Author: Tamika Seeto
Comprehensive car insurance isn’t cheap. And if you’re on a reduced income, working from home or driving less than usual at the moment, this cost may seem particularly expensive. Here are 10 simple tips that could save money on your car insurance.
10 ways to save money on your car insurance
1. Buy online
Many car insurers offer discounts if you buy your insurance online rather than in person, as it generally costs them less to sell their policies this way. Some insurers offer a fixed dollar discount (such as $100 off), while others offer a percentage discount (such as 10% off your first year’s premium).
2. Choose a higher excess
Your excess is the amount of money you pay if you need to make a claim. The higher it is, the lower your premiums will generally be. Some insurers will let you change your standard excess level to make it higher or lower, while others will let you add a voluntary excess on top of your standard excess, which could further reduce your premiums in exchange for higher out-of-pocket costs come claim time. Increasing your excess won’t be for everyone, though, and you should weigh up whether you can afford to pay a higher excess amount if you do need to make a claim.
3. Pay annually instead of monthly
Some insurers charge lower premiums if you pay your insurance annually, rather than in monthly instalments. While this might not be the most straightforward option for those of us who budget month to month, it could be worth doing if you can afford the one-off payment.
4. Shop around
It’s a good idea to compare your car insurance options and see if you could get a better deal. Canstar compares car insurance providers across categories including price, customer service and features. This can help ensure you can arrange the right cover for your car-driving needs.
Save money on your car insurance: compare with Canstar
To help you find the best car insurance, every year Canstar surveys car insurance customers and asks them to rate their providers across categories including value for money and customer service. Here is a snapshot of our latest Insurance Star Ratings:
5. Keep your car secure
If your car is parked in a garage rather than out on the street, your premiums will typically be lower, because insurers may see you as less likely to make a claim.
6. Drive safely
While it always pays to be a safe driver, some insurers will also reward you with a discount for doing so, in the form of a no-claims bonus or discount. This typically gives you a discount if you don’t claim on your insurance, and the discount will increase each year you don’t claim (up to a limit).
7. Drive less
You could also save by driving your car less. This may be more achievable at the moment, with many of us still working from home and going out less than usual. If you drive less than a certain distance per year (usually 10,000 kilometres), some insurers will offer you a discount on your premium.
8. Consider bundling your policy with other products (if it makes sense)
Some insurers also offer multi-policy discounts. These are discounts when you take out more than one type of policy with a single insurer. For example, car insurance with home insurance. However, before taking the plunge, it’s important to consider whether you’d get better value and/or coverage by splitting up your policies across different insurers.
9. Insure your car for its market value
You can generally cover your car for either its market value or agreed value. The market value is how much your car would be worth on the open market at the time of a car insurance claim. It takes into account factors such as the car’s make, model, condition and mileage, so it can change over time.
Agreed value is a set value that has been agreed on by you and your insurer. It will generally be cheaper to insure your car for its market value, although it may not provide as much certainty as an agreed, fixed price.
10. Choose your extras carefully
Your premiums will also be more expensive if you add optional extras to your policy, such as windscreen cover, roadside assistance and hire car cover. Consider whether having extras is worthwhile for you. For example, you might want to look at how much it would cost you to buy the add-on coverage separately rather than as part of your policy.
As well as the above tips, it’s also worth asking your insurer directly whether they can offer you any additional discounts to help you save.