Car Insurance is one of those things that we have to have, but don’t you get fed up of paying more than you have too. A general rule of thumb is if you can’t afford the insurance, you can’t afford the vehicle but maybe you are missing a few tricks that could save money on your car insurance policy.
Rather than getting overwhelmed by choice, we provide a few tips and tricks to help you save money when choosing a new car insurance plan. Learn the true value of your vehicle for more accurate results, understand the types of brokers out there and how you can use your excess to save money too.
In order to pay less for your next insurance plan you need to know the value of your vehicle, to not be afraid to play vendors off against each other and finally understand the risk of increasing your excess for lower premiums. Mastering these three core principles is the recipe to saving money.
Money Saving Ideas
The following are a few questions you can raise when going through the motions of choosing car insurance:
Young drivers: Always pose the question to your insurance provider, “will an advanced driving course reduce your premium?” Course prices can range from $300 to $700, but it can save you $50 per month on premiums. This saving pays for the course within the first year and will continue to do so year after year.
Like for like: One provider may be cheaper, but not necessarily provide the correct cover. Always check the fine print to ensure you are comparing the same levels of cover before buying.
Additional drivers: To save that little extra money, consider leaving additional drivers off your policy e.g. younger drivers. The more people conducting your vehicle, the more you will spend to have them covered.
Knowing the value of your vehicle will help you choose a more reasonable plan and being over-protective of your car in this case will only cost you more money. Generally, most people will choose the ‘recommended’ value shown by the provider and this is where the vendor wins. Look at second hand car websites and speak to local dealers to get a true value for your vehicle, don’t pay more than you have to or don’t lose out on needed cover for replacing your vehicle by incorrectly valuing your vehicle.
When renewing your car insurance policy too, providers will keep your car value that you entered when first opening the policy. After said policy expires, your car won’t be worth the same so make sure to save money that the vehicle value is renewed too.
Car Insurance Shopping
Without a doubt, shopping around is the best way to save money on car insurance. Use comparison websites to get a general benchmark, but don’t stop there. After picking your top three, individually phone those companies for a quote and see how they compare to the internet results. Generally, the providers will ask what price you have received elsewhere and it’s this bidding war where the real money saving action is seen.
Below is a rough guide to some of the better known providers in Australia, so if they come up in your top three this information may prove helpful:
Just car insurance: Good for younger drivers with modified vehicles other providers usually dismiss.
AAMI: Willing to compete on other insurance quotes, whilst their variable excesses can quickly cut costs too.
NRMA: More suited to older Australians and those with long driving history.
Youi car insurance: Not great for drivers in their 20’s. They ask many questions in hope of lowering your premium.
Bingle car insurance: a low cost provider that advertise a budget, no frills product, but there are brokers that still come out cheaper.
Save Money on Excess
It boils down to how much risk you are willing to take and ‘variable excess’ allows you to slide between levels to change the total car insurance price. Weigh up the amount that you use your vehicle and the areas that you drive and park within. Reducing your premium and having an excess of $900 may be suitable for those driving shorter distances in outback areas, whilst a higher premium and lower excess might suit those city dwellers.
This is a personal decision, but would you prefer to keep the upfront savings and only pay if you do happen to have a road incident or pay less if you (touch wood) have an incident?