How to Save Money on Car Insurance in Australia: 10 Tips

Car insurance premiums have increased sharply across Australia in recent years. Higher repair costs, inflation, supply-chain issues and more expensive vehicles have all contributed to rising insurance prices, leaving many drivers paying hundreds of dollars more each year than they expect.¹

The good news is there are practical ways to save money on car insurance in Australia without compromising on the level of cover that suits your needs. By understanding how premiums are calculated and reviewing your policy regularly, you may be able to reduce costs, avoid unnecessary extras, and make more informed financial decisions as a driver.

This guide explains 10 general strategies that may help you lower your car insurance costs, why premiums are rising, and how Credit24 may help you manage vehicle-related expenses if cash flow is tight.

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Why car insurance costs in Australia can be higher

Several factors are pushing premiums up nationwide:

• Inflation and repair costs: Parts, labour and vehicle technology are more expensive to repair than ever.²
• More expensive claims: Advanced safety features can increase repair bills even for minor accidents.
• The loyalty penalty: Some long-term customers may pay more than new customers for similar cover.³
• Complex pricing models: ASIC has highlighted that pricing can vary significantly between customers with similar risk profiles.⁴

These factors make it worth reviewing your policy regularly rather than renewing automatically.

How to save on car insurance: 10 proven ways

1. Shop around and compare insurers annually

One of the most common ways people try to save money on car insurance is by comparing providers before renewal.

Studies show the difference between the cheapest and most expensive comprehensive policies can be significant, even for similar levels of cover.⁵

Best practices for comparing insurers

• Compare like-for-like coverage
• Check excess amounts and exclusions
• Use independent comparison tools
• Get quotes 3–4 weeks before renewal

Even if you stay with the same insurer, comparing options may give you more confidence that your premium is competitive.

2. Increase your policy excess strategically

Raising your excess may reduce your premium, because you agree to pay more out-of-pocket if you need to make a claim.

Things to consider

• Only increase excess to an amount you could afford if needed
• Be aware of age or inexperienced driver excesses
• Avoid making small claims that could increase future premiums

This strategy may work best for people who have emergency savings set aside for unexpected expenses.

3. Take advantage of low-kilometre discounts

If you drive less than average, your insurer may consider you a lower risk.

Many insurers offer low-kilometre or “pay less if you drive less” discounts, including:

• AAMI
• APIA
• Budget Direct
• Coles
• Woolworths
• Australian Seniors

People who work from home, retirees, and households with multiple vehicles may benefit most from this option.

4. Secure multiple policy discounts

Bundling car insurance with home or contents insurance may provide access to multi-policy discounts.

However, bundling does not always mean the cheapest deal.

Smart approach

• Compare bundled pricing vs standalone policies
• Review bundles annually
• Avoid assuming convenience equals savings

Sometimes separate policies across different insurers may cost less overall.

5. Choose annual payment over monthly instalments

Paying monthly may feel easier to manage, but some insurers charge extra fees for instalment payments, which can increase the total cost.

If paying annually is difficult, you could consider:

• Using a dedicated savings account for insurance payments
• Setting up automated transfers using OSKO or your banking app
• Planning ahead using a budgeting method

Budgeting guide:
https://www.credit24.com.au/blog/how-to-do-a-budget

Some people also consider personal loans to spread large expenses into predictable repayments. If you explore this option, it’s important to compare total costs, interest rates, and ensure repayments fit your budget.

Credit24 personal loans may help eligible customers manage large annual insurance costs when cash flow is tight.

6. Leverage previous insurer information strategically

Some insurers offer targeted discounts depending on which insurer you are switching from. This competitive pricing can sometimes lead to noticeable savings.

When requesting quotes, ensure you disclose your current insurer accurately so the quote reflects the correct details.

7. Optimise driver restrictions and nominations

Limiting who can drive your vehicle may reduce your premium.

Options may include:

• Restricting drivers under 25
• Nominating specific drivers only
• Excluding high-risk drivers

Be cautious: if an unlisted driver has an accident, it may result in a higher excess or reduced claim benefits depending on the policy terms.

8. Improve vehicle security and storage

Where and how you store your car can affect your premium.

Potential ways to reduce risk include:

• Garage parking instead of street parking
• Installing alarms or immobilisers
• Using GPS tracking devices

Your postcode may also influence premiums, as some areas have higher theft or accident rates.

9. Maintain an excellent driving history

Your driving record is one of the biggest factors insurers consider.

Ways a good driving history may help include:

• Claim-free years increasing your no-claims bonus
• Defensive driving courses helping young drivers build safer habits
• Avoiding unnecessary claims that may increase future premiums

In some cases, paying for minor repairs yourself may be cheaper long-term than making a claim, but this depends on your policy and circumstances.

10. Review and optimise your coverage level

You don’t always need the same cover forever. Reviewing your level of cover may help ensure you are not paying for protection you no longer need.

Consider:

• Comprehensive vs third-party cover for older vehicles
• Removing unused extras (hire car, windscreen cover)
• Matching cover to your vehicle’s market value

Over-insuring a depreciated vehicle is a common way Australians may overspend on car insurance.

Special considerations for young drivers

Young drivers often face higher premiums because insurers assess them as higher risk.⁶

Ways young drivers may reduce costs include:

• Choosing vehicles with strong safety ratings and lower insurance groups
• Completing recognised defensive driving courses
• Building a no-claims history early
• Joining a family policy where appropriate

For under-25s, balancing cost and suitable coverage is especially important.

Key factors that affect car insurance pricing

Insurers typically assess:

• Age and driving experience
• Vehicle make, model and year
• Location and storage arrangements
• Claims history
• Usage patterns

Understanding these factors can improve your financial literacy and help you make more informed choices when buying or insuring a car.

If you're considering vehicle finance options, you may also find these useful:
https://www.credit24.com.au/blog/personal-loan-vs-car-loan
https://www.credit24.com.au/blog/used-car-financing-options

When to consider changing your coverage

It may be worth reviewing your car insurance:

• Every year at renewal
• After moving house
• After changing jobs or usage (e.g., commuting less)
• When your vehicle depreciates significantly

A premium increase that seems higher than expected can be a good prompt to compare insurers again.

How Credit24 can help with vehicle expenses

Car ownership costs go beyond insurance. Unexpected repairs, registration costs, or insurance premiums can put pressure on a household budget.

Credit24 may help eligible customers with:

• Personal loans for insurance premiums and repairs
• Vehicle-related expenses up to $10,000
• Predictable repayments that may support budgeting
• Emergency vehicle costs

Related reading:
https://www.credit24.com.au/car-loans
https://www.credit24.com.au/personal-loans
https://www.credit24.com.au/blog/personal-loan-vs-car-loan
https://www.credit24.com.au/blog/used-car-financing-options

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Final thoughts

Saving money on car insurance in Australia doesn’t necessarily mean sacrificing protection — it often comes down to reviewing your policy regularly, comparing options, and making sure your cover still matches your circumstances.

By shopping around, understanding pricing factors, and adjusting excess and cover levels carefully, you may be able to reduce unnecessary costs while maintaining suitable protection for your needs.

Sources

¹ Australian Bureau of Statistics – Insurance & Financial Services Inflation
https://www.abs.gov.au

² Insurance Council of Australia – Rising Claims Costs
https://insurancecouncil.com.au

³ ACCC – Loyalty Penalty in Insurance
https://www.accc.gov.au

⁴ ASIC – General Insurance Pricing Practices
https://asic.gov.au

⁵ CHOICE – Car Insurance Price Comparisons
https://www.choice.com.au

⁶ NSW Centre for Road Safety – Young Driver Risk Statistics
https://roadsafety.transport.nsw.gov.au

Disclaimer

IPF Digital Australia Pty Ltd, trading as Credit24, ABN 59 130 894 405. Australian Credit Licence 422839. The information in this article is general in nature and does not consider your objectives, financial situation, or needs. Lending criteria, fees, and charges apply. For product details, eligibility requirements, and full terms and conditions, visit www.credit24.com.au.