Jack Han investigates the savings Australians can find when shopping around for car insurance.
January 25, 2010
Australians have been content with paying high premiums and fees on their car insurance for years now, but new research suggests that these costs may be far higher than we deserve to pay.
A study conducted by financial comparison website RateCity has discovered that Australians are spending an excess of $3.36 billion each year than necessary on comprehensive car insurance.
The research was carried out on over 23 car insurance providers in Sydney, Brisbane and Melbourne, and concluded that many drivers could save up to $800 on their comprehensive car insurance simply by comparing offers online.
Damian Smith, RateCity’s CEO, believes that savings could be made across the board for thousands of Australian drivers.
“The average cost of comprehensive car insurance for the three-city metro locations was $890 and compared to the lowest average national quotes of $584, it’s possible that Australian drivers could save $300 each or $3.36 billion as a whole.”
There are also dramatic differences in car insurance costs for drivers in each of the three cities. On average, Sydney drivers pay $500 more than Brisbane drivers and about $370 more than Melbourne drivers.
The difference between the lowest and the most expensive quote was the widest in Sydney by about $800, followed by Melbourne ($650) and Brisbane ($464).
Out of the car insurers that offer comprehensive car insurance in the three locations, RateCity discovered that Budget Direct provided the cheapest quotes, followed by Ozicare and ibuyeco.
These new statistics will place further pressure on car insurance providers to remain competitive. Currently, with only two major players, IAG and Suncorp-Metway own the majority of car insurance brands and dominate about 75 percent of the market share.This changed in late 2009 when Virgin Money entered the market, offering capped premiums with flat rates.
“Competition between car insurance providers is getting tighter which is why it’s so important to compare quotes at RateCity,” says Mr Smith. “The major car insurance providers make it very hard for Australians to compare prices so we make this job the easy for you.”
As the industry becomes more competitive, a saving of $800 would be enough to tempt any customer to new deals, which means that Aussie drivers can expect more innovative and attractive offers from the bigger insurance companies as they try to maintain their customer base.
RateCity plans to continue this research every six months to monitor the competitiveness of Australia’s car insurance companies. For now, it is up to every driver to compare car insurance online and get the prices they truly deserve.