How much does car insurance cost?

SEAN CALLERY
Deputy Editor · 6 August 2021
Canstar reveals the average annual premiums for comprehensive car insurance policies in different parts of Australia. Are you paying more than the average driver in your state?

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 insurer you choose. In this article, we break down:

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

The tables below show the average cost of comprehensive car insurance premiums in the different states in Australia, broken down by various driver profiles. These average premiums are based on Canstar’s most recent Comprehensive Car Insurance Star Ratings.

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New South Wales

Profile Average premium
Under 25 female $2,254
Under 25 male $2,505
25 to 29 $1,681
30 to 49 $1,276
Over 50 $991
Family with
young driver
$2,329

Queensland

Profile Average premium
Under 25 female $1,537
Under 25 male $1,724
25 to 29 $1,177
30 to 49 $908
Over 50 $718
Family with
young driver
$1,587

South Australia

Profile Average premium
Under 25 female $1,578
Under 25 male $1,780
25 to 29 $1,185
30 to 49 $904
Over 50 $705
Family with
young driver
$1,666

Tasmania

Profile Average premium
Under 25 female $1,444
Under 25 male $1,627
25 to 29 $1,071
30 to 49 $814
Over 50 $647
Family with
young driver
$1,466

Victoria

Profile Average premium
Under 25 female $2,248
Under 25 male $2,504
25 to 29 $1,620
30 to 49 $1,243
Over 50 $953
Family with
young driver
$2,112

Western Australia

Profile Average premium
Under 25 female $1,409
Under 25 male $1,583
25 to 29 $1,064
30 to 49 $815
Over 50 $634
Family with
young driver
$1,491

Source: www.canstar.com.au. Based on comprehensive car insurance policies rated in Canstar’s 2021 Comprehensive 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.

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Some of the top car insurance policies by Star Rating

If you’re in the market for a car insurance policy, check out the table below which includes some of the car insurance policies on Canstar’s database for each of a 25-29, 30-39 and 40-49 year old male driver in NSW without an extra driver under 25 years old, with links to providers’ websites. The results are sorted by Star Rating, then by provider name (alphabetically). Check upfront with your provider and read the PDS to confirm whether a particular policy meets your needs before deciding to commit to it.

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 insurer will ask you questions to help it 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 insurers 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 insurer 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 to 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.

The vehicle being insured

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

Where you live

Insurers 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 insurer may reflect this by reducing your premiums.

Your driving habits

When taking out insurance, you will be asked to estimate how many kilometres you will drive per year. The more you drive, typically the higher the risk that you will be involved in an accident, which could affect your premiums. In addition, if you use your vehicle for commercial purposes as well as personal use, your insurer may reflect this in the amount it charges to insure you, or apply other terms and conditions on your cover.

Your excess

A car insurance excess is the amount that you will need to pay to your insurer towards the cost of repairing or replacing your car if you make a claim. Some insurers 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, that you will face higher costs at claim time if you take that approach.

Your driving record

Insurers may charge lower car insurance premiums to experienced drivers who have not made car insurance claims in the past. This is sometimes referred to as a ‘no-claim bonus’.

The insurer you choose

It can pay to shop around a variety of insurers, as the premiums you’re quoted can vary significantly. For example, Canstar’s 2021 Comprehensive Car Insurance Star Ratings showed that 5-Star Rated policies cost hundreds of dollars less on average than the other policies rated. If you’re weighing up a range of insurers, make sure the level of cover is equivalent and you’re not inadvertently paying less for reduced protection. You might like to 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 that may help you save on your premiums.

  1. Shop around: Avoid the temptation to auto renew your car insurance without checking if you could get a better deal elsewhere.
  2. Buy online: Some insurers offer a discount if you take out your car insurance policy online, instead of over the phone.
  3. Choose a higher excess: But remember to budget for the higher costs if you need to make a claim.
  4. Pay premiums annually: If your budget allows, some insurers give customers a discount if they pay the full year’s premium upfront, rather than in monthly installments.
  5. 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. Keep in mind though that some costly car modifications can have the opposite effect, as they can increase repair costs for the insurer 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 premiums hikes.
  6. Ask for support from your insurer if you need it: If you’re experiencing financial hardship – for example, due to being in lockdown – it could be worth checking whether your insurer can offer any temporary relief. Insurer Youi, for example, has announced it is offering eligible customers in New South Wales and Victoria a 15% refund on car insurance premiums if they are driving their car less due to the latest lockdown (refund period is from 4 August 2020 until 3 October 2021).

For more tips on keeping costs down, read our guide to saving on your car insurance premiums.

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Cover image source: lev.studio (Shutterstock.com)


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