What are the cheapest cars to insure in Australia?

As a driver, it’s important to know that your car – and potentially the cars of any other drivers involved – are covered in the event of an accident. That’s why car insurance is often a key consideration for many Aussies. The price of car insurance premiums can vary due to a number of factors, including the type of cover you take out (such as comprehensive cover, third party fire and theft or third party property damage), as well as the make and model of the car you drive.

So the question may be on your mind – what are the cheapest cars to insure in Australia? The answer is not as simple as you might think. Why? Car insurance premiums are not based purely on the type and age of a vehicle – who drives the vehicle and how its used are also important factors.

What impacts car insurance premium prices?

The cost of your car insurance is often as much about you and the other drivers listed on your policy, as it is about the vehicle itself. Car insurance providers in Australia have ratings systems that calculate premiums according to hundreds of factors. Many of these factors are the details you enter when you complete an online quote. They can include:

• Age of the driver(s) listed on the policy.

• Gender of the driver(s).

• Claims history of the driver(s).

• Your car’s make, model and age.

• Your car’s safety rating.

• Where you park your car, including your suburb and where it’s parked overnight.

• The value of your car.

• The costs relating to replacing car parts and making repairs.

Some of these factors may also affect the insurance excess you have to pay if you need to make a claim. For example, as the Australian Government’s Moneysmart website says, if a young driver was involved in an accident while driving your car your insurer may charge you a higher excess than if the person involved was 25 or older.

Car insurance premiums – your driver/s

Men are more likely to be involved in road accidents than women, states AAMI’s Crash Index. This is why men usually pay higher premiums than women for car insurance. Generally, drivers under the age of 25 also pay higher premiums and/or age specific excesses, due to their limited driving history.

If you share your car with other drivers, that can also affect a provider’s perception of how risky you are to insure. The more hands on the steering wheel, especially with varying levels of experience, the greater the potential for something to go wrong on the road, at least in many provider’s eyes.

When you list other drivers on your policy, their personal factors can become part of the premium calculation too – their age, driving history, claims history and so on. That’s why it’s important to consider who you are sharing your vehicle with.

Car insurance premiums – your car

The area you live in (and its general crime rate), as well as where you park your car at night can also be a factor that influences how much you pay in car insurance premiums. This is due to cars often costing tens of thousands of dollars to replace or repair. That being said, if you are able to secure your car in a locked garage or avoid parking on the street, you may in turn see a reduction in your premiums. Comprehensive and third party fire and theft cover provide coverage if your car is stolen or damaged by thieves.

Another big factor is the safety of your car. If your car has a higher safety rating (as determined by ANCAP for new cars and UCSR for used cars), it and its passengers are seen as less likely to be involved in a car accident, or more likely to get through an accident with little damage due to the vehicle’s safety features. This means your provider is less likely to have to make big payouts for car repairs/replacement and may be more willing to insure the car for a lower premium, compared to ‘less safe’ models.

On the topic of car repair costs, some cars have parts that are more challenging to source (and therefore more costly) due to factors such as their availability or the supplier’s geographic location. Some parts are more expensive to repair or replace due to their complexity, such as those for specialty cars. The age of the car can also play a factor; for example, vintage or classic cars can be more expensive to fix. The colour of your vehicle and if you’ve made any modifications to it may also impact your insurance premiums.

The market value or agreed value of your car is another factor that contributes to the cost of car insurance premiums. Some insurers will give you the option to negotiate a car’s agreed value, but this isn’t a common option for most policies. To help decide whether to insure your car for its market or agreed value, you may want to do some research or obtain a few quotes and compare car insurance providers to see how choosing either could affect your premium.

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Car insurance budget tips

If you want to manage your budget, you can look at areas where you can potentially save on car insurance. These could include increasing your excess to lower your premium, settling with your insurer on a lower agreed value than the higher market value of your car, or considering what features you really need in your policy and choosing a more basic policy to suit.

Also, many insurers offer car insurance deals and discounts that can reduce the price of your premium, sometimes by hundreds of dollars a year.

Depending on the provider and policy you choose, these discounts could include:

• No-claims and safe driver discounts – where you keep a safe driving record and have not made a claim in several years.

• Paying annually instead of monthly – where you pay your premium in full at the beginning of each year of your policy.

• Named driver discounts – where you name all the drivers of your vehicle on your policy.

• Multi-vehicle policies – where you insure more than one vehicle with the same insurance provider.

• Multi-policy discount – where you have multiple different types of insurance policies (like home insurance and car insurance) with the same provider.

• Online deals and discounts – where you quote and buy a new policy online.

• Pay as you drive policies – receive lower premiums for driving your car less throughout the year (typically maximum kilometre limits of 10,000km-15,000km apply).

Some providers offer roadside assistance, windscreen replacement and rental car usage as add-on features to your policy, usually in exchange for an additional fee. Including these features can sometimes be cheaper than sourcing your insurance from one company and coverage for these features from another, so it could be worth comparing your options in this regard.

Obtaining a car insurance policy that is tailored to your individual circumstances is arguably easier than ever these days, thanks to the internet. Comparison sites, like Canstar, can make weighing up one provider with another a simpler process. Insurance providers also have much more detailed and clearly worded websites of their own these days, as they understand that the majority of people shop around online.

Plus, there are potentially more ways to save than before, including with sign-up deals, as insurance companies strive to differentiate their products. It’s a good idea to do your research to work out what policies may suit your needs and how much they are likely to cost you.

What are the cheapest cars to insure in 2024?

The cheapest cars to insure differ depending on the demographics and lifestyle circumstances of the driver/s, as well as the car itself. However, what we can say is that the safer the car, the cheaper the insurance premium is likely to be – before all the other factors come into play, of course.

The car insurance provider, Youi Insurance, used their own car insurance by make and model pages to generate a list of what might be some of the top 10 cheapest new cars to insure:

Top 10 cheapest new cars to insure in 2024

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Source: Youi Insurance – based on models available to purchase new in Australia as at October 2023.

There is no current listing for cheapest used cars to insure, but it would likely be influenced by the factors mentioned throughout this article.

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