How much does car insurance cost?

A level of car insurance is an unavoidable expense for most Australian households, but the cost can vary massively depending on your personal circumstances, the level of cover you get and, of course, which insurance provider you choose. So you might be wondering, how much does car insurance cost on average in Australia?

What’s the average cost of comprehensive car insurance in Australia?

According to Canstar’s Research Team, the average cost of comprehensive car insurance in Australia is $2,550 for females under 25, $2,858 for males under 25, $2,056 for ages 25-29 years, $1,529 for ages 30 to 49 years and $1,183 for ages over 50 years.

The average car insurance cost can also differ depending on which state or territory you reside in. The table below shows the average cost of comprehensive car insurance premiums in the different states and territories in Australia and how they’ve changed compared to last year. These average premiums are based on Canstar’s most recent Comprehensive Car Insurance Star Ratings release.

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Source: www.canstar.com.au – 6/06/2024. Based on comprehensive car insurance policies rated in Canstar’s 2024 Car Insurance Star Ratings (June 2024). Premiums include quotes for both new and used cars for a range of scenarios, with a state-specific target excess ranging from $800 to $1,000. Average Percent Changes since 2023 based on a sample of quotes across multiple providers and scenarios, that were undertaken to ensure consistency across the year.

As the table shows, all states and territories on average saw an increase in the price of car insurance this year—some as large as 40%. This makes shopping around and comparing car insurance policies an important thing to consider.

What affects the cost of car insurance?

How much an individual driver’s car insurance costs can depend on a wide range of factors. When applying for cover, the insurance provider will ask you questions to help calculate the level of risk involved in insuring your vehicle. Based on your answers, the insurer will provide a quote specific to your situation and this can vary significantly from driver to driver.

Here are some of the factors providers typically take into account:

The level of cover you choose

Generally, a policy with a greater level of cover will cost more. For example, a comprehensive policy will typically be more expensive than a Third Party Property Damage policy, as the provider is agreeing to cover you for a wider range of risks. If you choose to add optional coverage to your policy, such as roadside assistance, windscreen replacement or rental car use, this will usually also add to the overall cost of the policy.

Driver’s age and gender

On average, as Canstar’s data above shows, comprehensive car insurance costs more for younger drivers than older drivers. Drivers under 25 years of age pay the highest premiums on average, and among this cohort of drivers, male drivers pay more than female drivers. According to data from the Federal Government’s Department of Infrastructure, Transport, Regional Development, Communications and the Arts, incidences of male driver fatalities occurred three times more than female driver fatalities over the last 12 months. This difference is fairly consistent between the two genders throughout the past five years and contributes to male drivers being considered bigger risks to insurance providers—and higher risks often result in higher premiums.

To give you a broader idea, we’re put together some standardised assumptions with a target excess of $900-$1,100 to see how car insurance premiums can differ between genders.

Average Comprehensive Car Insurance Cost by Gender

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Source: www.canstar.com.au – 24/03/2025. Based on comprehensive cover for QLD based, 39 year old men and women with the same quoting assumptions (e.g. annuals kilometres driven, full licence, day and night garage parking etc.).

As you can see on average there’s very little difference in car insurance costs for 39 year old men and women, especially when compared to under-25 men and women. We found that some providers charged more for women (as much as $23 extra per year), whereas others charged more for men (as much as $33 extra per year).

It’s important to note, however, that these figures don’t necessarily represent the market, as age can play a significant part in how providers determine the price of their premiums for men and women. Generally speaking, when it comes to car insurance, younger men are considered more risky than younger women, whereas older men are considered less risky than older women. It’s more than likely that providers have different ages in mind when determining when one gender becomes more/less risky to insure than the other.

The vehicle being insured

Car insurance providers factor in various characteristics of the vehicle being insured when calculating premiums, such as its age, make and model, security features, and whether it has any modifications. Generally speaking, the greater the risk that the vehicle will be involved in an accident or stolen and the more costly it will be to repair or replace, the higher the premium will be.

Where you live

Providers may also charge higher premiums to drivers who live in areas with high crime rates or where there is an increased risk of extreme weather events. If your car is parked securely at night, such as in a locked garage, your provider may reflect this by reducing your premiums.

Your driving habits

When taking out car insurance, you may be asked to estimate how many kilometres you will drive per year. Typically, the more you drive, the higher the risk that you will be involved in an accident, and the more wear and tear on your car, which could affect your premiums. In addition, if you use your vehicle for commercial purposes as well as personal use, your provider may reflect this in the amount it charges to insure you, or it could apply other terms and conditions on your cover. If you don’t drive very often or very far, you could also consider a low kilometre or pay as you drive car insurance policy.

Your excess

A car insurance excess is the amount that you will need to pay to your provider towards the cost of repairing or replacing your car if you need to make a claim. Some car insurance providers allow policyholders to choose from a range of excess amounts and, generally, the higher the excess you choose, the cheaper your premiums will be. Remember though, you will face higher costs at claim time if you take this approach.

Your driving record

Providers may charge lower car insurance premiums to experienced drivers who have not made insurance claims in the past or have any violations or offences on record. This is sometimes referred to as a ‘no-claim bonus’ or ‘good driver discount’.

The car insurance provider you choose

It can pay to shop around and compare a variety of insurance providers, as the premiums you’re quoted can vary significantly. As an example, the Canstar Research Team has gathered figures from Canstar’s 2024 Comprehensive Car Insurance Star Ratings to show just how much you could save with a 5-Star Rated policy.

Average Annual Comprehensive Car Insurance Premiums by Consumer Profile

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Source: www.canstar.com.au – 06/06/2024. Based on comprehensive car insurance policies rated in Canstar’s 2024 Car Insurance Star Ratings (June 2024). Premiums include quotes for both new and used cars for a range of scenarios, with a state-specific target excess ranging from $800 to $1,000.

As the table shows, by switching to a 5-Star rated insurer, you could save at least $345 a year on the cost of comprehensive car insurance. If you’re weighing up a range of providers, make sure the level of cover is equivalent and you’re not inadvertently paying less for reduced protection. You might also consider sign up offers for car insurance, making sure that the sign up deal or offer means you’ll still be getting adequate coverage and value for your money.

How can you save on the cost of car insurance?

If you feel like you’re paying too much on car insurance costs, here are some quick tips to consider that may help you save on your premiums.

• Shop around: Avoid the temptation to auto renew your car insurance without checking if you could get a better deal elsewhere.

• Look online: Some providers offer a discount if you take out your car insurance policy online, instead of over the phone.

• Choose a higher excess: But remember to budget for the higher costs if you need to make a claim.

• Pay premiums annually: If your budget allows, some providers give customers a discount if they pay the full year’s premium upfront, rather than in monthly instalments.

• Prioritise safety and security: You may be able to keep premiums low by taking steps to keep your car secure, such as through additional security features (i.e. car immobilisers and lockable garages). Keep in mind though that some costly car modifications can have the opposite effect, as they can increase repair costs for the provider if you have an accident. Driving safely on the road may also help you to maintain a clean claims record, which could help you avoid future premium hikes.

• If you need it, ask for support from your car insurance provider: If you’re experiencing financial hardship, it could be worth checking whether your provider can offer any temporary relief.

Cover image source: Ground Picture/Shutterstock.com.com