How to Save on Car Insurance

Learn some key tips on how to save on your car insurance policy right here with Savvy.

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, updated on February 16th, 2024       

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Car Insurance Banner - Young couple smiling while sitting in their car

Car insurance is a vital investment for all drivers in Australia, providing financial protection in the event of covered incidents such as accidents, theft or other unforeseen circumstances. However, the cost of car insurance can sometimes be a burden on the budget.

The good news is that there are several savvy ways to save on car insurance without compromising on coverage. In Savvy’s comprehensive guide, you can explore various strategies to help you save money on your car insurance while still securing the protection you’re looking for.

Compare quotes from multiple insurers

One of the most effective ways to save on car insurance is simply to compare quotes from different insurance providers. Each insurer calculates premiums based on its own unique criteria, so rates can vary significantly. Utilising online comparison tools to receive multiple quotes side-by-side can allow you to choose the most competitive offer available which meets your needs with more confidence.

Choose the right coverage level

Selecting the appropriate coverage level is crucial to strike a balance between protection and affordability. While comprehensive coverage provides the most extensive protection, it might not always be necessary for older or low-value vehicles. Consider your car's age and value and your budget to decide on the coverage that suits you best.

Increase your excess

Opting for a higher excess can reduce your car insurance premium. Your car insurance excess is the amount you must pay out of pocket before your insurance coverage kicks in. By raising your excess, you assume more of the financial burden, but it can lead to substantial savings on your premiums.

Bundle multiple policies

Many insurance companies offer discounts when you bundle multiple insurance policies, such as home and contents and car insurance, with them. Bundling can result in significant savings and added convenience of managing multiple policies under one insurer.

Maintain a good driving record

A clean driving record is not only essential for road safety but also a key factor in securing lower insurance premiums. Insurers often reward safe drivers with discounts or lower rates, as they’re perceived to be less risky. By avoiding repeated small claims, you can potentially reap the longer-term savings of cheaper car insurance premiums.

Take advantage of discounts

Explore various discounts offered by insurance providers and take advantage of those you qualify for. Common discounts include multi-car discounts, loyalty rewards for long-term policyholders and offers for purchasing your policy online (though the latter may only be for the first year of premiums). Some insurers also offer discounts for safety features installed in your vehicle.

Pay annually instead of monthly

While it may be more convenient to pay car insurance premiums in monthly instalments, opting for an annual payment can lead to savings. Insurance companies often charge additional administrative fees for monthly payments, which can add up over a year, so paying in a lump sum can help you save overall.

Consider usage-based insurance if you don’t drive as much

Usage-based insurance allows insurers to tailor premiums based on your driving habits. This is known as pay as you drive car insurance, which offers coverage at a cheaper rate if you drive your car within a certain kilometre limit in 12 months (such as 15,000km). This may involve installing a telematics device in your car or using a mobile app which can provide data on your driving behaviour.

Review your policy annually

Life circumstances and driving needs can change over time, so it's essential to review your car insurance policy annually. As your car ages or your driving habits evolve, you may need to adjust your coverage to better suit your current situation and potentially save on premiums.

Take a defensive driving course

Completing a defensive driving course can demonstrate to insurers that you’re a responsible and skilled driver. In return, some providers offer discounts to policyholders who’ve completed approved defensive driving courses.

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Explore car insurance options by make

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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.

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