Car insurance: loaned, leased or owned
Your guide to understanding the costs of car insurance for your car, whether it’s been financed, leased or you own it outright.
Key takeaways
- Car insurance costs often increase if your vehicle is financed or leased. For example, AAMI premiums for owned cars averaged $295 less than financed ones.
- Insurers often price financed cars higher due to historical claims data. This suggests a perceived higher risk factor.
- To potentially save on your premium, compare multiple quotes increase your excess and contact insurers to negotiate.
How does ownership affect the cost of car insurance?
Whether you own your car, lease it or have a loan on it will affect what you pay for car insurance. Typically, if your car is financed in one way or another (lease, loan) then your insurance quote will be more expensive.
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How we picked theseWhy is it more expensive to insure a financed car?
There doesn't seem to be a lot of rhyme or reason for this but it's usually based on the insurer's historical data. When we see pricing shifts like this, it's usually because the insurer has determined this specific factor to be riskier. It could be that of all the claims they've had to process, people with finance owing on their car tend to make more claims than people without finance on their car, and therefore the overall premium for financed cars is higher.
Don't own your car outright? Here's a few other ways to save on your insurance
Lying to your insurer isn't an option so you'll have to save on your premium in other ways. Lucky for you, there's a few options.
- Increase your excess. The higher your excess, the lower your premium will be. Just do this responsibly — you need to be able to afford it in the event you actually have to pay it.
- Get on the phone. Time and time again, I have been able to save hundreds by simply asking "Is there any flexibility on that price?". The worst they can do is say no. Usually though, they'll tweak the quote and you'll end up saving cash. I promise you, it's not as cringey as it seems.
- Compare your options. You can't know if there's a better offer available if you never bother to check. There can be hundreds, even thousands of dollars difference between insurers for almost identical policies. Be sure to get at least 3-5 quotes so you've got an idea of what's out there.
Compare car insurance
Whether your car is financed with a car loan, a lease or you own it outright — it'll need insurance. Compare options below.
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How we picked theseFinder Score for car insurance
We analyse over 30 car insurance products across insurance providers, and rate each one for price and features. We collect up to 36 quotes per product, for male and female drivers in New South Wales, Victoria, Queensland, South Australia, Tasmania and Western Australia. Quotes are collected for 20 year olds, 30 year olds and 60 year olds, assuming an excess of $850 for a 2020 Toyota Corolla 4 door sedan model, with an average 15,000 kms driven each year. While we are not allowed to display actual quotes, our Finder Score aims to serve as an indicative guide to how cost and feature competitive a product might be for you.
Our feature score assesses each product for more than 15 features across loss and damage coverage, repairs and assistance coverage, personal items coverage and policy coverage. Features we assess include but are not limited to legal liability, essential repairs, new car replacement, car hire events, roadside assistance, agreed or market value, windscreen damage and natural disaster coverage.
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