How can I reduce my car insurance premiums?

Car insurance is a good thing. Paying too much for car insurance isn’t. Fortunately, there are steps you can take to make sure your premiums are no higher than they need to be.

If you’re paying lots of money for comprehensive car insurance to cover a car that isn’t worth a great deal, you might be better off switching to third-party car insurance, or third-party, fire and theft. Check out our story on the different types of car insurance and work out which type is best for you.

When renewal time comes around, it’s very tempting to just click on “Renew now”, hand over your cash and move on to something more interesting. But taking some time to shop around can save you a bundle. Use a comparison website such as Canstar

or Finder

, and take a look at Choice

.

Your excess – the amount you have to pay when you make an insurance claim – can make a big difference to the cost of your premiums. Agree to a higher excess and your premiums will come down. When choosing your insurance policy you should be able to play around with different excess figures to see what difference they make.

If you pay your car insurance premiums monthly you’ll end up paying more than if you pay them annually. If you can afford to, pay for the whole year up front.

Insurers take your driving record into account when they give you a quote for car insurance. They are likely to consider how many at-fault claims you have made in recent years, and some insurers will also take into account the number of demerit points you’ve got (demerit points are also a factor when you’re getting quotes for New South Wales compulsory third-party, or green slip, insurance). If you’ve had your licence suspended, that’s also likely to count against you. So drive safely. Consider whether making a claim is worthwhile: a no-claims bonus can be worth its weight in gold.

Where you park your car affects your premium. If you can park in a garage, carport or driveway, rather than on the street, do so – and make sure you tell your insurance company about it.

You can insure your car for an agreed value (a figure that you agree on with your insurer) or market value (in which the insurer, in the event of your car being stolen or written off, pays you what it would have been worth on the open market). Your premiums will be lower if you insure for market value.

Check if your insurer offers loyalty discounts: if you have other policies with them (home and contents insurance, for example) you may be offered cheaper car insurance.

The distance you drive in a year can affect your premium. Some insurers offer discounts for low-distance drivers. You might also look into pay-as-you-drive policies, which cover you up to a certain distance, and can be cheaper than traditional comprehensive policies.

Do you really need a hire car in the event of an accident, or personal effects cover? Reconsider the optional extras to save money.

^Disclaimer

^{Viva Energy Australia Pty Ltd (“Viva Energy”) has compiled the above article for your general information and to use as a general reference. Whilst all reasonable care has been taken by Viva Energy in compiling this article, Viva Energy does not warrant or represent that the information in the article is free from errors or omissions or is suitable for your intended use.}