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

17/02/2026

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

Learn practical ways to reduce your car insurance premium in Australia by comparing policies, adjusting cover wisely, and avoiding common overpayment traps.

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

Car insurance premiums have increased in Australia in recent years. Factors such as higher repair costs, inflation, supply-chain pressures, and increasingly complex vehicle technology have contributed to higher insurance costs for many drivers.¹

However, there are practical steps that may help you manage the cost of car insurance while maintaining cover that suits your circumstances. Reviewing your policy regularly and understanding how insurers calculate premiums may help you identify opportunities to reduce unnecessary costs.

This guide explains 10 general strategies that may help lower your car insurance costs, why premiums can increase, and how reviewing financial options may help you manage vehicle-related expenses if cash flow is tight.

Learn more about Credit24:
https://www.credit24.com.au

Why Car Insurance Costs in Australia Can Be Higher

Several factors can influence insurance premiums across Australia:

Inflation and repair costs
Parts, labour and vehicle technology can increase the cost of repairs.²

More expensive claims
Modern safety features may increase repair costs, even for relatively minor accidents.

Customer pricing differences
Some reports have found that long-term customers may not always receive the most competitive pricing compared with new customers.³

Complex pricing models
Pricing structures can vary significantly between insurers and customers depending on risk factors and underwriting models.⁴

Because premiums can vary between insurers and over time, reviewing your policy periodically rather than renewing automatically may help ensure your cover remains appropriate for your needs.

How to Save on Car Insurance: 10 Strategies to Consider

1. Shop Around and Compare Insurers Annually

Comparing insurers before your renewal date may help you identify more competitive pricing.

Price differences between policies can occur even when coverage appears similar.⁵ Reviewing quotes from multiple providers may help you understand what options are available.

Best practices when comparing insurers

Compare similar levels of cover
Check policy exclusions and excess amounts
Use independent comparison tools where available
Request quotes several weeks before renewal

Even if you decide to stay with your current insurer, comparing policies may help you better understand how your premium compares with other options.

2. Increase Your Policy Excess Carefully

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

Things to consider

Only increase the excess to a level you could comfortably afford
Check whether additional excesses apply to young or inexperienced drivers
Review your policy terms before making changes

This strategy may be more suitable for people who have savings available to cover unexpected expenses.

3. Check for Low-Kilometre Discounts

If you drive less than average each year, some insurers may offer lower premiums.

Several insurers offer low-kilometre discounts or pricing options designed for drivers who use their vehicles less frequently.

This may be particularly relevant for people who:

Work from home
Drive mainly for local trips
Own multiple vehicles within a household

Eligibility and discount levels vary between insurers.

4. Consider Multi-Policy Discounts

Some insurers offer discounts if you hold multiple policies with the same provider, such as combining car insurance with home or contents insurance.

However, bundling policies does not always guarantee the lowest overall cost.

A helpful approach may include:

Comparing bundled policies with standalone policies
Reviewing bundle discounts annually
Comparing offers across different insurers

In some cases, separate policies with different insurers may provide better overall value.

5. Review Payment Options

Some insurers charge additional fees for monthly instalments, which can increase the total annual cost of a policy.

If paying annually is difficult, planning ahead may help. Options to consider include:

Setting aside funds regularly in a dedicated savings account
Using automated transfers through your banking app
Including insurance costs within your budgeting plan

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

Some consumers explore financing options to manage large expenses. If considering any credit product, it is important to compare interest rates, fees, and the total cost of borrowing, and ensure repayments fit comfortably within your budget.

6. Provide Accurate Information When Requesting Quotes

Insurers may calculate premiums based on a range of details, including driving history, vehicle information, and usage patterns.

Providing accurate information when requesting quotes may help ensure the quoted premium reflects your circumstances.

Incorrect or incomplete information may affect policy pricing or claim outcomes.

7. Review Driver Restrictions

Some insurers allow policyholders to limit who can drive their vehicle.

Options may include:

Restricting drivers under a certain age
Nominating specific drivers only
Applying higher excess levels for inexperienced drivers

Policy conditions vary, so it is important to understand how restrictions may affect claims.

8. Improve Vehicle Security and Storage

Vehicle security and storage arrangements can affect insurance premiums.

Potential ways to reduce risk include:

Parking your vehicle in a garage rather than on the street
Using approved alarms or immobilisers
Installing tracking devices where appropriate

Location and postcode can also influence premiums due to differences in accident and theft rates.

9. Maintain a Safe Driving History

Driving history is an important factor insurers consider when setting premiums.

Some insurers offer benefits for drivers with long claim-free histories, sometimes referred to as a no-claims bonus.

Maintaining safe driving habits and avoiding unnecessary claims may help support a positive insurance record over time.

10. Review Your Coverage Level Periodically

Your insurance needs may change over time as your vehicle depreciates or your circumstances change.

Reviewing your policy regularly may help ensure you are not paying for cover that no longer suits your situation.

Consider reviewing:

Comprehensive versus third-party cover for older vehicles
Optional extras such as hire-car cover or windscreen protection
The insured value of the vehicle

Adjusting cover levels carefully may help align your policy with the current value of your vehicle.

Special Considerations for Young Drivers

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

Ways young drivers may help manage costs include:

Choosing vehicles with strong safety ratings
Completing recognised defensive driving courses
Building a claim-free driving history
Joining a family policy where appropriate

Balancing suitable coverage with affordability is particularly important for younger drivers.

Key Factors That Affect Car Insurance Pricing

Insurers typically consider several factors when determining premiums, including:

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

Understanding these factors may help you make more informed decisions when comparing policies.

If you're considering vehicle finance options, you may also find these guides helpful:

Personal Loan vs Car Loan:
https://www.credit24.com.au/blog/personal-loan-vs-car-loan

Used Car Financing Options:
https://www.credit24.com.au/blog/used-car-financing-options

When to Review Your Car Insurance

It may be worth reviewing your car insurance policy in situations such as:

At each annual renewal
After moving house
If your driving habits change
When your vehicle depreciates significantly

A premium increase may also be a useful reminder to compare policies and review your coverage.

Managing Vehicle Expenses

Owning a vehicle can involve a range of costs, including insurance premiums, repairs, registration and maintenance.

If unexpected vehicle expenses arise, some consumers explore financial options to manage short-term costs. When considering any credit product, it is important to compare lenders, review fees and interest rates, and ensure repayments are affordable based on your financial situation.

Final Thoughts

Saving money on car insurance in Australia does not necessarily require reducing your level of protection. In many cases, reviewing your policy regularly, comparing insurers, and understanding how premiums are calculated may help you identify ways to manage insurance costs more effectively.

By comparing options and ensuring your coverage reflects your current needs, you may be able to reduce unnecessary expenses while maintaining suitable protection for your vehicle.

Sources

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

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

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

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

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

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:

https://www.credit24.com.au

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