Saving on Auto Insurance

According to the results of a survey conducted by Compare the Market representative, Bill Shock Tracker, with a sample size of 1,501 respondents who were asked about their monthly expenditure on auto insurance, it was found that the typical cost of car insurance in Australia is $101.70 per month or $1,220.40 per year.

Buying a vehicle is a massive investment, when you know you need one to go long distances. However, the spate of auto accidents in Australia gives added impetus to paying for insurance that is bound to come when you pay for the vehicle at the dealership. With that in mind, people may ask how they can save up on auto insurance?

Types of auto insurance in Australia

There are some ways you can save up on auto insurance, but you have to learn first what kinds of auto insurance is available in Australia:

• Compulsory Third party (CTP) auto insurance is mandated in every state and territory. It covers a driver’s liability if they figure in an accident and other people are injured or killed. However, it will not account for injuries to the driver and their passengers, or even damage to their vehicle.
• Comprehensive insurance is a highly extensive option offering protection for damage to the driver’s vehicle, and the damage it causes to other people’s vehicles and property if an accident occurs, regardless of who is at fault. A comprehensive insurance policy will also account for accidental loss, theft, vandalism, or storm/hail damage. 
• Third Party Property Damage (TPPD) exclusively applies to the liabilities for damaging another person’s property including any vehicle, during an accident. If the subject is an uninsured vehicle, TPPD policies may apply for certain types of damage inflicted. 
• Third party Fire and Theft Policies (TPFT) are the same as TPPD policies except that they will also cover repair and replacement if a driver’s vehicle was damaged by fire or stolen.

Effective ways to save on auto insurance

Explore and compare

Take the time to look around for auto insurers in your state and lay out each premium they offer. A number of comparison sites offer this, but in some cases, the rates are based on factors such as the age of the driver, their driving habits, accident record, the number of kilometres driven in a year, the price tag of a car up to a certain value, and its age.

No auto-renewal

If your policy has a specific end-date, check the fine print if there are options to auto-renew the contract, and ask for the policy to naturally lapse instead of carrying over. Some auto insurance market professionals claim that Aussie drivers who may find their policy lacking often look around for better deals when it is up for renewal.

Buy “Cheap-to-insure” vehicles

The very design and features of the vehicle itself is factored in when looking for affordable premiums on comprehensive and CTP coverage. Some auto insurers claim that due to the prevalence of safety features such as anti-lock braking and airbags, plus availability of parts support and maintenance, premiums for sedans and SUVs are much lower than high-performance rigs such as sportscars.

Driving frequency

Some autocare experts suggest a lesser frequency of driving the vehicle, up to the point that you only drive around when you really need to. Aside from the possible fuel and maintenance savings, certain auto insurance policies can program discounts when the vehicle is driven for a set number of kilometres in a calendar year. Even with presumably infrequent times of driving, always make it a point to wash your steed.

Bigger excess

Consider the possibility of paying more on the excess, which is the amount due the insurer when you file at-fault claims. A bigger excess can mean smaller premiums.

Clean driving

If you drive out, insurers can offer favourable discounts on those who are careful on the road. A vehicle owner may also undergo advanced driving training courses and submit the certification to the insurer as added proof for possible discounts.

Ditching the frills

Many auto insurers can offer various special addons to your policy such as 24-hour roadside assistance. You must review your policy and your driving history over the past year to determine if you really need those add-ons at all. Trimming the add-ons off your policy may save you a bit more on the premium.

Under guard

Auto insurers account for the way your vehicle is set aside when not in use in calculating your premium. When just parked on the curb or driveway instead of a secure garage, there’s a danger of theft looming. You must also invest in a dash cam or anti-theft devices such as brake or steering wheel locks, GPS trackers and a killswitch or engine immobiliser; your insurer can list them for possible discounts.

Dash cams, in particular, have gained notability in recent years, due to their potential to be a source of evidence in accidents (along with any traffic cameras in the vicinity), as eyewitness testimony may be possibly doubted. Kill switches or engine immobilisers, when active, prevent car theft by shutting down within a certain distance of where the vehicle was taken; however, installation should be through trusted mechanics and placed in very unique and discreet locations.

Annual payment

When your auto insurer discusses the frequency of payments on your policy, opt for paying every year the policy is in effect instead of monthly, with the payments to be made by auto-debit or credit card. Monthly payments are not advisable, due to the danger that you could lose coverage even if you miss payment by one month.

Consolidate the insurance with other products

If the various insurance products you pay for are spread out across a number of companies, it can be difficult to settle accounts when all are due. You must ask your insurer if they offer consolidated insurance programmes, like if you took out an auto insurance policy with one company, ask if they also have options for say, home insurance. Bundling the coverages may help you on the discounts.

UBUDGET, provided by UBOMI, empowers users to manage their finances by setting and monitoring budgets, thus giving them increased control. This is a formidable resource that can assist in accomplishing personal targets.

If you liked our “Saving on Auto Insurance” and find it useful, check our blogs regularly for more information to get updates on UBOMI’s budget app and expense tracker.