Is pay-as-you-drive insurance and car sharing the future of driving?
COVID-19 has really been a game changer when it comes to driving. Many people may now require a private way to get around, or might be rethinking the need for their car during lockdown.
World Car-Free Day rolls in on September 22 this year, encouraging motorists to give up their wheels for the day to minimise air pollution. It’s one of many initiatives linked to drivers reducing their carbon footprints, but it brings up a couple of other questions, too.
Firstly, can Aussies live without their cars in the post-pandemic world? And then for the more financially astute drivers: how much does owning a car cost and are there any cheaper alternatives?
How much does car ownership cost in Australia?
Every car owner knows there’s a lot more than petrol that goes into keeping a car on the road. You’ve got to think about car insurance, registration, repairs, parking costs and more.
According to recent figures from car sharing service Car Next Door, this all adds up to around $7,000 a year for a small vehicle and upwards of $11,000 for a larger ride.
Car sharing on the rise
Firstly, let’s not get car share services confused with rideshares like Uber or Ola – these act more like taxis.
Instead, car sharing literally involves borrowing other people's cars, or renting out your own, for a set number of hours or days. Each provider will have different rules and processes for things like insurance, fuel usage and wear and tear.
Generally, borrowers will be directed by the company website or app to cars of varying sizes and values being rented out nearby. Then you simply book online for the time you need (often charged at an hourly or day rate) and follow instructions on how to pick up the keys.
Why use a car share service?
It’s a useful option for people who can drive but don’t own a car, as it’s often cheaper and more flexible than a hire car.
For example, Car Next Door offers rental vehicles from $5 an hour or $25 a day. The company’s co-found Will Davies said they’ve seen a jump in borrowers due to COVID-19 travel restrictions and social distancing requirements on public transport.
“People are definitely travelling more irregularly, which begs the question of whether buying a car this year is a wise choice,” he said. “Since April, borrower applications are up 40% as people who don’t have access to a private car have started shying away from public transport.”
For car owners sharing out their vehicles, this kind of opportunity can help offset car-related costs.
“We’ve also seen a 50% uptick of car listings as those who have cut out the daily commute by working from home are sharing their car to supplement their income,” Davies said.
What is pay-as-you-drive car insurance?
If you’re not keen on someone else scooting around in your ride, you might consider pay-as-you-drive insurance to drive down your car bill.
This can come as an option within comprehensive policies, and is kind of like a premium reduction for customers who drive less. When you take out this kind of policy, your odometer is recorded and then monitored monthly - or at the end of the policy period - to ensure you’re driving under the set or negotiated kilometre limit.
Some providers will let you bump up your kms if it looks like you’re going to exceed the limit, but this could come with a fee. And remember: you could have trouble making a car insurance claim if you’ve tipped over your limit without informing your insurer.
Which insurance companies offer pay-as-you-drive policy options?
There are a fair few providers offering pay-as-you-drive cover, including many new tech-savvy contenders. Check out a few options below:
Head to Mozo’s car insurance comparison page for more details on comprehensive policy options.
Compare Car Insurance - last updated January 23, 2021
Comprehensive Car Insurance
- Monthly premiums
- Yes Costs Extra
- Choice of repairer
- Optional Extra
- Choice of excess
- $500 - $1,850
- Agreed or market value
- Agreed Or Market
Available discounts
- Online Discount Up To 15%
CompareCompareComprehensive Car Insurance
Get award winning Car Insurance. Save 15% ^ on your first year’s premium when you purchase a new policy online. Budget Direct offers tailor-made cover, new-for-old replacement, 24/7 claims, a highly-rated claims service, and get a hire car following a theft.
- New car if written off
- Yes - within 1 years and 20,000 km of original registration
- Rental car after theft
- Yes - Up to $1,000 total.
- Rental car after accident
- Not at fault - Yes. At fault - Optional Extra. Up to 14 days for at fault accidents.
- Windscreen cover
- Yes - standard excess. Option to reduce windscreen excess to $40 on every windscreen claim for an additional premium.
- Modifications
- Covered only if agreed in writing.
- Young driver excess imposed
- $600 for drivers under 21, $500 for drivers under 24, $600 for unlisted drivers, $500 for inexperienced drivers over 24.
- Roadside assistance
- Optional Extra
- Other benefits
- -
- Other restrictions
- -
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Comprehensive Car Insurance
- Monthly premiums
- Yes
- Choice of repairer
- Yes
- Choice of excess
- $100 - $2,000
- Agreed or market value
- Agreed Or Market
Available discounts
- No Claim Discount
- Loyalty Bonus 5% With Various Conditions
CompareCompareComprehensive Car Insurance
Choose car insurance to match your needs, with no extra charges to pay monthly, a flexible excess, lifetime no claims bonus and your choice of repairer. Give our specialist insurance team a call or get your quote online today.
- New car if written off
- Yes - within 2 years of original registration
- Rental car after theft
- Yes - Up to 14 days, max $100 per day.
- Rental car after accident
- Not at fault - Yes. At fault - Optional Extra. Not at fault - Up to 14 days, max $100 per day. At fault - Up to 14 days, max $80 per day.
- Windscreen cover
- Yes - standard excess. Option to reduce excess for first windscreen claim each year to $0 for an additional premium.
- Modifications
- Covered only if agreed in writing.
- Young driver excess imposed
- Depending on state between $300 and $700 for listed drivers under 25, $1,500 for unlisted drivers under 25, $400 for inexperienced drivers over 25.
- Roadside assistance
- No
- Other benefits
- Lifetime No Claim Bonus available to customers who are over 25 years of age, have been insured with Bank of Queensland for 3 consecutive years on the maximum No Claim Bonus and have not had any penalty claims in those 3 years.
- Other restrictions
- -
Read our Mozo Review to learn more about Bank of Queensland Comprehensive Car Insurance
Comprehensive Car Insurance
- Monthly premiums
- Yes Costs Extra
- Choice of repairer
- Optional Extra
- Choice of excess
- $400 - $1,850 (varies By State)
- Agreed or market value
- Agreed Or Market
Available discounts
- No Claim Discount
CompareCompareComprehensive Car Insurance
Get car insurance you can count on with up to 40,000 Qantas Points when you join by 28 February. Make this the year you start enjoying more rewarding car insurance. Points awarded will be based on your premium. T&Cs & eligibility apply.
- New car if written off
- Yes - within 2 years and 40,000 km of original registration
- Rental car after theft
- Yes - Up to 14 days, max $1,000
- Rental car after accident
- Not at fault - Yes. At fault - Optional Extra. Up to 14 days.
- Windscreen cover
- Yes - standard excess. Option to reduce windscreen excess to $40 for an additional premium.
- Modifications
- Covered only if agreed in writing.
- Young driver excess imposed
- $600 for drivers under 21, $500 for drivers aged 21 to 24 inclusive, $600 for unlisted drivers, $500 for inexperienced drivers.
- Roadside assistance
- Optional Extra
- Other benefits
- Earn up to 40,000 Qantas Points when you sign up by 28 February 2021. Points earned depend on the amount spent on your premium. Points earn thresholds and T&Cs apply.
- Other restrictions
- -
Read our Mozo Review to learn more about Qantas Comprehensive Car Insurance
Comprehensive Car Insurance
- Monthly premiums
- Yes Costs Extra
- Choice of repairer
- No
- Choice of excess
- $800 - $2,000
- Agreed or market value
- Agreed
Available discounts
- No Claim Discount
CompareCompareComprehensive Car Insurance
Stella are changing the tune on car insurance, offering car insurance made especially for women. Features include no claim reward, new car replacement, customise your policy and more. Enter your car rego and get a quick quote online.
- New car if written off
- Yes - within 3 years and 60,000 km of original registration
- Rental car after theft
- Yes - Up to 14 days.
- Rental car after accident
- Not at fault - yes. At fault - Optional Extra. Up to 14 days.
- Windscreen cover
- Yes - standard excess. Option to reduce windscreen excess to $0 on every windscreen claim for an additional premium.
- Modifications
- Covered only if agreed in writing.
- Young driver excess imposed
- $600 for listed drivers under 25. $1,600 for unlisted drivers under 25
- Roadside assistance
- Optional Extra
- Other benefits
- -
- Other restrictions
- -
Read our Mozo Review to learn more about Stella Comprehensive Car Insurance
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