Like death and taxes, paying for car insurance is one of those inevitable things in life that is hard to escape. So, whether you’re just purchasing CTP insurance, or full comprehensive, it’s worthwhile trying to save money in your insurance costs.
There are a multitude of ways that car owners can seek to reduce the cost of their vehicle insurance, regardless of their history. Let’s explore some of the options available to Australian drivers to help reduce the premiums they pay on car insurance.
Insurers often offer discounts or lower premiums for drivers who pay for their insurance in one annual payment, as opposed to monthly. One of the most common ways to get a discount on your car insurance is to opt to pay this one-off annual payment, as opposed to separating it over monthly instalments.
Paying a large sum in one go can be a considerable upfront cost, so many drivers choose smaller monthly repayments. However, if the insurer charges you more over 12 months in higher monthly repayments, then it may not be worth it.
If you have the funds available, one option to consider that may reduce your insurance costs is opting for a policy in which you pay a higher excess. The excess is how much of an insurance claim you’ll pay yourself. As a higher excess ultimately saves insurance providers money, if you choose a policy with a higher excess, you may pay a lower premium.
Further, when you make an insurance claim that your insurer pays to you, this generally increases your premium. Come time to renew your policy, you may find that your premium is higher – even for small claims that are not your fault. But if you are paying a higher excess, it’s likely that you will be paying for smaller claims yourself. By not making smaller claims to your insurer, it’s likely that your premiums will not rise.
Insurers may offer discounts to drivers based on the average kilometres a vehicle is driven each year. For example, if your vehicle drives an average of 5,000km or less a year, you may qualify for a discount from your insurer, or be able to negotiate a lower premium. This may not be possible if you drive for work purposes or great distances frequently, but if you live somewhere with good public transport infrastructure, it could be worthwhile considering.
If your insurance policy offers competitive extras, such as roadside assistance, that you do not feel you really need or ever utilise, it could be worth considering removing these extras to reduce your premium. Being able to choose your own policy and edit it to suit your lifestyle and budget – while ensuring you’re covered in the event of an accident or theft – may be able to help you keep costs down.
When it comes time to renew your policy, it can be tempting to ‘set and forget’ your insurance and stick with the same provider – after all, insurance can be a frustrating life admin task. However, even if your policy was the most competitive in the market when you first signed up, doesn’t mean it still is 12 months on.
Insurers often offer discounted or more competitive premiums to newer customers to entice them to sign up. And unlike a mortgage which requires time, money, and paperwork to switch providers, you can simply choose to not renew your insurance with the same provider and switch to a new one.
Comparing your options through easy-to-use comparison tables is one way that drivers can find a policy that suits their needs and doesn’t break their budget.
Disclaimer
This article is over two years old, last updated on August 15, 2022. While RateCity makes best efforts to update every important article regularly, the information in this piece may not be as relevant as it once was. Alternatively, please consider checking recent car insurance articles.
This article was reviewed by Mark Bristow before it was published as part of RateCity's Fact Check process.
