How much is car insurance

If we were to take an average car insurance cost from all three cities, we would get the following prices:

• Toyota Corolla: $918.36 for men and $842.84 on average for women
• Mazda 3: $994.01 for men and $963.89 on average for women
• Toyota Hilux: $1059.25 for men and $1071.34 on average for women
• Holden Commodore: $1091.56 for men and $1057.72 on average for women

It’s important to keep in mind that these averages reflect a diverse range of prices with a difference of hundreds of dollars between the cheapest and the most expensive policy.

These averages could be wildly different to how much it costs to insure your own car, and you should exercise caution in applying these averages to your car before purchasing a car insurance policy.

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What’s behind the cost of car insurance premiums?

There are so many factors that contribute to the cost of car insurance, some of which you can choose (e.g. level of cover and whether you apply age restrictions to other drivers who use your car) and others that you can’t control, such as your age and gender. Getting your own quotes will give you a much better idea of what car insurance will cost for your situation.

Car insurance companies will set your annual premiums based on specific formulas which include:

• what type of coverage you’re after: do you want cover for third party property damage, or comprehensive cover? Adding in optional extras like roadside assistance can also increase annual premiums. Some comprehensive policies include roadside assistance and free hire car and other optional extras like windscreen excess, while others do not.
• your driving record and claims history: if you’ve had accidents in the past or made car insurance claims in the past this may increase the insurance provider’s risk and their car insurance rates. Many insurers reward drivers who have a good driving history and no claims history with a no claims discount.
• your age and gender: as evidenced above, young drivers are riskier to insure and face higher car insurance rates than older drivers. Likewise, male motorists can also face higher annual or monthly premiums than female drivers. Keep in mind that if you choose to insure younger driver’s (such as your teenage children) this can increase costs based on the younger driver’s age and driving history.
• the market value of the car: perhaps the biggest factor which will determines the cost of car insurance is the market value of your car, as well as the cost of repairs and sourcing spare parts.

Why do I need car insurance?

While all motorists require Compulsory Third Party (also known as CTP or Greenslip cover) to drive on the road, this only covers you for legal liability should you cause bodily injury to others. It doesn’t allow for additional coverage such as collision, fire, theft, not at fault accidents and more.

There are several different types of car insurance, from third party property damage to comprehensive coverage policies. Choosing a lower level of cover means you will have a lower premium but might not have the full coverage you’re looking for. You can see exactly what is and isn’t covered in the product disclosure statement (PDS for short).

Get your own quote today

You can compare car insurance policies in minutes, for free, with Compare the Market. Our car insurance comparison service is easy to use and lets you weigh up policies by coverage, price, excess payment and other features. If you see a deal you like, you can purchase right then and there – if you already have cover, we can help you switch over with ease.

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Canstar reveals the average annual premiums for comprehensive car insurance policies in different parts of Australia. Are you paying more than the average driver in your state?

A level of car insurance is an unavoidable expense for most Australian households, but the cost can vary massively depending on your personal circumstances, the level of cover you get and, of course, which insurance provider you choose.

What’s the average cost of comprehensive car insurance in Australia?

The tables below show the average cost of comprehensive car insurance premiums in the different states and territories in Australia, broken down by various driver profiles. These average premiums are based on Canstar’s most recent Comprehensive Car Insurance Star Ratings.

New South Wales

Victoria

Queensland

South Australia

Western Australia

Tasmania

Northern Territory

Source: www.canstar.com.au. Prepared on 09/08/2022. Based on comprehensive car insurance policies rated in Canstar’s 2022 Car Insurance Star Ratings. Premiums include quotes for both new and used cars for a range of scenarios, with a state-specific target excess ranging from $600 to $750. NSW and ACT premiums have been combined into NSW premiums.

What affects the cost of car insurance?

How much an individual driver pays for their car insurance can depend on a wide range of factors. When applying for cover, the insurance provider will ask you questions to help it calculate the level of risk involved in insuring your vehicle. Based on your answers, the provider will provide a quote specific to your situation and this can vary significantly from driver to driver. Here are some of the factors providers typically take into account.

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The level of cover you choose

Generally, a policy with a greater level of cover will cost more. For example, a comprehensive policy will typically be more expensive than a third party property policy, as the provider is agreeing to cover you for a wider range of risks. If you choose to add optional extra cover to your policy, such as roadside assistance, this will usually also add to the cost of the policy.

Driver’s age and gender

As Canstar’s data above shows, younger drivers on average pay more in comprehensive premiums than older drivers. Drivers under 25 years of age pay the highest premiums on average, and among this cohort of drivers, male drivers pay more than females.

The vehicle being insured

Car insurance providers factor in various characteristics of the vehicle being insured when calculating premiums, such as its age, make and model, security features, and whether any modifications have been made to it. Generally speaking, the greater the risk that the vehicle will be involved in an accident or will be stolen and the more costly it will be to repair or replace, the higher the premium may be.

Where you live

Providers may also charge higher premiums to drivers who live in areas with high crime rates or where there is an increased risk of extreme weather events. If your car is parked securely at night, such as in a locked garage, your provider may reflect this by reducing your premiums.

Your driving habits

When taking out insurance, you may be asked to estimate how many kilometres you will drive per year. The more you drive, typically the higher the risk that you will be involved in an accident, which could affect your premiums. In addition, if you use your vehicle for commercial purposes as well as personal use, your provider may reflect this in the amount it charges to insure you, or apply other terms and conditions on your cover. If you don’t drive very often or very far, you could also consider pay as you drive car insurance.

Your excess

A car insurance excess is the amount that you will need to pay to your provider towards the cost of repairing or replacing your car if you make a claim. Some car insurance providers allow policyholders to choose from a range of excess amounts and, generally, the higher the excess you choose, the cheaper your premiums will be. Remember, though, that you will face higher costs at claim time if you take that approach.

Your driving record

Providers may charge lower car insurance premiums to experienced drivers who have not made car insurance claims in the past. This is sometimes referred to as a ‘no-claim bonus’.

The car insurance provider you choose

It can pay to shop around a variety of insurance providers, as the premiums you’re quoted can vary significantly. For example, Canstar’s 2022 Comprehensive Car Insurance Star Ratings showed drivers could save over $600 by switching to a 5-Star Rated policy, compared to other policies on Canstar’s database.

If you’re weighing up a range of providers, make sure the level of cover is equivalent and you’re not inadvertently paying less for reduced protection. You might like to consider sign up offers for car insurance, factoring in if the sign up offer means you’ll be getting a better deal overall.

How can you save on the cost of car insurance?

If you feel like you’re paying too much on car insurance, here are some quick tips that may help you save on your premiums.

1. Shop around: Avoid the temptation to auto renew your car insurance without checking if you could get a better deal elsewhere.
2. Buy online: Some providers offer a discount if you take out your car insurance policy online, instead of over the phone.
3. Choose a higher excess: But remember to budget for the higher costs if you need to make a claim.
4. Pay premiums annually: If your budget allows, some providers give customers a discount if they pay the full year’s premium upfront, rather than in monthly instalments.
5. Prioritise safety and security: You may be able to keep premiums low by taking steps to keep your car secure, such as through additional security features. Keep in mind though that some costly car modifications can have the opposite effect, as they can increase repair costs for the provider if you have an accident. Driving safely on the road may also help you to maintain a clean claims record, which could help you avoid future premiums hikes.
6. Ask for support from your car insurance provider if you need it: If you’re experiencing financial hardship, it could be worth checking whether your provider can offer any temporary relief.

For more tips on keeping costs down, read our guide to saving on your car insurance premiums.

Cover image source: lev.studio/Shutterstock.com.com

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