): Known as a Green Slip in NSW, this is mandatory car insurance that you must have in order to get your car registered. It covers injuries and deaths suffered on the road, but no vehicle damage of any sort. The cost of this is automatically added to registration everywhere except NSW, where you have to buy it separately. If you live in NSW, learn how you can find the cheapest CTP car insurance, or read on to find out how to get the best prices for comprehensive and other third party car insurance.
- Third party property damage (TPPD): This cheap third party car insurance covers damage your vehicle causes to other cars and property. This is the bare minimum level of optional insurance coverage and everyone should get it. Learn more about TPPD here.
- Third party fire and theft (TPPD F&T):This type of car insurance costs more than just TPPD, but also covers your own vehicle from damage, specifically, damage or loss from fire and theft, two of the most common vehicle hazards. It’s not as cheap as TPPD alone, but costs less than comprehensive car insurance and offers a balanced level of cover.
- Comprehensive: Comprehensive car insurance is the highest level of protection. It includes all the benefits of third party insurance, as well as excellent protection for your own vehicle against fire, theft, floods, storms and anything else the policy mentions. Each company usually has a slightly different comprehensive insurance policy. It costs the most, but can be money well spent if you have to make a claim.
How to get lower car insurance premiums?
There are some factors that have a big effect on your premiums no matter where you get your car insurance.
- Your age. Young drivers are riskier and pay higher premiums than older drivers.
- Your sex. Women make fewer car insurance claims than men overall, and generally have get lower premiums.
- Where you live. Less densely populated places have fewer accidents and so get lower premiums. More densely populated spots, particularly ones at a higher risk of incidents such as theft, will result in higher premiums.
- Your job. Truckers, delivery drivers, taxi drivers, travelling salesmen and anyone else who’s always on the road will pay higher premiums. More time driving puts you at higher risk of an accident.
- Vehicle size. Larger vehicles tend to be safer in a crash, and get reduced premiums compared to smaller vehicles.
- Engine power. Stronger engines raise premiums.
- Age of your car. Older cars tend to be less valuable and therefore cheaper to insure. The catch is that they are often more expensive to repair due to scarcity of parts. This means that when you have an accident in an older car, there’s a chance that the damage will cost more to repair than the car itself is worth. Because you will not be able to claim more than a car’s current market value or agreed value, if you have an old car it’s often better to settle for basic third party insurance and save up to make sure you can afford to replace it later.
Save money on your car insurance by making smart decisions. Each of these tips can affect your premiums.
- Choose the right policy for you. While comprehensive car insurance offers the highest level of cover, many people simply don’t need it if their vehicle is a little older or not that valuable. If this sounds like you, steer clear of comprehensive and pick either TPPD or TPPD F&T. Choose TPPD for the lowest prices possible, or TPPD F&T if you’re willing to pay higher premiums in case of your car being stolen or destroyed by fire.
- Look at all your options. For the best prices, always play the market and request new quotes from your current insurer. A lot of companies in Australia give better deals to new customers in order to lure them away from competitors. Take advantage of this by switching car insurance instead of renewing, or asking for a new customer price from your current insurer. Always be looking for a better deal and don’t plan on staying with your current insurer forever.
- Try a higher excess. Are you a safe driver? If so, consider raising your excess. This is an amount you have to pay when making a claim, and it can be anywhere from several hundred to several thousand dollars. Most insurers will offer much lower premiums if you get a higher excess. If you’re not a safe driver however, or you anticipate needing to make a claim at some point, you might be better off keeping the excess lower.
- Look for a no claims bonus. For every year you don’t make a claim on your policy, your insurer will offer you an extra discount off the cost of cover. You can often, but not always, take this discount with you when switching companies.
- Nominate your drivers. If you have the chance to nominate drivers on your policy, it might be worth doing. Nominating fewer drivers and, if possible, only drivers aged over 25 and with good driving records will keep the cost of your premiums down.
- Ensure your car has an alarm in place. The more secure your car is, the cheaper it is to insure. Alarm systems and immobilisers deter thieves, which reduces the chance of you having to make a claim, which in turn reduces your car insurance premiums.
- Be a safe driver. Take a defensive driving course to get a safe driver discount and some new skills. This is especially worth considering for younger drivers.
- Keep a clean driving history. This isn’t always possible, of course, but keeping your claims history and traffic infringements to a minimum will help to keep your premiums much lower.
- Park in a garage overnight. Cars that are kept in locked garages overnight are far cheaper to insure than those that are left out on the street.
- Look for more discounts. It always pays to keep an eye out for discounts. Buying car insurance online, for example, can get you up to 20% off with some providers, while purchasing another policy (such as home and contents) from the same insurer might get you 10% off both. These can add up and make all the difference in finding the cheapest car insurance available.
- Shop around and compare quotes. Don’t just sign up for the first policy you come across. Compare the features and benefits of several policies before obtaining multiple quotes. Then see how each policy stacks up against the competition in both price and quality.
You can save a lot of money by opting for certain cars over others. Generally, the cheapest cars to insure in Australia are newer model Toyota, Holden and Ford vehicles. This is because they’re made by Australian manufacturers with an expansive network of approved mechanics and service locations, and also because they have inexpensive and widely available spare parts, particularly for newer models.
In addition, the cheapest cars to insure, particularly for young drivers, are generally the safer, less expensive and less powerful ones.
- What factors affect the cost of insurance? Lower value, lower performance and smaller engined cars are generally cheaper to insure.
- How safe is your car? Vehicles with high Australasian New Car Assessment Program (ANCAP) safety ratings are typically cheaper to insure. Examples of such cars include the Toyota Corolla, Mazda 6 and Nissan Pathfinder.
- How is your car's fuel economy? Cars that aren’t too thirsty are great for the environment, so some insurers will make them cheaper to insure.
- Does your car have a higher incidence of being involved in an accident? Insurance companies look at crash statistics and consider the level of risk before they insure any car. Vehicles like station wagons and family sedans tend not to be involved in as many crashes as some other vehicles.
- Is you car likely to be stolen? Certain models are less likely to get stolen than others, meaning they pose less of a claims risk to insurers and enjoy lower premiums.
- Is your car common? Brands like Holden, Ford and Toyota are generally cheaper to insure because they have extensive dealership networks across Australia and parts are usually easy to find.
On the other hand, some cars will consistently cost more to insure.
- Do you drive an expensive car? If you’re driving a Ferrari, Lamborghini, Rolls Royce or any other expensive high-end car, you will pay higher premiums than cheaper cars.
- Does your car have a lot of grunt? Cars with greater horsepower go faster and therefore face a higher risk of being more severely damaged. These cars will yield a higher premium.
- Is your car more likely to be stolen? Certain makes and models are simply more popular targets for thieves.
- Do you cruise around with the top down? Vehicles with soft tops are easier to break into than conventional cars.
- Is your car rare or extensively modified? Parts for these cars are generally more expensive to find, hence these vehicles cost more to cover.
- Is your car safe? Cars with low safety ratings are more expensive to repair and include vehicles like the Chery J11 and the Ford Mondeo.
- How old is your car? Spare parts can be much harder to track down for older cars.
- Is your car diesel? Diesel cars often cost more to repair than petrol vehicles.
You do not want to find yourself underinsured, particularly if you depend on your car and you can’t afford to repair it yourself. The cheapest car insurance is not always the right one for your needs, even if savings are your number one priority. Consider how you’d manage financially if you were involved in an accident, or if your car was stolen, and you needed to pay out of pocket to replace it.
The type of car insurance you should get depends on a few factors:
- Is your car your pride and joy? Is it an expensive asset that needs the highest level of protection? Consider comprehensive insurance with as many discounts as you can find. Alternatively, if it’s a cheap and utilitarian vehicle that gets you from A to B, you should probably look at more basic third party, or third party fire and theft insurance policies.
- How much can you spend? Are you willing to spend $1,000 or more per year on a comprehensive policy, or is your car just not worth it? Work out how much you’re willing to pay in premiums and how much you are able to pay by yourself for repairs or replacements, and get a policy that balances the two needs.
- Do you know what type of cover you need? Look at what’s covered under each type of policy and decide which one is right for you. Only pay for the cover you’re likely to need, and resist adding optional extras unless you’ve decided they’re additions you really want.
What’s the cheapest car insurance for drivers under 25?
If you’re a driver under the age of 25, or a P-plater, and you’re looking for the cheapest car insurance, it’s an unfortunate fact that you might not find it. Younger and less experienced drivers pay more for car insurance than older drivers. They are disproportionately overrepresented in car accidents around Australia, meaning that if you’re under 25 or a P-plater, insurers will see you as more of a risk and will therefore up the price of your cover.
However, there are ways that young drivers looking for cheap car insurance can save money.
- Choose your car wisely. High-powered, luxury and expensive vehicles cost more to cover, so stay away from them if you want to save money on insurance. A cheaper car will not only save you money at the point of purchase, but will continue costing you less for its entire life.
- Build a safe driving record. The better your record, the cheaper your insurance. Consider not claiming for minor accidents if you can cover the costs yourself, as a no claims history keeps future premiums down.
- Take a driving course. Taking a defensive driving course will help convince insurers that you’re responsible on the roads.
- Beware paying in installments. If the annual cost of your car insurance is too much to pay all at once, many insurers will let you to pay your premium in installments throughout the year. While it may save you from paying a lump sum, it typically costs more overall.
Keep these points in mind to ensure a smooth claims process:
- Have you told your insurer everything? The knowledge that your past driving history will influence your insurance costs can seduce some people into “forgetting” to disclose certain details to their insurer. This is a big mistake. Most car insurance companies share information, so they will usually find out if you’ve been less than honest. Failure to disclose relevant details could lead to your claims being reduced or rejected, even if you’ve paid your premiums.
- How's your record keeping? When you’re involved in any incident that may lead to a claim, keep as many records of the incident as you can. Obtain the details (name, contact information, driver’s licence number, registration, insurance policy details) of all other drivers involved in the incident, and make sure to get details from witnesses as well. Take photos of the accident scene if it’s safe to do so, and record information about the make, model and damage of the other vehicles involved.
- If I'm in an accident, should I try to make a deal? Don’t attempt to settle a claim on the roadside by yourself, and do not admit any fault. Just provide as much information as you can and let the insurance companies work out who is to blame.
- When do I need to speak with my insurer? If you’ve been involved in an accident, report it to your insurer as soon as you are able. Once everyone is safe and you have contacted the police or ambulance (if need be), contact your insurer. This will ensure the prompt handling of your claim.
- Automatically renewed cover. This might be easy, but it’s not cheap. Insurers often offer better deals to new customers than they do to existing ones, so don’t just blindly renew your policy each year. Always check quotes from multiple providers, including your current one. If your insurer quotes you a lower new customer price than you’re currently paying, try asking for a discount. Premiums are always changing, so getting the cheapest car insurance means always looking at other options.
- Not knowing how your cover works. Check the fine print on your policy before signing up, and ask yourself if you know exactly what is covered, what’s an optional extra and what’s not covered.
- Making too many claims. Before you make a claim, remember that your claims history will influence the future cost of your premiums, and you may have a high excess to pay. If the accident wasn’t too severe, the excess alone might cost more than the damage and it might not be worth being hit with increased premiums. Don’t just claim on everything you can without considering it first.
- Is it too good to be true? Price is obviously a hugely important factor when shopping for cheap car insurance, but don’t just choose a policy based on price alone. Compare the features, benefits and limits of several policies on the market. If you find much cheaper car insurance from one insurer, look for the catch.
- A too high excess. You can save money by selecting a higher excess in return for cheaper premiums, but if your excess is too high it may make it too expensive for you to lodge a claim. A good excess is high but affordable.
- Letting others drive your car. If you have a policy that lets you nominate specific drivers or drivers above a certain age, don’t let an excluded driver take the wheel. They are usually not covered at all in the event of an incident.
- Not shopping around. You never know what cover is available until you get out there and look for it. Compare as many car insurance policies as you can to find one that covers everything you need at the cheapest price.
Feel like you're ready to compare?
If you want cheap car insurance for your vehicle, you’ll need to compare the cover options available from a range of insurers. From comprehensive cover to third party insurance, there are a wealth of policies and providers to choose from on the Australian market. The right policy at the right price is out there - you’ve just got to go and find it.