Average cost of car insurance: How much does it cost and how can you save?

Update: If you're after a current assessment of car insurance prices and trends in Australia, check out Mozo's 2020 Car Insurance Report.

With so many car insurance providers vying for your attention, it can be difficult to find the one that’s right for you. To make your search that much easier, each year we run the Mozo Experts Choice Awards^ to uncover the policies that are worthy of your attention.

For the 2019 awards our team of experts sifted through 61 policies, factored in more than 10,000 different scenarios, and surveyed close to 4,000 insurance customers in order to understand what makes for the best Aussie car insurance.

We compiled some of those findings below to help give you a clearer picture of how car insurance was priced across Australia in 2019, plus look at some of the ways you can save.

Key points

  • In 2019 Aussies were paying an average of $1,131 a year for their car insurance.
  • The difference between the most expensive and the cheapest insurance plan across Australia was $1,047 on average.
  • Things like age, gender and where you live factor very heavily in how much you pay. 

How much does car insurance cost in Australia?

If you’ve lived in a couple of different places across Australia, you’ll know the cost of car insurance varies depending on which state you live in. In the 2019 study, we found that those who live in Tasmania were paying the least on their premiums, dishing out an average of $846 each year. As for who was paying the most, that title went to Victorians, who were paying an average of $1,466 for theirs.

Average annual car insurance quote by state

There’s a world of difference between insurance plans out there, with an average of $1,047 separating the cheapest and most expensive plans in Australia. The difference was the least dramatic in Queensland, where it sat at $866, whereas those in the Northern Territory were looking at a difference of $1,742.

The most expensive vs the cheapest plan: what’s the difference?

What affects the cost of car insurance?

How much you‘ll pay for your car insurance will depend on a long list of factors, ranging from your age to the type of car you drive and whether you park it on the street or in a garage. Your car insurance provider will take all these details (and plenty more), estimate how much of a risk you pose, and set your premium accordingly.

How age affects your insurance quote

One of the things insurance companies take into account when pricing your premium is how long you’ve been driving. If you’ve been behind the wheel for years, that’s great. It means your provider will have plenty of information to draw from when deciding how much you’ll pay. 

But if you’ve only just come off your Ps, there’s very little for them to go off. Because of this, providers will make assumptions based on the behaviour of your demographic. And since younger drivers are overrepresented in road accident statistics, insurance providers tend to view them as a liability. That translates to much higher costs.

But just how much more are younger drivers paying? Our analysis found that the average quote for drivers aged 20 and under in 2019 was a staggering $2,061. Things got much cheaper at age 21, and continued to drop with age before picking up a bit for those aged 70 and above.

Cost of comprehensive car insurance by age

Gender and the cost of car insurance

The cost of insurance also differed among men and women, with men paying an average of $135 more than women.

To understand why this is the case, we need to look at things through the eyes of an insurance company. Generally speaking, men are more likely to engage in risky behaviour than women, including speeding and driving while drunk. And more incidents on the road mean more insurance claims.

There are a few other factors at play too, like the fact that there are more male drivers than female drivers, and that men are more likely to drive models that cost more to insure (insuring a Mazda may be different to insuring a Mercedes-Benz). But when it comes down to it, it’s hard to ignore the unflattering picture of men painted by the statistics.

Vehicle age

Just replaced your old set of wheels with a brand new model? Brace yourself for a spike in your premium. That’s because when insurance providers decide how much you’ll pay each year, they take into account the age of your vehicle. Cars that are two years old or younger will set you back the most, whereas older cars that have depreciated in value won’t cost as much to insure.

Ways to save on your car insurance policy

Compare policies: This one goes without saying: when you’re looking for a car insurance policy, it pays to shop around. As mentioned above, the winners in the Mozo Experts Choice Car Insurance Awards are a good place to start, but if you’re looking to hone in further, make sure to visit our car insurance comparison page too.

Buy online: Many insurance companies offer discounts to customers who purchase their policies online, usually between 5% and 15%. So if your search has led you to a car insurance policy that ticks all the boxes, check if there are savings to be made by applying online.

Bundle your insurance policies: Another way to save is by taking advantage of a multi-policy discount. By bundling your car insurance with your home and contents insurance, you could be looking at savings between 5% and 15%. 

Drive safely: Many car insurance companies offer no claims discounts to drivers that have a record of safe driving. The size of the discount tends to differ across states, but some will allow you to shave up to 70% off your insurance costs.

Opt for pay as you drive: A number of car insurance providers including Huddle, AAMI and Woolworths offer either a pay-as-you-drive or pay-per-km plan. With this type of policy you can pay less, for driving less. So if you're solely a weekend driver, this could be an option worth considering.

Car insurance comparisons on Mozo - rates updated daily

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*Terms, conditions, exclusions, limits and sub-limits may apply to any of the insurance products shown on the Mozo website. These terms, conditions, exclusions, limits and sub-limits could affect the level of benefits and cover available under any of the insurance products shown on the Mozo website. Please refer to the relevant Product Disclosure Statement and the Target Market Determination on the provider's website for further information before making any decisions about an insurance product.

^See information about the Mozo Experts Choice Car Insurance Awards