Seven Ways Australians Can Save on Their Car Insurance Bill in 2023

As the cost of living continues to soar, bills associated with owning a car, like car insurance, are becoming increasingly taxing on Australians.  

There are some genuinely easy ways to save though. Here are seven tips that take less than an hour to do and can save you hundreds or more over the course of a year. 

1. Compare policies

If you’re only to take away one tip, it’s this — make sure you shop around and compare car insurance quotes. It doesn’t take long to do, and it can save you hundreds of dollars.

For example, there was a difference of $1,456 between the cheapest and most expensive comprehensive car insurance policies when we conducted research for the recent Finder Awards. 

Make sure you compare policies every year before your car insurance renews. Unfortunately, loyalty doesn’t pay. A Finder survey of 933 drivers found that 55% of people have noticed an increase in their car insurance premiums over the last 12 months.

2. Raise your excess

The excess is the amount you need to pay when you make a car insurance claim. Every insurer has one. You can’t avoid it, except in a handful of circumstances — for example, if you add no excess windscreen damage cover to your policy.

The good news is that the excess can lower your car insurance premiums. 

You can do this by choosing a higher excess (most car insurers let you do this when you get a quote). The bigger the excess you select, the less your car insurance will cost. 

The catch? If you need to make a claim, you’ll have to pay more upfront. However, if you’re a safe and confident driver, it’s a really easy way to lower your monthly or annual car insurance premium.

3. Only pay for what you need

All comprehensive car insurance policies cover you for damage to your car as well as other people’s property. That’s standard. 

However, many go much further than this. Most comprehensive car insurance policies also automatically include cover for things like stolen personal items, a hire car if yours is stolen, and a new car replacement if yours is written off.

If you’re not interested in these benefits, it could be worth looking at a bare-bones comprehensive car insurance policy. Bingle, for example, is one of the cheapest providers on the market, largely because it covers the essentials (like damage to your car and others) and not much more.

Alternatively, it’s worth looking at your policy and seeing if you’re paying for any add-ons you don’t use. When you took out cover, did you add on no excess windscreen cover or a hire car benefit if you’re involved in an accident? You might be able to drop these benefits and get a cheaper policy.

Comprehensive vs third-party

You could also save a lot by taking out a third-party car insurance policy. Third-party policies cover damage to other people’s property. They don’t cover damage to your own car. Only comprehensive cover can do this.

Taking out third-party car insurance over comprehensive cover is a little risky. If your car got damaged, could you afford to repair or replace it? If not, it might be better to stick with comprehensive cover.

4. Restrict other drivers

Insurers including Budget Direct, Everyday, Commonwealth Bank, and St.George all let you restrict the age of the driver on the policy. 

If you know that nobody under the age of 25 is going to be driving your car, this is a good option for you. Younger and inexperienced drivers are more likely to be involved in a car accident. 

So if you declare that there are no drivers under 25, you will pay less for your car insurance.

5. Park your car in a safe area

If you can park your car in a safe place such as a garage or secure car park, your insurance provider will charge you a little less.

This is simply because you pose less of a risk to the insurer. It’s less likely to be damaged or stolen if it’s securely locked away.

6. Change how you pay your premiums

The majority of Australian car insurers will charge you less if you’re able to pay upfront for the entire year as opposed to monthly.

This can save you $100 or more in a year. 

Of course, this option isn’t ideal for everyone; paying 12 months of car insurance all at once isn’t cheap.

Another option is to look at pay-as-you-drive car insurance. These types of policies offer reduced annual fees if you drive less than a predetermined distance each year. 

Several big insurers, including Budget Direct and AAMI, offer this type of policy. Others, such as KOBA insurance, use real-time driving data to charge you a consistent per-kilometer rate. 

If you don’t use your car that much, say less than 15,000km in a year, this can be a really cost-effective option.

7. Look for discounts

Discounts are great if you’re strategic about how you use them. 

Most of the well-known car insurers offer discounts for the first year to incentivize you to sign up. Some give you up to 15% off. 

However, after the first year, don’t be surprised if they increase your premiums significantly to offset the first-year discount.

If they do, switch. There’s almost certainly another insurer out there offering a sign-up discount.

As mentioned earlier, loyalty doesn’t pay. Yes, no-claims discounts can save you some money, but it’s usually not enough to justify sticking with the same insurer year in, year out.

Fortunately, comparing and switching car insurance is a lot easier than it used to be. Set aside 30 minutes to an hour once a year, get a handful of quotes, and see who is offering the best deal.

Gary Ross Hunter is an editor at Finder, specialising in insurance. He’s been writing about life, travel, home, car, pet and health insurance for over 5 years, has pored over hundreds of product disclosure statements and published more than 700 insurance articles. Gary has written articles for Yahoo Finance, Real Insurance and Soho, and regularly appears as an insurance expert in publications including The Sydney Morning Herald, news.com.au, Herald Sun, The Telegraph, Explore Travel and Escape.