September 23, 2022
  • September 23, 2022

How to save on car insurance

By on August 15, 2022 0

Like death and taxes, paying for auto insurance is one of those unavoidable things in life that is hard to escape. So whether you just buy CTP insurance or comprehensive insurance, it’s worth trying to save money on your insurance costs.

There are a multitude of ways car owners can look to lower the cost of their auto insurance, regardless of their history. Let’s explore some of the options available to Australian drivers to help lower the premiums they pay on car insurance.

5 ways to save on car insurance

Insurers often offer discounts or lower premiums to drivers who pay for their insurance in one annual payment, as opposed to a monthly installment. One of the most common ways to get a discount on your car insurance is to choose to pay this one annual payment, instead of splitting it into monthly installments.

Paying a large sum all at once can be a significant upfront cost, which is why many drivers choose smaller monthly repayments. However, if the insurer charges you more than 12 months in higher monthly reimbursements, it may not be worth it.

  • Consider paying a higher deductible

If you have the funds available, one option to consider that can reduce your insurance costs is to opt for a policy in which you pay a higher deductible. The excess is the amount of an insurance claim that you will pay for yourself. Since a higher deductible ultimately saves insurers money, if you choose a policy with a higher deductible, you may pay a lower premium.

Also, when you make an insurance claim that your insurer pays you, it usually increases your premium. When it comes time to renew your policy, you may find that your premium is higher, even for small claims that are not your fault. But if you pay a higher deductible, you’re likely to pay lower claims yourself. By not making small claims to your insurer, it is likely that your premiums will not increase.

Insurers may offer discounts to drivers based on the average mileage a vehicle travels each year. For example, if your vehicle averages 5,000 km or less per year, you may receive a discount from your insurer or be able to negotiate a lower premium. This may not be possible if you drive frequently for work or for long distances, but if you live somewhere with good public transport infrastructure, it might be worth considering.

If your insurance policy offers competitive extras, such as roadside assistance, that you don’t think you really need or never use, it might be worth considering removing those extras to lower your premium. Being able to choose your own policy and modify it to suit your lifestyle and budget, while ensuring you’re covered in the event of an accident or theft, can help keep your costs down.

When it comes time to renew your policy, it can be tempting to “set and forget” your insurance and stick with the same provider – after all, insurance can be a frustrating administrative task. However, even if your policy was the most competitive on the market when you first signed up, that doesn’t mean it still lasts 12 months.

Insurers often offer reduced or more competitive premiums to new customers as an incentive to sign up. And unlike a mortgage which requires time, money and paperwork to switch providers, you can simply choose not to renew your insurance with the same provider and switch to a new one.

Comparing your options with easy-to-use comparison charts is one way drivers can find a policy that meets their needs and fits their budget.