Sick of paying too much for car insurance? Here's how to find a cheaper policy.
While the cost of insurance differs from person to person, there are a few ways you can ensure you're not getting ripped off. Whether you want bare-bones cover for less, or comprehensive insurance at a lower price, there is something out there for everyone. Take advantage of our insights and explore discounts to lower the cost of your car insurance.
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How much does car insurance cost?
|Third Party Property Damage||Comprehensive||Get Quote|
When you’re hunting around for the lowest price car insurance, you’ll see a lot of options with big differences in price.
Third party property damage is normally the least expensive option for your bare-bones car insurance essentials, Comprehensive is generally the most expensive, but you get the most protection, and Fire and theft falls between the two.
Want to know more about each cover type? Read on.
- Compulsory third party insurance (CTP): 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.
- Third party property damage (TPPD): Third party car insurance covers damage you cause to other cars and property. It won't cover any damages to your own car.
- Third party fire and theft (TPPD F&T): This type of car insurance typically 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 generally costs more than TPPD alone, but still 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 and also protects your own vehicle against fire, theft, floods, storms, accidents, and anything else the policy mentions. It costs the most, but can be money well spent if you have to make a claim.
You can potentially save a lot of money by opting for certain cars over others. Generally, newer model cars are less expensive to insure.
This is because they’re often 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.
In addition, the least expensive cars to insure, particularly for young drivers, are generally the safer, less expensive and less powerful ones.
Based on our analysis of 14 vehicles, the cheapest 3 cars to insure were:
Other ways to reduce the cost
- What factors affect the cost of insurance? Lower value, lower performance and smaller engined cars are will generally give you cheap car insurance.
- 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, and some insurers will give you cheap car insurance in return.
- 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 your 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? Commonly available brands like Holden, Ford and Toyota tend to be 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 How much does car insurnace cost?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.
There is no set cheap car insurance, but there are ways that you can save money on your policy. Try out these tips and see if you save some dosh.
- 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, look closely at Third party property damage or Fire & theft policies.
- Look at all your options. 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.
- Try a higher excess. If you increase your excess, your premiums will typically be lower. This is an amount you'll usually 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, insurers will often offer 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 less expensive it can be to insure. Alarm systems and immobilisers deter thieves, which reduces the chance of you having to make a claim, which in turn can reduce your car insurance premiums.
- Be a safe driver. You can 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 less expensive 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 a 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.
Cheap 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 a bargain on car insurance, it’s an unfortunate fact that you might not find it. Younger and less experienced drivers generally 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 inexpensive 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. If your record is better, you might get cheap car insurance. Consider not claiming for minor accidents if you can cover the costs yourself, as a no claims history can keep future premiums down.
- Take a driving course. Taking a defensive driving course can help convince insurers that you’re responsible on the roads.
- Beware paying in instalments. If the annual cost of your car insurance is too much to pay all at once, many insurers will let you pay your premium in instalments throughout the year. While it may save you from paying a lump sum, it typically costs more overall.
* Disclaimer: The offers compared on this page are chosen from a range of products finder.com.au has access to track details from and is not representative of all the products available in the market. Products are displayed in no particular order or ranking. The use of terms 'Cheap', 'Best' and 'Top' are not product ratings and are subject to our disclaimer. You should consider seeking independent financial advice and consider your personal financial circumstances when comparing products.