Only need temporary car insurance? When there's a will, there's a way.
If you only need car insurance for a brief period, such as a week or a month, there aren’t any policies specifically designed to provide this type of cover. However, this doesn’t mean you have zero options.
One of our top hacks is actually one of the most obvious: take out a regular old policy, pay monthly, and cancel your policy when you don't need it anymore. Yes, this is allowed. No, we're not trying to trick you.
Read on to learn more about this hack.
Want short term car insurance? Start comparing some options
Only want car insurance for a short time period? We've got your solve.
If you're after car insurance for a short-period of time for whatever reason, this is probably the simplest way to get cover for your vehicle.
Take out a car insurance policy the same way you usually would. Pay monthly as opposed to yearly. Bonus points if you opt for an insurer that doesn't charge you extra for paying monthly (hint: you can find them in our table above).
When you're done with needing cover, cancel your policy!
Whilst you'll need to hack a small cancellation fee, it's still one of the better cover options you've got.
Cancellation fees by car insurance brand
How much will your insurer charge in cancellation fees if you cancel your car insurance early? Check the table below for more information:
|Brand||Cancellation fee||More info|
|1300 Car Insurance||Cancellation fee of $40||More info|
|1st for Women||Cancellation fee of $40||More info|
|AAMI||Cancellation fee of $30 for each car insured on the policy, plus FSL, GST and stamp duty, if applicable||More info|
|Allianz||If you cancel the policy, you may receive a refund of the unused portion of the premiums, minus reasonable administration fees||More info|
|Australia Post||Cancellation fee of $40||More info|
|Budget Direct||Cancellation fee of $40||More info|
|CGU||No cancellation fee. If you cancel your policy before it ends, CGU will refund a portion of the unused premium||More info|
|Dodo||Cancellation fee of $40||More info|
|GIO||Cancellation fee of $30||More info|
|ibuyeco||Cancellation fee of $40||More info|
|NRMA||Cancellation fee of $30, plus GST and any other government charges that apply||More info|
|Ozicare||Cancellation fee of $40||More info|
|QBE||If you've paid your premiums in advance, QBE will refund you the proportion of the premium for the remaining period of insurance, less any administration fees||More info|
|RACQ||RACQ will refund your remaining premiums if you cancel your policy prematurely. If the refunded premiums are less than $100, a fee of $10 will be deducted. If the refunded premiums are more than $100, a cancellation fee of 10% of the refunded amount will apply, up to a maximum of $80||More info|
|Real||Cancellation fee is specified in the Certificate of Insurance||More info|
|Virgin||Cancellation fee of $40||More info|
|Woolworths||Cancellation fee is specified in the Certificate of Insurance||More info|
|Youi||Cancellation fee of $33||More info|
Not quite the right fit? Let's find you another option.
What is temporary car insurance?
Temporary car insurance is a car insurance policy that provides cover for a shorter time period than the usual insurance term of 12 months. For example, if you only needed to insure a vehicle for a week, a month or even six months, you would need to find a temporary car insurance solution.
However, Australian car insurers do not offer specific short-term car insurance cover. Instead you will have to choose one of the four following options to get the cover you need:
- Find a pay-as-you-drive car insurance policy
- Pay premiums monthly or fortnightly
- Add a driver to an existing policy
- Rent a car instead
Each of these options has its own pros and cons, so keep reading to find out which option is better for you.
Who can benefit from temporary car insurance?
There are several reasons why you might need to get temporary car insurance, such as:
- You have a short-term permit to drive an unregistered vehicle, for example if you are taking it to a mechanic’s workshop
- You’re planning on moving overseas in less than a year
- You sell your car before the 12-month insurance term comes to an end
- You need transport to and from a short-term summer job
- You own a sports car or classic vehicle that you only drive for a short period each year
If any of the above scenarios apply to you, it’s time to start looking for short-term car insurance. Let’s take a closer look at the three options available to you and their benefits and drawbacks.
What type of cover is available?
There are three short-term car insurance options to choose from:
- Pay-as-you-drive policies. This type of policy lets you only pay for the distance you drive, while still extending comprehensive car insurance benefits for an ongoing period. You might think of it as a temporary car insurance that works based on distance driven, instead of for a period of time.
- Pay premiums fortnightly or monthly. Another option is to select a standard car insurance policy of your choice and pay your premiums monthly or fortnightly. This can be a fast and effective way of finding the right type of cover for your needs and accessing the full range of car insurance benefits. Once you no longer need cover, simply cancel the policy.
- Add a driver to an existing policy. If you’re borrowing a relative or friend’s car for a temporary period, you could ask them if they would consider adding you to their car insurance policy as a listed driver.
- Rent a car. This option may be more cost-effective than you think. Many credit cards will let you pay for rental cars with reward points, and there are many car rental discounts available, such as free upgrades, free days at no extra cost and straightforward price reductions. Some credit cards also offer complimentary rental car insurance cover, or you can purchase the cover you need from the rental company.
How does short-term car insurance work?
Which of these four short-term car insurance options is the best solution for your cover needs? Check out the table below for more information on how each option works, its benefits and its disadvantages:
- How it works: Choose an insurer that calculates your premium based on the distance you drive.
- Who it could be suitable for: If you need temporary car insurance in Australia and have a rough idea of how far you will be driving.
- Enjoy all the benefits of comprehensive car insurance
- The less you drive, the less you pay for cover
- Full range of optional extras available
- You need to have a rough idea of how far you’ll be driving all up, and not just how long you need the car for
- An additional excess will apply to claims if you have exceeded your nominated distance
- A “price floor” will typically apply, limiting your savings if you’re only using the car in the very short term
- Generally only available with comprehensive car insurance policies
Pay premiums fortnightly or monthly
- How it works: Pick any car insurance policy you want that allows you to pay your premiums fortnightly or monthly as you go rather than annually in advance. When you no longer need cover, cancel the policy.
- Who it could be suitable for: Anyone who needs short-term car insurance in Australia and wants the freedom to pick the policy of their choice.
- Choose from an extensive range of policies
- Tailor cover to suit your needs
- Choose from comprehensive, third party fire and theft, and third party property damage policies
- Only pay for the cover you will use
- Cancellation fees apply
- You will need to pay special attention to the policy terms and conditions to ensure this is a viable choice
Add a driver to an existing policy
- How it works: A temporary driver is added to the car owner’s existing car insurance policy for a limited period.
- Who it could be suitable for: People who are borrowing someone else’s vehicle for a short period, for example if you’re home from uni for the summer and driving your parents’ car.
- No need to take out a separate policy
- Simple and convenient option
- Access all the benefits of a regular car insurance policy
- Can significantly increase the cost of cover
- Make sure to avoid the illegal practice of "fronting", which is where you wrongfully list someone else as the main driver in return for cheaper premiums
Rent a car
- How it works: Rent a car for the period required.
- Who it could be suitable for: People who are moving house and may require a specialist vehicle such as a ute or a van.
- Great for anyone who needs a very short-term solution
- You are able to choose a vehicle to suit your needs
- There are many discounts and savings available
- Some credit cards offer complimentary car hire insurance
- You can purchase cover from the rental company to cover the vehicle during the rental period
- Insurance from rental companies can be expensive
- Is only suitable for very short-term needs
Who is eligible for short-term car insurance?
Short-term car insurance is available to suit the needs of a wide range of Australian drivers. If you hold a valid licence that allows you to drive in Australia, you’ll generally be able to qualify for cover.
However, special eligibility requirements may apply depending on the temporary car insurance option you choose. For example, if a friend or relative is going to add you to their policy as a listed driver, you’ll need to make sure that you list the correct person as the main driver of the vehicle.
In addition, some insurers may refuse cover to drivers of specific ages, such as those under 18 years of age or senior motorists. Check with your insurer for full details of any eligibility requirements that apply.
Can you get six-month car insurance in Australia?
It is not possible to find dedicated comprehensive or third-party property car insurance policies that cover you for a set period of six months. Instead, the most cost-effective way to get the cover you need can be to buy a 12-month policy and then simply cancel it after six months.
However, make sure you look closely at the early cancellation fees and terms set out in the policy before deciding whether this option will save you money. Issues to be wary of include:
- Cancellation fees. Some insurers charge a fee if you cancel your policy after six months. This can be up to around $40 depending on the insurer.
- Premium refunds. If you’re paying in advance for 12 months, many insurers will refund your unused premium.
- Paying month to month. If you’re paying your premiums on a month-to-month basis anyway, you shouldn’t need to worry about refunds.
Are there any short-term car insurance exclusions?
The general exclusions that apply to ordinary car insurance policies also apply to short-term car insurance. For example, you will not be covered if:
- You were driving while under the influence of alcohol or drugs
- Your vehicle was being used in an unsafe or unroadworthy condition
- Your vehicle was being driven while overloaded with passengers or goods
- Your claim is for wear and tear, gradual deterioration, rust or depreciation
- Your claim is for tyre damage caused by road punctures, cuts or bursts
- Your claim is for repairs to old damage
- Your claim is caused by mechanical, structural or electrical failures
- Your claim is for intentional loss or damage caused by you or someone acting on your behalf
- Your car is legally seized or repossessed
- Your claim arises due to your involvement in criminal or illegal activity
- You fail to properly secure your car after it breaks down, is involved in an accident or is stolen and recovered
You can find out more about what car insurance won’t cover in our guide to car insurance exclusions.
How much does short-term car insurance cost?
The cost of short-term car insurance varies depending on the option you choose:
- Pay-as-you-go policy. These can be an affordable option if you only drive a limited amount. However, a minimum premium or "price floor" applies, so don’t expect cover to be dirt-cheap.
- Pay premiums monthly or fortnightly. Choosing this option allows you to shop around and compare a wide range of policies before selecting one that offers good value for money. However, remember to include cancellation fees when calculating total costs.
- Add a driver to an existing policy. The cost of this option can vary greatly based on the added driver’s age, gender, driving history and more.However, in many cases, adding an extra driver can work out to be much more cost-effective than buying two separate policies.
- Rent a car instead. With this option you need to consider the cost of renting a car and the cost of insurance for the vehicle. How long you need the vehicle will obviously have a huge impact on cost, while it’s also important to be aware that insurance purchased from rental companies is generally quite expensive.
Remember too that insurers will assess a number of other factors when calculating your premium, including your age, gender, driving experience, claims history, the car you drive and where you live. Our guide to the cost of car insurance outlines all the factors that can affect your premium.
How to choose short-term car insurance
Which short-term car insurance option is right for you? To work this out you’ll need to answer a few simple questions:
- Why do you need cover?
- How long do you need cover for?
- What type of car insurance do you want?
Once you know which of the four options is the best fit for you, it’s time to start comparing quotes and policy features across multiple insurers.
FAQs about short-term car insurance