How to Save on Car Insurance Premiums

There's no denying that car insurance premiums have risen in recent years, which can be due to a variety of reasons, including increased cost of parts and repairs. Budget Direct car insurance premiums are based on what we call risk factors, which we use to calculate how likely you are to be involved in a car accident. This is calculated by assessing your age, the other drivers listed on your policy and your accident history, just to name a few.

This guide will show you how you can help save on your car insurance without having to compromise on your comprehensive cover. If you've kept a clean record and aren’t considered a high risk, these factors may contribute to a lower premium.

If you want to reduce your premium cost, it's important to consider the drivers listed on your policy.

Premiums can be expensive if drivers are under the age of 25 years old. This is because there is an associated level of risk for younger drivers, particularly males. For example, the car insurance market average premium for drivers under 25 is around $2,704 compared to $1,589 for those aged from 25 to over 50 years old. [1]

You can consider restricting your Budget Direct policy to drivers above a certain age to help reduce costs for your car insurance premium. These ages include:

• 21
• 25
• 30
• 40
• Or 50 years.

If you restrict the age, your car will only be covered if it's driven by someone over the age restriction listed on the policy.

Typically, the older the drivers are on your policy, the lower your premium is likely to be.

Car insurance excess is what you pay your insurer if you make a car insurance claim and are at fault. To help lower your instalments, you can opt to increase the excess on your policy.

However, if you increase it, you will be required to pay a higher excess if an accident happens and you are at fault. And although this can be more cost-effective for your yearly or monthly payments, if you cause an accident, you could be thousands of dollars out of pocket for one mistake.

Before adjusting the excess on your policy, consider whether a higher excess is feasible or whether a higher premium with steady payments is more financially suitable.

Annual lump sum vs monthly instalments — which is cheaper? To help cut down costs, you can choose to pay an annual sum instead of monthly or fortnightly payments. This is because smaller instalments usually incur extra costs and processing fees. By paying annually, you could pay a lower car premium.

If you can afford a one-off yearly payment, this may be a more suitable option, but consider your financial situation first.

Are you driving less than 10,000 km per year? If you're not driving far and wide, consider switching to our Gold Low Kilometre policy, which offers the full benefit of comprehensive insurance for a lower premium. This policy can help you reduce costs while still having top level of protection for your car insurance.

With this policy, you can also choose to set your agreed kilometres at the time of renewal each year, increasing or reducing the kilometres based on your needs. Although, if you exceed the set amount of kilometres, an additional excess will apply.

Learn more about Budget Direct's Gold Low Kilometres Comprehensive policy.

Choosing to insure your car for market value (especially if you own an older vehicle under 10 years old), is usually a cheaper alternative compared to insuring it for an agreed value. This is because your car's value could depreciate, whilst an agreed value is fixed for the policy term. 

When thinking about insuring your car for market value vs agreed value cover, agreed value means you're covered for a fixed amount for the term of the policy.

Keeping your car in a secure place could help reduce your risk and overall insurance premium.

As outlined in the Product Disclosure Statement (PDS), we need to know where your vehicle is normally kept and parked at night.

For example, parking your car in a garage, under a carport or on the street determines the risk to insurers. If your car is usually parked on the street, this is more unsafe and is likely to increase your premium. We also ask that you ensure your vehicle is locked and that you keep all keys safe while your car is unattended.

In addition to your Budget Direct Car Insurance, you can choose to add optional benefits to your cover for extra protection. These include:

• Accident hire car: The accident hire car optional benefit provides you with a hire car if you're at fault in an accident.
• Reduced window-glass excess: You can reduce the excess for damage to your car's windows with this optional benefit. This includes the rear and side windows as well as the windscreen.
• Choice of repairer: With this optional benefit, you can nominate your preferred repairer.

When reviewing the optional benefits available with our car insurance policies, make sure you're making a reasonable financial decision and only pay for the extras that you might need.

If you're a new Budget Direct customer, save 15%^  on your first year's premium for a new policy when purchased online.