It's official, Sydney pays more for car insurance

It's official, Sydney pays more for car insurance

December 9, 2010

With the vast number of car insurance providers in the market fighting for your business each year, how does this affect how much we pay for comprehensive car insurance?

According to RateCity’s half-yearly national car insurance study, there is a big difference. Using the same driver profile of a 31-year-old single male driving a 2005 Toyota Corolla, with the highest level no-claim bonus, RateCity compared quotes from 26 car insurance providers for four different addresses within six capital cities and compared each city.

Brisbane cheapest overall
The study found that Sydneysiders pay the most, at an average of $1135 while Brisbane pays the least and nearly half of that of Sydney, at an average of $654. Melbourne is not far behind Sydney with an average of $948. Overall, the national average is $801 per year.

There was also a significant difference between the highest and lowest quotes for each city. For instance, Melbourne showed a massive average difference of $975, with Sydney not far behind at $928. Brisbane showed the smallest difference with an average of $549.

But the good news is that if you don’t live in Brisbane you can still save on your car insurance premium.
How to save on your car insurance
Damian Smith, RateCity’s CEO, says the best way to save on comprehensive car insurance is to compare deals at financial comparison sites such as RateCity.

“Our car insurance study shows that smaller providers such as Virgin Money, Budget Direct, Bingle and Youi all offer substantially lower premiums – as much as 50 percent lower than some of the traditional players – across all of the cities we surveyed,” Smith says.

“These newer players – along with others like Australia Post, Progressive, and Real – are finally putting some competitive pressure on what has traditionally been a market dominated by too few companies,” he says.

This year alone Coles and Kmart are just two big names to join the car insurance league, increasing competition and the range between prices even further. For customers the main benefit of this is more choice and ultimately the difference between paying too much and saving a lot of money.

“There are more companies aimed at the budget end of the spectrum that can really save you hundreds of dollars each year. Just because they are smaller and lesser-known than some of the larger companies, they are well worth investigating,” Smith says.

No matter where you live in Australia, if you are in the market for car insurance, compare car insurance quotes online to see how much you can save yourself. Be sure to read to the product disclosure statement (PDS) to see what is included in your policy and what you are not covered for.


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Learn more about car insurance

Does insurance cover a stolen car if keys were in the car?

A car insurance policy that covers the theft of your car, such as third party fire and theft insurance, usually covers a stolen car, even if the keys were in the car’s ignition.

However, your insurer may deny the claim if you live in an area where there have been several car robberies reported recently. They will see you leaving the keys in the car as a case of negligence. In such cases, your insurance provider may even expect you to have installed anti-theft security measures in your car. 

You may need to confirm whether or not you left your keys in your car, and if they had been stolen or misplaced, before filing your car insurance claim. The loss or theft of your car keys may be covered by a comprehensive car insurance policy, but usually as an optional item.

If you can confirm that your car keys were stolen, mention this in your claim as this will help establish that your car was not stolen as a result of your negligence.

Can you insure your car for 6 months?

Most Australian insurers won’t offer you a 6-month car insurance policy, so you may need to buy a policy that covers your car for damages and cancel it after six months. You will need to purchase comprehensive car insurance to protect your car from accidental damage, theft, vandalism, or natural disasters.. 

Consider checking whether your 6-month comprehensive car insurance will cost more if you pay monthly or six-monthly premiums instead of a one-time annual premium. Another question to ask the insurer is whether you’ll need to pay administration or cancellation fees when you cancel the policy.

Alternatively, you can look for a suitable ‘pay as you drive’ car insurance policy, which usually offers you the coverage of a comprehensive car insurance policy but only requires you to pay for the distance driven. Such a policy may not be the ideal 6-month car insurance plan as it is based on how much you drive rather than for how long. If you need to drive a lot, you may end up paying more than you’d pay for regular car insurance. 

Can I drive a new car without insurance?

It is illegal to drive a car in Australia without insurance. Most states require that you get your insurance in place before you drive the car off the dealership’s plot. So, the answer to whether driving a new car without insurance is no, it is not allowed.

The only time you can possibly legally drive an uninsured car is when you have to get the vehicle registered. You should drive straight to an inspection station or your state's vehicle registry. You must also make sure that you take the most direct or convenient route possible.

It is important to note that your compulsory third party insurance (CTP or green slip) isn’t valid until your car is registered.

Driving an unregistered or uninsured vehicle can have severe legal repercussions. If you are involved in an accident, and are driving an unregistered and uninsured vehicle, you will be personally liable to pay compensation to anyone hurt, as well as for damages. If you are caught driving a vehicle without insurance, you may be fined or even have your vehicle seized.