Key Points
- Increasing your insurance excess is an easy way to reduce your premiums, but it will cost you more in the event of a claim.
- Insuring your car for its market value, rather than an agreed value, can be a cheaper option.
- Limiting the drivers of your vehicle to those 25 years and older can result in cheaper premiums.
- Shopping around and comparing insurance providers using Canstar's awards and ratings can help you find cheaper car insurance.
Car insurance is a great thing. When the worst happens, it's there to cover you financially, to either repair or replace your car. If you're fully covered that is.
If you want full, comprehensive car insurance, the premiums can add up. Plus, the nicer your car, the more it's going to cost to insure. But thankfully there are plenty of tips and tricks that can help you find cheaper car insurance. Or, at the very least, help you get a little discount to sweeten the deal.
Canstar runs you through some tips and tricks to cheaper car insurance:
Consider the coverage
If your car is worth $1000, and you're paying $500 a year in insurance, you're probably not getting the best value. While comprehensive policies with full coverage and all the bells and whistles are great, they are not necessarily suitable for everyone.
It may be worth going for a much cheaper third party car insurance policy instead.
→Related article: Which Car Insurance Is Right for You?
Take advantage of multi-vehicle (and policy) discounts
If you and your partner both have a car, you may be eligible for a multi-car discount if you insure both with the same insurer. Or, if you have more than one car on your own, the same applies.
Otherwise, most insurers offer multi-policy discounts. So by having your car, home, contents, or even health insurance with one provider, there are plenty of savings to be had.
Increase the excess
Your excess is a fixed fee you have to pay in order to access your insurance. Every time you need to make an insurance claim, you will have to pay this fixed amount.
The lower your excess, the less you have to pay each time you make a claim. But, unsurprisingly, a lower excess means higher premiums.
So in order to bring down your premiums, you can set a higher excess. Keep in mind that you need to pay this amount each time you make a claim. So don't set the excess so high that you are unable to afford it. Or so high that it makes making a claim not worth it.
Pay upfront
Most car insurance policies are for one year. At the end of the year, you can renew the policy, although the terms and costs may be different.
Instead of paying monthly (or fortnightly), you can receive a discount by paying for the entire year upfront.
Market value vs. agreed value
Most car insurance policies have two choices when it comes to calculating your car's worth: agreed value and market value.
Agreed value is when both you and your insurer agree on a fixed value. If you agree that your car is worth $3500, if it gets written off, you receive the exact amount. This provides certainty around how much you'll receive, but, it usually comes at a higher cost.
If you want to save on premiums, market value could be a better option. Market value takes into account the value of your car at the time of the accident. Think, what would it be worth on Trade Me?
This typically comes with lower premiums and can help you save. But, it also doesn't give you any certainty around how much you will receive should you lose your car.
Don't overdo your valuation
If you decide to go with agreed value car insurance, you and your insurer will agree on a price. You can, to some extent, bump up your car's value a little beyond what it's probably worth. This won't be drastic, as your insurer has to agree on the value, too. But it's certainly possible to evaluate your vehicle on the high-end of the spectrum. While this can seem appealing, the more a car is insured for, the more it costs to insure. So, you may actually be hurting your wallet.
On the other hand, you can evaluate your car for less than it's worth. This would bring down your premiums, but in the event of a total loss of your vehicle, you could find yourself short.
Limit who drives your car
Car insurance providers charge higher premiums for younger (and particularly male) drivers. By excluding anyone under 25 from using your car, you'll be able to save on premiums.
Drive safe
This really counts as general advice, because you should always drive safely. But car insurance providers offer no claims bonuses. So if you have your policy for a year and don't use it, you can renew it and receive a discount.
Additionally, past crashes or incidents can impact your premiums when applying for a new policy.
