It’s a simple way to slash your car insurance premium, but you’ll need to think it through.
Owning a car is expensive – and the costs don’t stop once you’ve driven it out of the car yard. First there’s the purchase price (and possibly ongoing finance repayments), then insurance, servicing and maintenance, registration, and fuel – which never seems to get any cheaper.
So of course you, like every other Australian, want to save money on the cost of running a vehicle wherever you can.
Well here’s a little tip.
Look at your excess
A simple tweak could cut hundreds of dollars from your car insurance premium, with Compare the Market urging Australian motorists not to stick with the default excess when taking out or renewing a policy.
The comparison experts found an average quoted annual difference of $398 (17 per cent) by increasing the excess on a sample car insurance policy from $600 to $1,000.
While not all insurers offer every excess option, premiums were quoted at around $1,300 less on average per year when the excess was lifted from $500 to $2,000.
This one change could save you hundreds, but the right choice will ultimately depend on how much you can afford to pay out of pocket if you need to make a claim.
A car insurance excess is the set amount you agree to pay when you lodge a claim after events such as theft, storm damage or an accident- unless your insurer determines you were not at fault.
That’s the basic excess, but additional excesses may apply depending on your policy – for example, if the driver is under 25 or isn’t listed on the policy.
While a higher basic excess usually means a lower premium, some repair costs could end up being less than the excess you choose, so it’s often a balancing act.
The good news is that most insurers let you adjust your excess at any time – you don’t have to wait until renewal. Just make sure it’s the right decision for your situation.
You could also consider paying annually instead of monthly and taking advantage of any available discounts or incentives.
And as always …
Shop around and save
It is more important than ever for insurance customers not to be ‘one quote wonders’ and shop around for bigger discounts.
The Compare the Market insurance experts see price gaps of hundreds – sometimes thousands – between quotes from different insurers. So if you’re not happy with the amount your paying for car insurance, or things like ‘default excess’, don’t stop there – shop around instead.
Owning and paying for a car is nothing to sneeze at. Cut costs where you can.
