A comprehensive car insurance policy can be quite expensive if you own a vehicle in Australia – and the price is getting steeper.
New Mozo research reveals Australians are paying 47% more than they did five years ago, surging to an average cost of $1,472 per year ($123 monthly).
Four in five drivers (80%) told Mozo their car insurance premiums increased in the last year – and a third (34%) said they increased between $120 and $600 a year.
However, Mozo’s research also found that the price of a car insurance policy can vary significantly between states and territories, driver profiles, and vehicle types.
Younger male drivers tend to pay much more than older female drivers. Even car colour, age, and model can impact costs. No factor is too trivial to consider when applying for coverage.
So, what do you need to know to save on your car insurance policy?
Men remain risky drivers
Mozo found that annual car insurance premiums continue to be more expensive for male drivers ($1,578) than female drivers ($1,358).
This may be due to a number of factors. Statistically, Australian men are more likely to take risks on the roads and get into car accidents, accounting for nearly 55% of driver deaths and serious injuries from road accidents in NSW between 2015 and 2019.
Since more accidents mean more claims, men tend to pay higher premiums.
Young drivers pay the highest prices
According to Mozo’s research, young drivers under 20 pay much higher annual car insurance premiums ($2,855) than older drivers over 70 ($1,051).
The difference is especially stark along gender lines, with young male drivers copping the highest costs of any driver demographic.
| Female | Male | |
| Young driver | $2,488 | $3,233 |
| Old driver | $982 | $1,112 |
However, this difference could be less about age and more about driving experience and statistical risk. Older drivers usually have longer claim-free histories than younger drivers, which can significantly lower premiums.
Bigger population, bigger premium
Car insurance premiums vary enormously by Australian state and territory, Mozo found. On average, Victoria ($1,817) and NSW ($1,717) have the highest yearly premiums.
Surprisingly, the Northern Territory ($1,685) is also at the high end, but wet season flood risk can partially explain this.
States with smaller populations – and thus fewer drivers on the road – tend to be cheaper, such as Tasmania ($1,183) and Western Australia ($1,264).
Queensland ($1,285), ACT ($1,310), and South Australia ($1,295) make up the middle of the road for car insurance costs.
Location, location, location
Where you park your vehicle affects your car insurance costs. Parking it in a secure location, like a carport or garage, can bring down your premium. On-street parking is the most expensive.
| Location | Average annual premium |
| Carport | $1,449 |
| Garage | $1,468 |
| Driveway | $1,500 |
| Street | $1,535 |
This is because cars in secure locations are less likely to be stolen or damaged.
Green with envy
The cost of car insurance can also vary by the colour of your car. Black ($1,564), silver ($1,486), and white ($1,460) cars were the most expensive to insure. Typically, these are amongst the most popular car colours and tend to have solid resale value.
Green-coloured cars were the cheapest to insure, at an average of $1,373 per year.
| Car colour | Average annual cost |
| Green | $1,374 |
| Red | $1,415 |
| Yellow | $1,419 |
| Blue | $1,424 |
| Brown | $1,433 |
| White | $1,460 |
| Silver | $1,486 |
| Black | $1,565 |
Name is the game
The make of your car also impacts insurance. Cheaper brands are often cheaper to insure on average. However, some of the more popular brands, like Toyota, Kia, Mazda, and Ford, all cost between $1,340 to $1,545 annually to insure on average.
Obviously, high-end makes will run up the cost of your car insurance, with brands like Rolls Royce being the most expensive cars to insure in 2023 at an eye-watering car insurance quote of $8,806.
Just a number on your bill
New cars cost more to insure due to their value.
Most comprehensive car insurance policies only offer new-for-old replacements on cars less than two years old or that have driven less than 50,000 km.
As cars age, their yearly premium typically decreases.
A brand new car costs $1,731 on average per year to insure. Between 0 to 4 years, car insurance premiums tend to drop. However, premiums can begin to rise slightly at around the 5.5-year mark. After that spike, the downward trend continues.
Once cars reach the age of about 11, car insurance costs take a sharp dive. According to Mozo’s data, cars between 10 to 11 years old cost $1,501 to insure, but cars between 11 to 12 cost about $150 less to insure, at $1,349 per year on average.
The cheapest cars to insure are those over the age of 20 years old, at an average annual cost of $906. That being said, older cars tend to have more mechanical problems and fewer safety mechanisms, so the cost might outweigh any potential savings.
Save the planet or your money?
Electric vehicles (EVs) are generally the most expensive fuel type to insure, at an average annual premium of $2,517. In fact, EVs beat other fuel types by a country mile in annual price.
Hybrid vehicles were the second most expensive to insure, at $1,816 per year ($700 less than EVs).
The cheapest vehicle to insure by fuel type is a standard petrol car, with an average yearly premium of $1,380.
| Petrol cars | $1,380 |
| Diesel cars | $1,655 |
| LPG cars | $1,788 |
| Hybrid cars | $1,816 |
| Electric cars | $2,517 |
EVs and hybrids are becoming increasingly popular, but current high purchase and insurance costs will need to come down to ensure better value and accessibility for drivers.
Hypothetically, who might pay the most and least for car insurance?
If we take the most and least expensive averages from Mozo's data, we can paint a picture of some hypothetical car insurance customers.
It’s important to remember that there are a range of factors that influence how your car insurance provider calculates your quote, both to do with your vehicle and who is driving it.
Ben is a young man under the age of 20, who drives a brand new, black, electric Rolls Royce, which he parks on the street outside his home in Victoria. In this scenario, Ben’s car insurance premium would be a hefty $3,169 per year.
Susan is an older woman, over the age of 70, who drives a 21-year-old, bright green, petrol-powered Chery that she parks securely in her carport at home in Tasmania. In this scenario, Susan’s car insurance premium would total about $1,111 yearly.
Reduce your risk
Car insurance providers choose your car insurance cost based on your risk. Risky drivers pay more because they are more likely to claim (i.e. cost the provider money), whereas safer and low-risk drivers pay less.
Therefore, the best tip for saving money on comprehensive insurance is to reduce your financial risk as a driver. This can mean:
You can also seek out discounts, such as multi-insurance discounts, online discounts, or even no-claims discounts, to cut the cost of your premium.
Don’t accept the loyalty tax
Australians are paying 50% more since 2018, so if you’ve had a car insurance policy in the last five years, the amount you pay each year has probably gone up, too.
Car insurance providers may offer new customers a better deal, in the form of online sign-up discounts, while the premiums of existing customers get jacked up each year. This is colloquially known as the ‘loyalty tax’.
Unless you’re madly in love with your car insurance policy, most of us would prefer to avoid paying more each year for the same cover. So, how can you avoid loyalty tax?
If you like your current car insurance policy and don’t think there’s a new policy out there that works for you and your needs, then your first option is to contact your provider and tell them you’re considering switching. They may offer you incentives to stay, as they don’t want to lose a customer to a competitor.
Your second option is to actually go through with switching your car insurance to a cheaper policy that fits your budget and needs. When you compare car insurance with Mozo, you’ll see an overview of each policy’s key features, and whether they’re offering any sign-up deals for new customers, at a glance.
While you can’t change a lot of the factors that car insurance providers use to calculate your premium, like your age (as much as many of us would like to), you can compare car insurance policies to see if you can save by switching, or find ways to mitigate your overall risk and get the cheapest car insurance.
“Car insurance is often seen as a ‘grudge purchase’ as rewards aren’t realised until something goes wrong, but insurance should be seen as an investment,” says Mozo money expert Rachel Wastell.
“Comparing the finer details of policies to get the cover you actually need means if something does go wrong, you’re not scrambling to find hundreds or thousands of dollars to cover the unexpected costs.”
Keen to get the best price on your car insurance? Check out our car insurance comparison hub to see if you could switch & save.
Head to the best car insurance in Australia for an overview of some award-winning policies. You can also catch last year’s data in the 2022 Mozo Car Insurance Report.
For the purposes of this report, Mozo experts compared 10,000 different car insurance quotes and scenarios to calculate the average cost of car insurance in 2023.
To further investigate rising costs of insurance premiums, Mozo.com.au commissioned a nationally representative consumer research survey via Researchify, surveying 2,141 Australians, aged 18 years and over, from 30th August to 11th September 2023.