Your quote for a car insurance policy may suggest an annual premium. Still, most insurers also accept a monthly car insurance payment, often at no extra cost.
When you shop for car insurance, you ideally want adequate coverage at an affordable price. However, you should consider checking the frequency of payments and not just the premium, or cost of car insurance.
For instance, you may plan to pay car insurance premiums monthly, but the insurer may charge extra for monthly payments or not offer them at all. If you’ve budgeted $1,000 per year for car insurance premiums, and the insurer charges extra for monthly payments you’ll pay more than this if you make monthly car insurance payments. If you want to pay monthly, confirm that your insurer offers this at no additional cost before you buy the policy.
What is the average car insurance cost per month?
The cost of your car insurance policy can vary from state to state in Australia. It will also vary based on your age, gender, the model and age of your car, your claims history, and the level of cover you wish to purchase.
The average amount paid by Australians for car insurance in 2019 was $1,131 annually. However, some Aussies paid twice as much depending on their circumstances. This figure may not accurately indicate that the average monthly cost of car insurance was $94.25 ($1,131 divided by 12 months) for every Aussie. Some insurers offer discounts for paying your car insurance premium annually, which skews average annual figures and therefore doesn’t accurately portray the monthly cost.
If you prefer to pay monthly car insurance premiums, consider comparing the exact monthly cost of your policy. You can look up a car insurance cost per month calculator or ask different insurance providers their monthly premium costs. However, suppose your financial circumstances allow annual payments. In that case, you may consider making annual car insurance payments and sparing yourself the headache of budgeting for and scheduling payments every month.
You may get access to a broader range of car insurance policies if you can make annual payments. A significant percentage of insurance providers in Australia only offer annual payments on their policies.
Can I insure my car for one month?
If you’re not sure how much or how often you’ll drive your car, you might consider purchasing a short-term car insurance policy. These include a monthly car insurance policy or a ‘pay as you drive’ policy. If you buy this latter policy, you can pay only for the distance you drive, which may be preferable if you don’t want to pay a full year’s premium.
A monthly car insurance policy, for instance, involves the option of renewing the policy at the end of the month if you know you’ll be consistently driving over the next 30 days. Buying a monthly policy usually also gives you the option of cancelling the policy when you don’t require it anymore, without paying any extra fees or charges.
When buying a monthly car insurance policy, you’ll need to confirm the policy duration with the insurer. You don’t want to end up purchasing a policy that offers you monthly car insurance rates but locks you into the policy for a year. You can also look for the specific terms in your car insurance policy document or the insurer’s Product Disclosure Statement (PDS).
Can I cancel my car insurance if I pay monthly?
Whether you opt for a monthly car insurance policy or just make monthly payments on an annual policy you may be able to cancel it at any time. Depending on the insurer, however, this may require paying additional fees and administrative costs.
Some insurers may charge you a significant early cancellation fee for choosing to terminate your annual car insurance policy before the year is up. You may consider discussing your options with the insurer before purchasing the policy to help you make an informed choice.