How to Reduce Your Car Insurance Cost in Australia

Car insurance premiums surged 15–25% in Australia in 2023–24, driven by rising repair costs, supply chain issues and extreme weather events. The average comprehensive car insurance premium now sits at $1,200–$1,800 per year depending on your vehicle, age and location. Here's how to push that number down.

1. Compare Every Single Year

Insurance companies rely on customer inertia. Premiums rise at renewal, often with little fanfare. The single most effective thing you can do is compare quotes from multiple insurers every year at renewal time. Key comparison resources:

• Finder.com.au and Canstar.com.au — free comparison tools
• Direct insurer websites — NRMA, AAMI, Budget Direct, Bingle, Youi
• Cashback platforms — check TopCashback Australia for sign-up cashback bonuses on new insurance policies

Budget Direct and Bingle are typically among the cheapest comprehensive insurers in Australia for many vehicle profiles. Youi is often competitive for older drivers.

2. Increase Your Excess

Your excess (the amount you pay out of pocket on a claim) directly affects your premium. Increasing your excess from $500 to $1,000 typically reduces annual premiums by $100–$300. This trade-off makes sense if you have an emergency fund to cover the higher excess and you're a careful driver with no recent claims.

3. Only Pay for What You Need

Assess your genuine coverage needs:

• Old low-value cars: For cars worth under $5,000, comprehensive insurance may not be economical. Third party fire and theft, or third party property only, can cost $300–$600/year versus $1,000+ for comprehensive.
• Agreed vs market value: Agreed value policies are typically more expensive. For newer cars, market value cover is often adequate and cheaper.
• Add-ons: Review windscreen cover, hire car cover, roadside assist, and other extras. Roadside assistance is often cheaper as a standalone NRMA, RAA, RACV or RAQ membership.

4. Pay Annually, Not Monthly

Paying monthly typically adds 10–15% to your annual premium through instalment fees. If you can afford to pay the annual premium upfront, the saving is immediate and guaranteed.

5. Garaging Your Vehicle

If your car is on the street overnight, insurers charge more. Securing it in a garage or locked driveway can reduce your premium by 5–15%. Update your insurer if your parking situation changes.

6. Reduce Annual Kilometre Estimate

Most insurers ask for your estimated annual kilometres. If you've moved closer to work, started working from home, or retired, your actual kilometres may be much lower than what your policy states. Reducing your estimated annual kilometres can lower your premium. Be honest — misrepresenting this could affect a claim.

7. Named Drivers Only

Adding young or inexperienced drivers to a policy significantly increases premiums. If a household member rarely uses the car, removing them as a listed driver reduces cost — but be sure this accurately reflects reality, as using a vehicle with an unlisted driver can void coverage.

8. Loyalty Discounts Are Often a Myth

Insurers frequently offer better deals to new customers than loyal ones. Don't assume your renewal quote is the best available. If a competitor offers meaningfully better value, switch — and don't feel guilty about it. Insurance is a commodity.

What to Do at Renewal

1. When your renewal arrives, compare quotes using Finder or Canstar.
2. If you find a cheaper equivalent policy, call your insurer and tell them. Ask them to match it.
3. If they don't match it, switch. The process takes 10 minutes online.
4. Check TopCashback for cashback on new policies before you sign up with the new insurer.

This process, repeated annually, can save the average Australian driver $200–$600 per year on car insurance.