How Young Drivers can lower Comprehensive Car Insurance costs
One of the biggest challenges for young drivers is paying the highest car insurance costs on an entry-level salary.
In Australia, comprehensive car insurance for drivers under 25 is between $2,550 and $2,858 per year. This is no small figure — and is not yet attached to the net price of the car itself.
Annual car insurance costs may even exceed that stated value, depending on the car's make and the individual’s driving history. This can wipe out a big chunk of a young driver’s monthly income — assuming they’re earning in the first place.
Regardless of the difficulty in parting with one’s funds, getting comprehensive car insurance is essential. This is because it can assist you in managing even bigger financial burdens related to your car, such as accidents, hospitalisations and criminal acts done to your car.
If you want to enjoy lower car insurance premiums, you’re in the right place. Let’s explore some effective strategies you can consider to reduce your car insurance payments.
- Use a Less Expensive Car
Car insurance company quotes are based on a variety of factors. Besides looking into a person’s age and driving history, they also look at the profile of the car they’re planning to insure.
Some cars are more expensive to insure than others.
For example, it should come as no surprise that luxury car brands like Maserati, Porsche and Mercedes are among the most expensive car brands to insure. Electric car brands like Tesla are also up there in terms of price, due to their specialised parts.
As a young driver with limited income, it may be best to steer clear of these brands. This is to ensure that your insurance premium won’t be sucked dry by these expensive car brands.
Instead, look for more budget-friendly cars. In Australia, discontinued brands like Proton, Daewoo and Saab are among the cheapest car brands to insure, making them excellent options for students and young professionals who may not have the highest budget.
The reason why these car brands are cheaper to insure is because, for the most part, they’re easier to replace and repair. They’re also fairly low-performing, relative to other more luxurious car brands. These factors combined generally mean lower car insurance costs.
- Take a Defensive Driving Course
Some (not all) car insurance providers offer a discount to young drivers if they have been certified at a defensive driving course. The discount percentage varies from company to company, but popular ones like AAMI offer 10% discounts for qualified individuals.
The reason why drivers are given this privilege is because these qualifications show that the driver is skilled and specifically trained to demonstrate good driving habits. Defensive driving, to reiterate, is a set of skills that guide drivers into making safer driving decisions on the road and believing that everything can be a potential hazard.
This course isn’t a requirement to get a license or driving permit, so taking the time to complete a course shows that you’re committed to driving safely on Australian roads. This is a green flag for some car insurers. If you want to get a discounted rate, then you can show this certification to the right company and enjoy your reduced premium from there.
- Demonstrate Safe Driving with a Good History
Another way to reduce your monthly insurance expense is by keeping a clean driving record. Getting certified is one thing, showing excellent habits as a driver is another.
Car insurance companies offer discounts of up to 15% to individuals who demonstrate a clean driving record. This covers people under the age of 25 as well. ROLLiN's ‘Safe ‘n Save’ is one such incentive that offers a 10% discount to qualified drivers.
With their mobile app, ROLLiN can assess your driving habits like accelerating, braking and taking corners. Once the three-month evaluation period is up, they’ll assign a score to you - and the higher it is, the better your chances of getting a good deal for your car insurance.
As such, it makes sense to prioritise safe driving as much as you can as a new and young driver.
This not only decreases the risk of you getting hurt or your car getting damaged, it also establishes you as a low-risk driver in the eyes of certain insurance companies. A clean record is a good one in these insurers’ eyes. In turn, a clean track record can give you access to comprehensive car insurance coverage at a lower price.
Interested to know more about ROLLiN’ and their insurance policy? View more here.
4. Shop Around to find the Best Value
While you can attempt to negotiate your premium, most car insurance providers have strict regulations that prevent them from going below the quoted rate.
If their offer is beyond your budget, you don’t have to resign yourself to paying that amount. You can (and should) consider enquiring with other insurers about their policies.
Each insurance company relies on a different set of criteria when evaluating the price of their premium. As previously mentioned, this varies, depending on your age, driving history, the type of car you drive and your geographic location. They also consider how much coverage you want at most.
A good way to ensure that you’re getting the best deal is by shopping around. Ask different car insurers for their rates and their offerings. You don’t necessarily have to go for the cheapest offer - consider the value of the insurance coverage as a whole. Do they include add-ons? Is the insurer a reliable one with an easy claiming process?
By striking a good balance between ample coverage and affordability, you can rest easy, knowing that you have chosen the best comprehensive car insurance you could, given what’s readily available to you.
5. Increase Your Deductibles
If you have a substantial amount of funds in your bank account, then you can also request a lower insurance premium in exchange for a higher deductible rate, in the event that you have to file a claim.
This may put you in a financial squeeze if you’re unprepared, but this is an option if you prefer to have a more manageable cash flow every month. Plus, if you follow good driving habits, this risk can be considered negligible as you can spend many hours driving on the road without needing to file a claim.
That said, there’s always a non-zero chance of bad events happening on the road. As such, when requesting a higher deductible, be sure to strike a good balance to ensure that you can actually pay for it. This helps alleviate the financial stress of the claiming process instead of adding to it.
6. Reduce Your Add-Ons
Some insurance companies have add-ons to the insurance policy that can help you in a pinch. These include roadside assistance, rental car coverage and glass repair, to name a few.
With some companies, a few coverage options may even be considered add-ons and are optional when buying a comprehensive car insurance policy.
If you're facing financial constraints, consider opting for a more basic comprehensive car insurance policy, such as coverage limited to fire damage or accidents only. This helps you remain covered for your specific needs without having to pay all the other add-ons.
Of course, the risk is an inability to file a claim for an add-on that you purposefully failed to check. But at the end of the day, it's your call: are you okay with saving some cash at the expense of skipping out on some coverage? The decision is ultimately yours to make.
7. Bundle Insurance Policies
Combining multiple insurance policies into one bundle can be a strategic way to score discounted rates. This is especially true for young drivers who have pre-existing insurance policies with companies that offer car insurance as well.
For instance, you can combine home insurance, life insurance and car insurance into one bundle, and score a total monthly premium, that’s less than three separate insurance policies from the same company.
Companies offer these promos on a case-by-case basis, so be sure to ask around and confirm if your insurance provider has a similar scheme. Moreover, companies do this to incentivise loyal customers to stick with them for the long haul, so be sure to review the company you’re partnering with and ensure that they’re credible.
In any case, bundling can help you keep your insurance costs at a more manageable level, thus helping you save a bit more money each month.
We hope these tips will serve you well when shopping for your next car insurance policy!
