Ways to save money on car insurance premiums
Some car insurance tricks that could help you save on your premiums
Driving habits that could reduce your premiums
Your habits on the road could affect your car insurance premium. Doing the following could help you save on your car insurance premiums:
- Maintain a good driving history. Staying safe on the roads and keeping a clean claims history will generally have a positive effect on your car insurance premium, especially if you have a good no claims bonus
- Take a defensive driving course. Young or beginner drivers could benefit from taking a defensive driving course. Not only could this make you a better and safer driver, but your insurer may reduce your insurance costs when you complete the course.
- Be on the road less. When it comes to calculating premiums, insurers tend to favour drivers who are on the road less. If you don’t drive your car to work every day, or if you work close to home, purchasing a low kilometre or pay-as-you-drive policy could save you money on car insurance premiums.
- Safe and secure parking. If you can store your vehicle in a locked garage or carpark, it could result in cheaper insurance. Conversely, parking your car on the street could increase your premiums.
Excess and premium tips
How you purchase and pay for your car insurance could also affect your premiums, as well as the amount of excess you opt to pay for a car insurance claim. Here are a few ways you could get cheaper premiums:
- Pay your premiums upfront. Paying your premium annually may be cheaper than paying it in fortnightly or monthly instalments, as yearly premiums typically don’t attract as many fees.
- Increasing your basic excess. Opting for a higher excess will usually result in lower premiums, and vice versa. If you’re a safe driver, paying a higher excess could be better in the long run than paying a higher premium every year. However, only consider increasing your excess if it’s an amount you can afford to pay in the event of a claim.
- Taking advantage of discounts. Some insurers offer discounts on your first year of cover when you purchase your policy online. Multi-policy discounts may also be available if you take out more than one policy with an insurance provider (e.g. a car insurance policy and a home insurance policy).
Reviewing and updating your policy
Sometimes reviewing and updating your policy could help you find savings on your car insurance. You could potentially reduce your premiums by:
- Putting an age restriction on your policy. Restricting young drivers (typically under 25 years) from driving your car could decrease your insurance costs, as they may be regarded as a higher risk by insurers.
- Removing unused benefits. If you have optional extras on your policy, consider whether they’re worth keeping. Some of these additional benefits on your policy may include windscreen excess cover, accident hire car and roadside assistance. While optional extras provide more cover, they’ll also most likely increase your premiums.
- Reconsidering your type of cover. If the amount you’re paying in comprehensive cover outweighs the benefits you’re receiving, you might consider changing to a cheaper level of cover like Third Party Fire and Theft or Third Party Property Damage car insurance. Just keep in mind that these third party car insurance policies won’t provide as much cover for your own car as a comprehensive car insurance policy.
- Reviewing your policy annually. You may find cheaper premiums by comparing car insurance quotes every year. The 12-month mark is when premiums typically increase and online discounts also expire around the same time.
Before making any changes to your cover, consider reading the relevant Product Disclosure Statement (PDS) to check your policy’s full terms and conditions (T&Cs), inclusions and exclusions. The Target Market Determination (TMD) may also help you figure out if the cover is right for your circumstances.
Meet our car insurance expert, Adrian Taylor
As a General Insurance expert with over 13 years’ experience in financial services, Adrian Taylor is passionate about demystifying car insurance for consumers, so they have a better understanding of what they’re covered for. Adrian’s goal is to make more information available from more insurers, to make it easier to compare and save.