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Module 7: How to dodge rising car insurance costs

Car insurance is rising faster than the rate of inflation – here's how to avoid soaring costs.

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As part of your 5-minute budget, you already know how much you pay for car insurance.

You may have noticed a big increase in your bill recently. Car insurance has been hit particularly hard by inflation. Premiums have increased by an average of 10.6% in the last 12 months.

And according to the latest Consumer Price Index Indicator, prices rose by a massive 16.3% for all types of insurance combined in the year to November, the fastest rate of any consumer spending category.

It now costs a whopping $1,358 per year for comprehensive cover for the average Australian. You could be paying as much as $2,430 or even higher depending on the insurer, your age and driving history.

The average Australian can potentially save $496* per year on their comprehensive car insurance policy.

How to get cheaper car insurance

Don't simply set and forget or settle for the insurer you've seen the advert for. Compare prices from at least 4 providers.

We researched 33 comprehensive car insurance policies and found a $1,620 difference between the cheapest and most expensive providers. The cheapest policy was $496 less than the average price.

Bingle, ROLLiN', Hume and Budget Direct performed best for price. On average, all cost less than $1,000 a year. Bingle was the cheapest on average. It cost $862 per year, over half the price of the most expensive provider. (To get our average costs we used 60 different customer profiles ranging in age, gender and location.)

Name Product Roadside Assistance Accidental damage Agreed or Market Value Finder Rating
Budget Direct Comprehensive
Agreed or Market
Finder's summary: The 2024 winner of our Best Value Car Insurance award. It's cheaper than most, plus you can lower costs by adding age restrictions.

⭐ Current offer: 15% off your first year's premium when you take out a policy online. T&Cs apply.

Who it might be good for: Anyone who wants a good value policy.
Youi Comprehensive
Agreed or Market
Finder's summary: The 2023 winner of our Best Features Car Insurance award. Plus, it's one of the only insurers to automatically include roadside assistance.

Who it might be good for: Those who want good customer service with lots of inclusions.
Australia Post Comprehensive
Agreed or Market
Finder's summary: Covers a little more than other insurers. You don’t need to pay an excess for windscreen repairs and cover applies to anyone who uses your car.

⭐ Current offer: Get $75 off your first year's comprehensive car insurance premium when you buy online. T&Cs apply.

Who it might be good for: Multiple people using one car.
ROLLiN' Comprehensive
Finder's summary: One of the most cost-effective insurers for under 25s, according to Finder research, with no aged-based excess.

Who it might be good for: Young drivers looking to keep costs down and anyone who’d like to get more flexibility from their car insurance.
QBE Comprehensive
Green Company
QBE Comprehensive
Agreed or Market
Finder's summary: Our best-rated Car Insurer for Customer Satisfaction in 2021/2022 and Green Insurer for the last 3 years.

⭐ Current offer: Save $75 when you purchase a new comprehensive policy online. T&Cs apply.

Who it might be good for: Those who want a trustworthy insurer and more cover than other brands, such as 3-year new car replacement (e.g. they'll give you money for a new car for up to 3 years if yours is written off).
Bingle Comprehensive
Finder's summary: Our data shows it’s the cheapest comprehensive policy. It just covers the basics such as damage to your car, theft and storms – it doesn’t go in for add-ons and extras.

Who it might be good for: Those wanting a low-cost, no-frills policy.
Kogan Comprehensive
Agreed or Market
Finder's summary: Kogan comes with all the perks that most comprehensive car insurance policies include, but you'll also be entitled to some benefits from its online store. This usually comes in the form of a gift voucher or discount if you buy online.

⭐ Current offer: Get $75 off first year premiums when you purchase Kogan Comprehensive Car Insurance online + $10 monthly credit. T&Cs apply.

Who it might be good for: Kogan shoppers and those after a good range of policy options.
Qantas Comprehensive
Agreed or Market
Finder's summary: You need car insurance so why not get one that lets you earn Qantas Points? It's good value too (it's underwritten by the same insurer as Budget Direct).

⭐ Current offer: Earn up to 20,000 Qantas Points with every Qantas Car Insurance policy you take out by 22 April. T&Cs apply.

Who it might be good for: People who want more bang for their buck with Qantas Points.

What should I look out for with car insurance?

There are a few other ways you can lower costs.

  • Choose a higher excess. In return, your insurer will offer you a lower premium. Just make sure you can afford to pay the excess.
  • Restrict drivers. This is a good option if you're over 25. Several insurers will lower your premiums if you restrict your policy to drivers over a certain age. Budget Direct, for example, has the biggest range of any major insurer: 21+, 25+, 30+, 40+ or 50+.
  • Low kilometre benefits. Car insurers including Budget Direct, AAMI and Everyday will lower your premiums if you drive less. There are also some new insurers, such as KOBA that let you pay by kilometre.
  • Review every 12 months. Insurers like to entice us in with sign-up offers and discounts. They can be good for the first year. After 12 months though, they'll often increase your premiums substantially.

Sadly, loyalty usually doesn't pay. Review your policy every year and compare to find a better deal.

*Based on the average cost of comprehensive car insurance of $1,358 and the lowest average policy of $862 across 33 policies.

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