How much does car insurance cost?

With so many factors to consider, it can be hard to know what your car insurance cost should be.

According to Canstar research, a typical year's car insurance premium can range from $1,750 to more than $2,700,[1] but the costs depend on a range of individual circumstances. To help you out, we've put together a list of some of the factors we use to determine your premium as well as how you could save on car insurance.

• If you drive 10,000 kilometres or less per year, you may be eligible for our Budget Direct Low Kilometres Comprehensive policy with a cheaper premium
• Your premium is partly calculated based on any claims you have had in the last 5 years
• By paying your car insurance annually, you can save on your overall premium cost

There are many factors that can influence the cost of car insurance policies if they apply to you. These include:

• The policy you have chosen
• The driver/s of your car
• The type of car you have
• Where you live and keep the car
• How you use the car
• The excess you've chosen
• Any optional benefits you have chosen

Details about you and any listed drivers on the policy are factors used to determine your car insurance cost. The following details regarding yourself and any listed drivers are used to determine the cost of car insurance. Here are some of the ways how:

• Age - Younger drivers can typically pay a higher premium as they’re considered a higher risk on the road. [1]
• Gender - Young male drivers may be considered a higher risk compared to female drivers. [1]
• Driving experience - The more experienced a driver you are, the more likely you'll pay a lower premium.
• Driving history - Your premium may be higher if you've been disqualified from driving or had your car licence suspended or cancelled in the past.
• Claims history - If you haven't made any insurance claims in the last 5 years, your premium may be lower.

The type of car you drive affects your insurance premium, with luxury and high performance vehicles typically costing more.

Cars with higher safety and security features and no aftermarket modifications are generally considered lower risk and this may lead to lower premiums.

Here's what else we use to determine the cost of car insurance:

• Value - This is based on the car's age, make, model and the car's market or agreed value. For example, insuring a new car will typically cost more than an older vehicle.
• Performance - If the car is modified (including engine modifications) from the manufacturer's original design, then you may pay more for your car insurance.
• Repairs - Repair costs may be higher if your car needs high quality parts or parts that are hard to find.
• Financing - Some analysis has shown that drivers with a financed car have a historically higher chance of making a car insurance claim than non-financed drivers, which can make the premium higher. [2]

Drivers who live in areas with high crime rates or experience extreme weather events may pay higher premiums, as there is a greater risk of damage to the car.

Here's what else we use to determine the cost of car insurance:

• Your postcode - Living in a safer suburb may mean that you pay a lower premium for your car.
• Where your car is parked - If your car is parked in a garage overnight instead of on the street, then your premium may be lower.

The more you drive, the higher the risk of being involved in a car accident, leading to a higher premium.

Here's what else we use to determine the cost of car insurance:

• Car usage - If your car is used for business, then you may pay more for your car insurance premium.
• Number of kilometres - How many kilometres do you drive in a year? The number of kilometres your car is driven will impact the cost of your car insurance.

There are other car insurance options, including Low Kilometre Car Insurance, which is a good option for low-mileage drivers.

Just like other coverage providers, Budget Direct has three levels of insurance, including both Comprehensive cover and Third Party car insurance:

1. Comprehensive Car Insurance
2. Third Party Property, Fire and Theft Cover Insurance
3. Third Party Property Only Car Insurance (not to be confused with compulsory third party insurance)

Here's what we use to determine the cost of car insurance:

• Agreed value vs market value - It's typically more expensive to insure your car for an agreed value (which is locked in for the term of the policy) than the market value (which can depreciate with each passing month). 
• Car insurance excess - You can increase your basic excess to lower your premium payment.
• Optional covers - For an additional premium, you can add accident hire car, reduced window-glass excess or the choice of repairer optional covers to your policy.

The excess is the amount you pay towards a claim for accidental damage to your vehicle. Choosing a higher excess can lower your premium, but you'll face higher costs at claim time.

In a no-fault accident, where another identified party is entirely at fault for the damage to your car, you won't be required to pay a basic excess. 

Budget Direct's Car Insurance customers pay a basic excess and any additional excesses that apply.

It's difficult to pinpoint an "average car insurance cost", but we understand why you would want to try to estimate your overall cost before you get a quote.

To help with this, you can use our Car Insurance Calculator to help understand some factors used to estimate the calculation of your monthly insurance cost for your car based on your age, driving history and insurance history.

And compare our Comprehensive Car Insurance prices to your previous insurer to see how much you could save.

Understanding what affects the cost of your own car insurance is the first step to how you could save on car insurance overall.

Here's how you could save on car insurance premiums:

• Select the right level of cover - Choose between Comprehensive Car Insurance, Third Party Property, Fire and Theft and Third Party Property Only for cover that's going to best suit your personal circumstances.
• Buy your policy online - If you get a quote and buy your policy online with Budget Direct, you'll receive a 15%^ discount on your first year's premium.
• Set a driver-age restriction - You could save on your premium by restricting your policy to drivers over a certain age from 21+, 25+, 30+, 40+ to 50+.
• Increase your excess - If you have Comprehensive Car Insurance and you increase your basic excess, this can lower the cost of your premium.
• Get a low kilometre policy - If you drive 10,000km or less per year, you can take out a Low Kilometres Comprehensive policy, which attracts a lower premium.
• Pay your premium annually - By paying annually instead of in instalments (i.e. fortnightly or monthly), you'll pay a lower premium.

While the average car insurance cost depends on a range of different factors, saving on your car insurance premium is still possible.

With Budget Direct you can get a quote and purchase a new Car Insurance policy online and receive 15%^ off your first year's premium.