Car insurance customers are potentially missing out on hundreds in savings after a new ASIC investigation released today found Australians weren’t shopping around despite price hikes of 42% over a 5-year period.
The report, which puts a spotlight on a lack of transparency in car insurance pricing, found customers did not understand the factors behind sharp and repeated premium increases.
Canstar research from a survey of over 6,700 insured drivers found over 70% have not changed insurers in the past two years, including 28% of drivers who have never switched providers.
Drivers could save 26% off their annual car insurance
Canstar research shows drivers willing to shop around could potentially cut their annual comprehensive car insurance costs by an average of 26% – significantly more than the 8% increase reported by ASIC in the year to July 2025.
Someone paying the average premium of $2,460 could potentially save $651 a year by switching to one of Canstar’s top-rated policies.
The savings can be even greater depending on where you live, with Victorian drivers potentially saving an estimated $835 a year and NSW drivers more than $800.
Importantly, these aren’t simply the cheapest policies on the market, Canstar’s research assesses the overall value of the policy, taking into account both the price and the quality of cover.
Average comprehensive | |||
|---|---|---|---|
State | Market | Avg 5-star | Difference |
NSW | $2,792 | $1,991 | -$801 |
QLD | $2,169 | $1,750 | -$419 |
VIC | $3,293 | $2,458 | -$835 |
SA | $2,145 | $1,573 | -$572 |
WA | $2,208 | $1,675 | -$533 |
TAS | $2,014 | $1,505 | -$509 |
NT | $2,577 | $1,797 | -$780 |
Nationally | $2,460 | $1,809 | -$651 |
Source: Canstar. Based on comprehensive car insurance policies rated in Canstar's 2026 Car Insurance Star Ratings. Premiums include quotes for both new and used cars for a range of scenarios, with a state-specific target excess of $800 to $1,000.
How can I reduce my car insurance premium?
Shopping around isn’t the only way drivers can potentially reduce their car insurance costs. Other levers motorists can consider when reviewing their cover include:
- Pay annually: Paying upfront rather than monthly can unlock discounts of between 10% and 20%, according to ASIC.
- Review your excess: Opting for a higher excess can bring down your premium, although it means paying more if you need to make a claim. Canstar analysis found increasing an excess from $600 to $1,000 could save as much as $400 a year in some cases.
- Check how much you drive: If your driving habits have changed, it could be worth reviewing your nominated annual kilometres. Reducing your estimate from 15,000km to 10,000km could save as much as $200 in some cases, while reducing it to 5,000km could save up to $400. Drivers should be aware that exceeding their nominated kilometre limit may result in additional excess charges.
- Ask about available discounts: The ASIC report found 68% of drivers had not tried negotiating with their current provider, which can often secure a discount without having to switch.
- Review your insured value: If your car has lost value since you bought it, switching from agreed value to market value could reduce your premium. However, you may receive a lower payout if your car is written off.
Canstar’s Data Insights Director, Sally Tindall, says, “Car insurance is one of those costs that creeps up just enough that drivers groan, but pay the bill all the same, without stopping to compare their options.”
“With premiums rising year-after-year, loyalty to your insurer could be costing you hundreds of dollars. Our research shows over 70 per cent of insured drivers haven’t switched providers in the past two years, including more than a quarter who’ve never switched at all.
“ASIC’s findings are a timely reminder for drivers to ask questions when their premium jumps, but also use it as an opportunity to negotiate on price. Your car insurance premium is not set in stone. Insurers can hand out discounts, but they’re only going to entertain the idea if you ask.
“Switching providers can also make a significant difference. Our research shows a driver paying the average comprehensive premium of $2,460 could potentially save $651 a year by switching to a top-rated policy.
“That’s money that could stay in the household budget rather than going towards a higher insurance bill, and it’s why we encourage drivers to treat their annual renewal notice as a call to action, rather than an automatic invitation to pay more.
“Paying annually, reviewing your excess, checking your nominated kilometres and asking about safe driver discounts can all potentially bring costs down further.”
