Having insurance on your car is always a good idea. However, it is also one of the major monthly expenses associated with car ownership, and can limit your choice of vehicles when you’re thinking of buying a car. The good news is that it is possible to reduce monthly insurance premiums by exploring personalised insurance products and taking into consideration some of the factors car insurance companies use to calculate premiums.
Here are nine ways to get a cheaper insurance premium in Australia.
Get fairer car insurance. Based on how you drive
1. Avoid high performance vehicles
Vehicles with more powerful engines that offer enhanced performance attract higher insurance premiums. As far as the insurance industry is concerned, drivers of these vehicles are more likely to test their limits and come unstuck doing so. A good rule of thumb is that if a car is prohibited under your local P plate laws, it is also likely to attract a higher insurance premium.
2. Get a light coloured vehicle
Insurance companies tend to offer lower premiums on light coloured vehicles. This is most likely due to the fact that white and light coloured vehicles are more visible in all light conditions, which reduces their risk of involvement in various types of accidents.
3. Park your car in a secure area
Where you park your car at home and at work will affect your insurance premium. Typically you’ll get the best premiums when your car is parked under cover in a secure area in a good neighbourhood. Cars that are parked on the street at day or night are at a higher risk of theft, vandalism and hail damage.
4. Short distance driver? Get pay as you drive insurance
Pay as you drive insurance products are designed to reward people who don’t rack up a lot of mileage on a month-to-month basis. So if you mostly drive in your own neighbourhood, or work or study close to your home, you may find some good savings on offer with this insurance option.
5. Insure the car’s market value
You have the option of insuring your car for its retail value or its market value. Choosing the latter option means that your insurer will take the age, mileage and condition of your vehicle into account if it is stolen or written off in an accident. If you want to be covered for a brand new car of the same make and model you’ll need to insure your vehicle at its retail value, and pay extra.
6. Increase your excess
The more you’re prepared to pay as an insurance excess (the amount you are liable for in any claim event), the less you’ll be charged in monthly insurance fees. It’s best to avoid extremes here. Keep your excess within an amount you can reasonably afford in the event of a claim, but don’t sacrifice lower monthly premiums to try get the lowest excess possible on a possible future claim.
7. Go for usage based insurance
This is a great option if you’re a good driver in a high risk demographic such as young drivers. Usage based insurance will price your premium on how you drive, rather than relying on historical driving patterns of people you’ve never met who happened to be your age when they made their claims. Insurers like UbiCarmake usage based insurance as easy as possible – you can start scoring your driving just by installing a free app on your phone.
8. Stay up to date with the latest tech
Cars equipped with the latest safety or fuel efficiency features can qualify for reduced insurance premiums. Safety advances like autonomous braking can significantly reduce your risk of involvement in an accident, and insurers are more than happy to reward your for embracing this kind of technology.
9. Compare insurance
The insurance industry is highly competitive. Take the time to compare the premiums on offer. Chances are you’ll find a significant discount on your first quote if you’re prepared to get competing quotes from other insurance companies. To ensure you continue getting the most affordable cover do an insurance comparison every year.