Getting car insurance can be costly if you’re under 25 years of age or a newly licensed driver. That’s because to insurance companies you’re considered a high risk driver, who is statistically more likely to have an accident.
So until you have a track record of safe driving, you’ll be paying a risk penalty on top of your normal car insurance costs.
To help you figure out your best options and ways to reduce the cost, we’ve assembled these top tips for car insurance if you’re a new driver or under 25:
1. What type of insurance should I get?
Mandatory - to start with, you’re required by law to get Compulsory Third Party (CTP) Insurance. This insurance helps you, and anyone you injure on the road, to get better sooner, through quick access to treatment and care and if needed, payments for income loss.
You cannot register your vehicle without it. Check your state’s or territories’ regulations for more information.
Voluntary – Comprehensive car insurance is usually the most expensive but it’s also the most popular because it covers you for damage to your car and to the other driver’s car or property. It often has additional benefits like use of a hire car while repairs are being made to your vehicle, if you were the not at fault driver. Always remember to read the detail of the policy, so you know what you are covered for.
2. Is there a cheaper option?
There are other forms of voluntary car insurance that are cheaper as long as you are willing to shoulder more of the cost if something goes wrong. Third Party Property Damage car insurance will cover you for damages to the other driver’s car or property – but not yours. Third Party Fire and Theft car insurance also covers damages you cause to another driver’s car or property, plus you’re covered if your car is damaged by fire (but not in an accident) or stolen.
3. Should I stay on my parents’ car insurance plan?
If your parents own the car you’re driving, this could be an option, but make sure you talk to their insurer so you know exactly what you’re covered for. There may be an additional cost for adding you to the policy.
4. How do I reduce my premium?
The rewards that come from having a safe and demerit free driving record, like lower premiums (the price of insurance) and no claim bonuses, take time to accumulate, but they are your best ways to reduce your car insurance costs.
In the meantime, there are other things you can do to reduce your premium. For instance, choosing an inexpensive car, installing a car alarm, immobiliser or tracking device, avoiding performance enhancing modifications, or taking a safer driver course.
Paying in instalments can make payments more manageable, but you can often get a cheaper rate for paying 12 months at a time.
5. Other things to keep in mind
When shopping around for insurance, be sure to ask about extras, like coverage for windscreen damage or no claims bonus protection. You may need something like the NRMA’s Comprehensive Plus car insurance to cover everything.
It’s tempting, when money is an issue, to go for the cheapest car insurance option, but remember – if an accident happens, and you’re not covered properly, the costs could run into the thousands and could mean the loss of your car.
So get the best deal for you and your car.