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How much does car insurance cost in Australia?

Peter Terlato avatar
Peter Terlato
- 5 min read
How much does car insurance cost in Australia?

The cost of car insurance can differ from person to person. How much you’ll pay in premiums pertains to a range of factors including the type of policy you want, your age, driving history, the type of vehicle you want to insure and how often you drive.

For instance, you’re likely to pay a higher premium if you’re a younger driver because drivers aged under 25 are more likely to have severe road accidents than older drivers. Women usually pay less for car insurance than men, simply because they’re involved in fewer accidents than male drivers and therefore, make fewer car insurance claims. 

You may also have to pay more for car insurance for a brand new car than for an older car, and if you live in Victoria or New South Wales, you’re likely paying more for car insurance than drivers elsewhere in the country.

Estimating the average cost of car insurance can be challenging, given how personalised car insurance quotes can be.

If you buy a third party property damage policy, you may pay much less than what you’d pay for a comprehensive car insurance policy, though you will have a lower level of coverage. If your car insurance covers damage to your vehicle as well, you will likely have to discuss with your insurer whether your policy covers your car up to an agreed value or up to the market value.

Your choices will impact the cost of the policy, as will the excess amount you choose to pay out of pocket. If you choose additional coverage - such as windscreen cover - or add other drivers to your policy, your premium will likely be higher. If you intend to use your car partly for business purposes, your insurer may charge you a higher premium.

How much does Compulsory Third-Party (CTP) insurance cost?

Generally, CTP insurance costs are included as part of your vehicle registration. However, in NSW, QLD and the ACT policies are sold separately in a competitive market. The total price of your CTP or Green Slip consists of the insurance premium, fund levies and GST.

An insurer may consider risk factors that might increase or decrease the cost of your premium, including:

  • where the vehicle is garaged
  • type of vehicle and its characteristics
  • age of the vehicle
  • age of the driver or rider
  • driver’s or rider’s safety record

How much does comprehensive car insurance cost?

A comprehensive car insurance policy is usually preferred by drivers when they own an expensive car which can cost a lot to repair. The value of the car will impact the premium you pay for insuring the car, especially since you’ll want the policy to cover the widest range of incidents and possible damages.

Compared to the cost of insuring a more popular car model, the average cost of comprehensive car insurance can be twice or even three times as much, although the exact amount can only be gauged by getting comprehensive car insurance quotes based specifically on your details.

It is not mandatory to buy a comprehensive car insurance policy. If you drive a fairly common car model and aren’t paying off a car loan, you may consider buying only third party property damage insurance or third party fire and theft insurance.

Consider finding out the risks to which your car is exposed when parked either at your home or your workplace to decide how much insurance you need over and above the mandatory third-party coverage. You can also look at your driving habits, and how much you depend on your car for everyday tasks.

How do I compare comprehensive car insurance policies?

The comprehensive car insurance policy most Australian insurers offer should ideally cover any damage to your car and the things you keep inside it. In addition to this, the policy should cover the cost of any treatment you need for injuries suffered in an accident, irrespective of whose mistake led to the accident.

However, when you compare comprehensive car insurance quotes, you should check if such coverage is included along with the liability coverage usually offered by a third-party property damage insurance policy. You may want to look at the incidents covered by the policy in the product disclosure statement (PDS) and check if those you’re more likely to experience are covered.

Comparing car insurance quotes usually requires supplying a fair amount of personal information in order to get an accurate quote. If the insurer is only asking for your postcode and the car you drive but not your age, gender and driving history, you may be offered a premium rate that doesn’t reflect your driving experience.

In the event you find a policy that is otherwise suitable for you, you may want to ask the insurer to give you a more precise quote, and also find out if you can get a discount if you have a no-claims history or are buying the policy online. 

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Product database updated 14 Apr, 2024

This article was reviewed by Personal Finance Editor Alex Ritchie before it was published as part of RateCity's Fact Check process.