The average salary in Australia is $81 947 per annum. The cost of an average car is $27,994. This expense may consume a high proportion of one’s spending money. When other living costs and debts are taken into account, many people may opt not to buy a car. However, they may still occasionally need the use of a car.
Normal insurance for a vehicle extends for a period of 12 months, however, temporary insurance for vehicles may be for a week, a month, or even six months. The various options for temporary insurance for a vehicle are to pay premiums monthly, adding a driver to a policy, renting a car, or for making use of a pay-as-you-drive car insurance policy.
Various options to give you temporary insurance for a vehicle
If you are only going to use a car for a few months, or your policy is going to end and you do not wish to renew it before you leave for overseas, for instance, temporary insurance for a vehicle could be useful. However, do note that if you own a car, irrespective how little use you may make of the car, you will still need to have compulsory third-party insurance.
As mentioned above, you can obtain temporary insurance for your vehicle by paying premiums monthly, adding a driver to a policy, renting a car, or making use of a pay-as-you-drive car insurance policy. Each of these options has its own benefits and drawbacks. You need to weigh these differences up to gauge which will work best for your needs.
You may want guidance on why you need the cover, for how long, and what type of car insurance to take out.
Paying premiums monthly
This approach means taking out a normal 12-month policy, thereafter opting to pay the premiums monthly. You may then cancel the policy any time before the policy ends. However, you could have to pay a cancellation fee of about $40.
Adding a driver to a policy
To save taking out a new policy, you can simply add to your car-owner’s policy the name of anyone designated to drive your vehicle. The implication is that your monthly premium may increase, based on the additional driver’s gender, age, driving history, and parking place of the vehicle. For example, if the driver is younger than 25 years, you will have to pay an excess ranging from $350 to $780 in addition to the existing premium.
Fronting is an illegal practice in which, for instance, a driver below the age of 25 uses an older person’s name to obtain cheaper premiums. Therefore those opting for adding on a name must be aware of the need for transparency.
Rent a car
This is an expensive option, however the easiest and most flexible. Hand back the vehicle after you have finished using it, no strings attached.
With this type of policy, you pay for the distance you drive, even though it is still a comprehensive car insurance policy. The price of this type of insurance normally has a minimum premium or price floor.