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.

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 $2,184 for females under 25, $2,437 for males under 25, $1,733 for ages 25-29 years, $1,312 for ages 30 to 49 years and $1,006 for ages over 50 years.

For even more detail, the data below show the average cost of comprehensive car insurance premiums in the different states and territories in Australia, broken down by various driver profiles. These average premiums are based on Canstar’s most recent Comprehensive Car Insurance Star Ratings release.

What affects the cost of car insurance?

How much an individual driver pays for their car insurance 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 provider 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 policy, as the provider is agreeing to cover you for a wider range of risks. If you choose to add optional extra cover to your policy, such as roadside assistance, this will usually also add the cost of the policy.

Driver’s age and gender

As Canstar’s data above shows, younger drivers on average pay more in comprehensive premiums 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 females.  According to data from the Bureau of Infrastructure and Transport Research Economics, 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.

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 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 may 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 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 reflex this in the amount it charges to insure you, or apply other terms and conditions on your cover. If you don’t drive very often or very far, you could also consider pay as you drive car insurance.

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 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 that 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 2023 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 Profile

5-Star Rated Products vs Market Average

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Source: Prepared on 15/06/2023. Based on comprehensive car insurance policies rated in Canstar’s 2023 Car Insurance Star Ratings. Premiums include quotes for both new and used cars for a range of scenarios, with a state-specific target excess ranging from $600 to $750.

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 consider sign up offers for car insurance, factoring in if the sign up offer means you’ll be getting a better deal overall.

How can you save on the cost of car insurance?

If you feel like you’re paying too much on car insurance, 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 additional security features. 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