11 tips to save money on your car insurance

How to save money on your car insurance

The golden rule for car insurance isn’t loyalty, it’s comparison; here’s how, with a little research and some practical changes, you can potentially shave hundreds off your annual car insurance bill.

1. Buy online

Put down the phone and head online; many insurance providers offer discounts if you buy your car insurance online rather than over the phone or in person. For example, some providers will offer a fixed dollar discount (such as $100 off), while others offer a percentage discount (such as 10% off)—though generally these types of offers only apply to the first year’s premium (so check the fine print).

2. Pay annually instead of monthly

Some providers will charge lower premiums if you pay your insurance annually, rather than in monthly instalments. While this might not be the most straightforward (or affordable) option for those who budget month to month, it could be worth doing if you’re able to afford the one-off payment. Canstar’s Group Manager, Research, Ratings & Product Data, Joshua Sale suggests that opting for annual payments can often save you 5-10% over the year.

Alternatively, you might want to consider going with a provider who lets you pay monthly at no extra cost. According to Canstar’s Research Team, about half of the providers in Canstar’s 2025 Car Insurance Star Ratings and Awards currently have this option.

3. Shop around

Mr. Sale suggests that shopping around and comparing your car insurance options is arguably the most impactful saving tip. Due to the competitive nature of insurance companies, your premium can change significantly year-on-year—even if you stay with the same insurer. Mr. Sale recommends to not just auto-renew your policy and instead compare your options and get quotes directly from both major and minor insurance providers.

You can do this by using Canstar’s comparison tables, which compare dozens of comprehensive car insurance policies based on both price and features. This can help you get a competitively-priced policy, while ensuring you have cover that suits your needs.

4. Plan ahead

It’s unsurprising that car insurance policies are priced based on risk factors, and while penalties for taking out a policy ‘last-minute’ aren’t explicitly advertised, planning ahead matters in this scenario. Mr. Sale suggests giving yourself several weeks to compare different quotes, as it can allow you to demonstrate a more organised approach, and crucially, gives you the power to find the most competitive rate without feeling like you’re being rushed.

5. Drive safely

“Your driving history is one of the most powerful factors in your premium” says Mr. Sale. And, while it’s good to be a safe driver regardless, some providers will reward you with a discount for doing so. A number of providers on Canstar’s database offer a ‘Safe Driver Discount’, ‘No Claims Bonus’ or ‘No Claims Discount’. This typically gives you a discount if you don’t claim on your insurance, with the discount increasing each year you don’t make a claim (up to a predetermined limit).

Providers also take into account the drivers listed on your policy and their varying ages and experience levels. Your premiums will often be more expensive if you have multiple drivers, or drivers that are younger or inexperienced listed on your policy. Limiting the amount of drivers on your policy can often help reduce your overall premiums, too. That being said, some providers do offer ‘Named Driver’ discounts if you name all the potential drivers of your vehicle on your policy. Be aware that with this discount, in the event that you need to make a claim for an unnamed driver, your excess will often be much higher.

6. Drive less

It turns out that driving your car less not only saves you on fuel costs—it can help you save on your premiums. If you drive less than a certain distance per year (usually 10,000 kilometres), some providers will offer you a discount on your premium, usually through a low kilometre policy. Your premiums may also be lower if you don’t drive during peak hour traffic.

Another option could be to choose a ‘pay as you drive’ policy. These policies cover you up to a certain distance and are generally cheaper than regular policies for people who don’t drive often. However, Mr. Sale warns that these policies aren’t always the cheaper option, which makes it important to understand exactly how much you intend to drive and compare your options.

7. Keep your car secure

Is your car parked in a locked garage or secure parking spot? Then, your premiums will typically be lower. This is due to insurers generally seeing your vehicle as less likely to be damaged, broken into or stolen and therefore you being less likely to make a claim. You may also get a discount if your car has security features such as an immobiliser, an alarm and/or satellite tracking, but this will vary between different insurance providers and not all of them offer these kinds of discounts.

8. Choose a higher excess

Your excess is the amount of money you contribute if you need to make a claim. The higher it is, the lower your premiums will generally be. Some providers 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. This could further reduce your premiums in exchange for higher out-of-pocket costs when it comes time to make a claim. Mr. Sale suggests making sure you choose an excess amount you could comfortably afford to pay if you needed to make a claim.

9. Insure your car for its market value

You can generally insure 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. This is compared to the ‘agreed value’, which is a set value that has been agreed on by you and your insurance provider. It will generally be cheaper to insure your car for its ‘market value’, although it may not provide as much certainty as to how much your car is insured for.

For comprehensive policies, you often have the choice between an ‘agreed value’ or ‘market value’ for your vehicle to be insured for. As most cars generally depreciate in value over time, ensure your ‘agreed value’ isn’t set too high, as this could inflate your premium unnecessarily. If you choose ‘market value’, the premium will typically be lower as the insurer’s liability decreases over time.

10. Choose your extras carefully

Simply put, your premiums will be more expensive if you add optional extras to your policy, such as windscreen cover, roadside assistance and rental car cover. Consider whether having these extras included in your policy are worthwhile for you. For example, you might want to look at how much it would cost to buy the add-on coverage separately rather than as part of your policy.

11. Consider bundling your policy with other products

Some providers offer a ‘multi-policy’ discount if you take out two separate types of policies with the one provider. For example, car insurance with home insurance. However, before taking the plunge and doubling down, it’s important to weigh up whether you would get better value and/or coverage by splitting up your policies across different providers. The same can be said for long-term loyalty discounts, which may not outweigh the savings another policy could present to you.

You can compare a range of insurance products with Canstar, such as home insurance, private health insurance and life insurance. Canstar compares and rates policies based on both price and features.

As well as the tips above, it’s often worth asking your insurance provider directly about whether they can offer you any additional discounts to help you save. It’s also important to read the policies’ Product Disclosure Statement (PDS) and Target Market Determination (TMD) before making any purchase decisions.

“Car insurance isn’t a ‘set and forget’ product”, says Mr. Sale. “Proactively reviewing your policy details, from who drives your car to how much it’s insured for, can unlock savings. Every detail can influence your premium, so ensure your policy accurately reflects your current situation.”