Car insurance is an important consideration for drivers across Australia, providing protection in the event of accidents, theft or damage to your vehicle. However, how much you pay for car insurance can vary significantly depending on a wide range of variables.
If you want a clear understanding of car insurance costs, Savvy can help. In this comprehensive guide, we explore the factors that influence insurance premiums, the different types of cover available and how you could save on your car insurance costs. Find out more with us today.
When you take out car insurance, insurance providers calculate your rates based on a variety of risks and other factors. This may include:
Vehicle type and age
The make, model, age and value of your car can affect your premium. Generally, high-end or luxury vehicles tend to have higher insurance premiums due to their higher repair and replacement costs, while standard car models and older vehicles may have lower premiums since they are typically less expensive to repair or replace.
Driver’s age and experience
Age and driving experience can both affect insurance premiums. Younger drivers, particularly those under 25, often face higher premiums due to their statistically higher risk of being involved in accidents. In contrast, more experienced drivers with a long history of safe driving and few or no previous claims are generally considered lower risk, resulting in lower premiums.
The way you use your vehicle can also impact insurance premiums. Insurance providers may consider factors such as how often you drive and how far, whether you use your car for business purposes or your safety record. Higher mileage or using the vehicle for business purposes may lead to higher premiums, as it increases the exposure to potential accidents.
The area where your vehicle is primarily kept and driven can play a role in determining insurance costs. Insurance providers take into account factors such as crime rates, traffic congestion and the likelihood of accidents in the area. As such, if you live in an area with higher crime rates or a higher number of accidents, you may face higher insurance premiums. Similarly, densely populated urban areas often have more traffic congestion, increasing the risk of accidents and influencing insurance rates.
Type of insurance policy
The specific type of policy you choose also affects the cost. For example, comprehensive coverage, which can offer more extensive protection for your vehicle and other parties involved in an accident, generally has a higher premium than third party property damage or third party fire and theft cover.
Understanding the different types of car insurance can help you make an informed decision about the coverage that best suits your needs. In Australia, there are four levels of cover:
Please note that CTP insurance is compulsory for all drivers, whereas additional levels of cover are optional and available at a further cost.
While car insurance can help protect you from many potential expenses, there are certain costs that it may not automatically cover. These may be:
Every driver has different requirements, so the best car insurance policy for you may be entirely different from what another person may consider the best for them. Before you take out insurance, it’s important to assess your needs to determine what sort of coverage would suit your circumstances. Consider factors such as the value of your car, your budget and your risk tolerance, and avoid paying for coverage you don’t require.
The next step is to compare insurance options. With Savvy, you can compare car insurance quotes in minutes using our 100% free comparison tool, helping you find the best possible deal from our partners.
Select your car make and find out how much it may cost to insure, read helpful guides and receive instant quotes from our partnered insurers.
Savvy (ABN 78 660 493 194, ACR 541 339) provides readers with a variety of car insurance policies to compare. Savvy earns a commission from our partnered insurers each time a customer buys a car insurance policy via our website. All purchases are conducted via our partners’ websites. The integrity of our comparison service is unaffected by our partnerships with those businesses and our effort remains to bring further brands that do not already use our comparison service onboard.
Savvy’s comparison service includes selected products from a panel of trusted insurers and does not compare all products in the market. Any advice presented above or on other pages is general in nature and doesn’t consider your personal or business objectives, needs or finances. It’s always important to consider whether advice is suitable for you before purchasing an insurance policy. We always recommend readers to consult the Product Disclosure Statement (PDS) of different policies before purchasing your car insurance.