First time car insurance for over 25s

If you’re a new driver over the age of 25, and in the process of getting car insurance, chances are you’ll have discovered that traditional insurers consider you a high-risk group and quote your insurance rates accordingly.

While this may seem harsh, it happens because most insurers have no information on how well you drive.

Your lack of experience therefore becomes one of the main factors used to calculate your insurance rates.

Fortunately, there are various ways in which new drivers over the age of 25 can save money on car insurance in Australia.

How car insurance works in Australia

Every driver in Australia is expected to be covered by at least the most basic insurance cover. This is known as Compulsory Third Party (CTP) insurance, or green slip insurance in some states.

This form of insurance is not designed to provide any cover for damage to property.

Instead, it is intended to protect every person on the road from the potentially massive medical costs that can arise from involvement in a car accident.

However, any additional cover is not required by law, and you are free to choose your provider and how much cover you want.

Compulsory Third Party insurance

As discussed, CTP insurance ensures that anyone involved in an accident in Australia is covered for their medical expenses.

In the majority of Australian states, this is provided by a state insurer and charged along with your car registration fees when you register a car for the first time, or when you renew your car registration.

Residents of Queensland and New South Wales are able to shop around for their CTP insurance.

Third party property insurance

Third party property insurance is the most basic cover for damages to property that may occur in a car accident.

This form of insurance does not cover you for any damage to your own car in any scenario.

Instead you will be covered if you are found to be responsible for a car accident and find yourself facing expensive claims for damage to vehicles or property.

This is really the minimum level of cover you want to take before driving in Australia, otherwise you could face massively expensive civil claims if you cause an accident.

Third party property, theft & fire

If you want at least some cover for your own car, third party property, fire and theft insurance is the most basic insurance cover available.

This form of insurance provides you with standard third party property insurance, but also provides insurance cover in the event your car is stolen or damaged in a fire.

While this is preferable to not covering your car at all, be aware that if you damage your car in an accident, or it is written off, you will receive no compensation at all from the insurer.

Comprehensive insurance

Most new drivers will want to get comprehensive insurance cover, and you’ll be required to get this level of cover if you get finance for your vehicle from a financial institution.

Comprehensive insurance covers you for both third party damage claims and accident damage to your own vehicle, as well as fire, theft and some forms of weather damage.

Insurers will still require you to make a payment towards damages in the event you make a claim, and the amount you’ll pay in is known as the ‘excess’.

Comparing types of young driver car insurance in Australia

Type of Insurance Damage to your car Theft of your car or fire damage Damage to 3rd party property 3rd party injury or death
Compulsory Third Party (CTP)
Third party property
Third party property, fire & theft
Comprehensive

Average insurance rates were calculated by obtaining online insurance rates for 27-year-old male and female drivers in every Australian state and territory.

The four lowest premiums for each gender were used to calculate averages. Quotes reflected pricing on www.comparethemarket.com.au for November 2018.

The car used for quotations was a white 2018 Toyota Yaris 1.3 mpi five door hatchback with manual transmission and petrol engine. No additional accessories or factory/dealership options selected.

Car parked in a garage overnight. No existing accident or hail damage, and car financed by lease.

For all drivers estimated driving mileage was set to 6,000 km annually, and drivers indicated as having no prior claim history.

Identical residential addresses were used for each gender in the relevant state or territory.

Insurance rates for new drivers over 25

Insurance rates are based on a range of different factors, but a test case allows for some insight into the typical rates for new drivers.

The following table compares the average of the four cheapest insurance quotes for a male or female driver over the age of 25.

State Male Female
ACT 1732 1440
NSW 2594 2542
NT 1269 1427
QLD 1290 1269
SA 1258 1225
TAS 1753 1751
VIC 2596 2590
WA 1686 1641

How to get cheaper insurance for new drivers in Australia

Now that you know what your insurance options are, we can move onto assessing your options for getting cheap car insurance for first time drivers over 25.

1. Compare quotes

It’s easy to rush into an insurance agreement when you get car insurance for the first time, and even easier if signed insurance papers are the only thing holding you back from getting your hands on your first car.

However, one of the easiest ways to find cheap car insurance for 25 and over drivers is to run through some insurance comparisons to find the cheapest available rates.

2. Reduce your level of cover

This is one of the simplest ways to reduce your overall insurance costs. Taking one of the more basic insurance options we have discussed will save you money every month.

However, while you will make monthly savings, you could suffer a massive financial setback if you are involved in an accident and have to foot the bill for damage to your or someone else’s property or car.

This should therefore be the last resort for lowering your insurance costs.

3. Think before you buy a car

The type of car you drive is going to be the single largest factor in determining what you pay for insurance as a new driver over the age of 25.

While insurers don’t know how well you drive, they have very detailed statistical information on different car models, including accident rates, how likely they are to be stolen and how expensive they are to repair or replace.

To avoid paying more than you have to on a car, consider:

  • driving an affordable, mainstream entry level car while you are still new to driving
  • avoiding any after-service modifications to your car. It’s also a good idea not to make your car too customized even when choosing between pre-purchase add-ons
  • avoiding high performance cars or cars with large engine capacity.

3. Reduce the distances you drive

It’s a statistical fact that the more time you spend at the wheel, the more likely you are to have a car accident at some point.

This basic fact is recognized by most insurers, and as a result you can get cheaper car insurance by limiting how far you drive every month.

4. Increase your insurance excess

When you sign up for comprehensive car insurance you’ll typically have the option of choosing how much excess you will pay in the event of an accident.

If you choose a higher excess payment you will be rewarded with cheaper insurance rates.

While this is a very tempting way of reducing payments if you’re a careful driver, it’s a bad idea to raise your excess to the point where you’d struggle to pay it if you were in an accident, even if you will save money in the short term.

5. Use a telematics insurer

As we have mentioned, lack of a driving or claims track record is a major challenge faced by new drivers.

Fortunately, this has changed with the introduction of telematics insurance into Australia.

Telematics insurers are able to very rapidly build up a highly detailed picture of how well drivers at any level of experience drive.

This is done using cutting-edge telematics technology which is able to accurately track driving behaviour in real time.

Whereas a no-claim history takes years to build up, telematics insurers can get an extremely accurate idea of how well you drive by tracking your driving for a few weeks.

They can then use this to ensure you pay fair rates on your car insurance policy.

In Australia, UbiCar offers telematics insurance via its mobile app.

How it works:

What UbiCar customers say

Savings and benefits users now enjoy since switching to UbiCar*
Luana with savings

"My massive monthly savings
are fantastic for my family"

Luana - New South Wales
Jillian with savings amount

“UbiCar has motivated me to be a better,
safer and more considerate driver."

Jillian - South Australia
Luke with savings amount

“UbiCar doesn’t stereotype like other
insurance companies.“

Luke - New South Wales

*Savings are factual and based on comparison between the customer’s current Comprehensive Car Insurance policy with UbiCar as of December 2018 and their policy with their previous insurer. Premiums and savings may differ depending on individual circumstance.

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