Putting a brake on your rising car insurance costs

Last updated on November 25th, 2021
  Written by 
Bill Tsouvalas
Bill Tsouvalas is the managing director and a key company spokesperson at Savvy. As a personal finance expert, he often shares his insights on a range of topics, being featured on leading news outlets including News Corp publications such as the Daily Telegraph and Herald Sun, Fairfax Media publications such as the Australian Financial Review, the Seven Network and more. Bill has over 15 years of experience working in the finance industry and founded Savvy in 2010 with a vision to provide affordable and accessible finance options to all Australians. He has built Savvy from a small asset finance brokerage into a financial comparison website which now attracts close to 2 million Aussies per year and was included in the BRW’s Fast 100 in 2015 as one of the fastest-growing companies in the country. He’s passionate about helping Australians make financially savvy decisions and reviews content across the brand to ensure its accuracy. You can follow Bill on LinkedIn.
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Car insurance is determined by many factors over which you have control to a point. By managing and planning better, you too can obtain discounts on your monthly car insurance.

Although wage price index, according to the Insurance Council of Australia, is above the increase of car insurance this has increased by 66% over the past 10 years. This means that car insurance is becoming unaffordable to many, especial generation X people who are burdened by loans, low wages, and high living costs.

Even with escalating insurance costs, cancelling your policy is not the ideal response. If you are in an accident you could lose a great deal of money. Instead, you need to understand your risk profile, thereafter working out where you can make changes to obtain discounts.

The risk factors the insurance companies use to determine your rate.

Your car insurance premium is dependent on various factors, which are seen as part of your risk profile. These factors can include:

  • Gender, with females gaining the benefit, and younger males subject to higher charges.
  • Age, in that anyone below 25 years of age will pay more for insurance, while there are discounts for those above 30. This is because the death rate for males aged 20 to 24 in car crashes is higher than for other age groups.
  • Marital status − married people are seen as less of a risk than single drivers.
  • Driver’s record is used. Your driver’s report indicates how many years you have been driving, as well as your accident history and all the offences you have collected.
  • Parking habits pertaining to where you live and where you park your car during the day and night. For instance, parking in a secure garage is much safer than street parking.
  • The vehicle itself, with a luxury or new car costing more to insure than a plainer or older model.

What can you do to reduce your monthly insurance costs?

Besides going for a new policy, one that makes use of tracking technology to monitor your driving, and if you are driving less than the average Australian driver who drives 14 000 kilometres a year, there are many steps you can take to obtain discounts.

Firstly, you can increase your security by adding a car alarm and immobilizers. You can also park your vehicle in a secure garage instead of out on the street.

Secondly, you could limit the number of people permitted to drive your car. You should especially not allow anyone below the age of 25 to drive your vehicle.

Thirdly, you can obtain a safe-driver discount if you have completed a defensive driving course.

Fourthly, it will be cheaper if you add your car insurance to your household insurance. In fact, you could get 10% or even more off your policies, if you make use of the same insurance company.

Fifthly, if you increase your excess, your monthly costs could be lower.

Lastly, if you have a no-claims history, you could mention this to your new insurer. You could have 20% taken off your insurance costs.

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This guide provides general information and does not consider your individual needs, finances or objectives. We do not make any recommendation or suggestion about which product is best for you based on your specific situation and we do not compare all companies in the market, or all products offered by all companies. It’s always important to consider whether professional financial, legal or taxation advice is appropriate for you before choosing or purchasing a financial product.

The content on our website is produced by experts in the field of finance and reviewed as part of our editorial guidelines. We endeavour to keep all information across our site updated with accurate information.

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