While inflation has recently slowed, its impact over the past year has significantly affected car ownership costs in Australia. In 2024, the average car insurance premium rose to $1,717, an increase of 16% compared to 2023.
This upswing aligns with the ABS findings, which indicate that insurance costs across various policies - encompassing all insurance types - spiked by 14% to 16% annually, depending on what quarter you’re looking at.
Our findings confirm that car insurance premiums are no exception.
In the following sections, we dive into an analysis of 295,346 car insurance quotes from 33 providers, collected for the Mozo Experts Choice Awards for Car Insurance 2024. We’ll examine the key factors like age and location that influence car insurance premiums. We'll also provide practical tips on how you can potentially lower your costs, even in the face of macroeconomic forces.
In a recent survey of 2,129 Australians aged 18 and over, nearly a third of respondents identified price as their top priority when selecting car insurance. So what exactly impacts the price of car insurance?
That’s what the rest of this report aims to uncover.
Car insurance premiums are more expensive for male drivers ($1,849) than for female drivers ($1,585), representing a 17% difference nationwide.
And while this gap decreases with age, it never fully disappears.
So while males under 20 years old pay 30% more than their female counterparts, males aged 70 and above narrow that gap a bit - paying only 10% more.
This gender gap is most pronounced in Tasmania, where males pay 20% more than females ($1,430 vs $1,188). The smallest gap is in the ACT, with only a 4% difference ($1,572 vs $1,510).
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VIC has become the only state to exceed $2k in average car insurance premiums, totaling $2,139 - making it the most expensive state in Australia.
NSW follows closely with an average premium of $1,994, while NT is not far behind at $1,892.
TAS' uncharacteristically low average premium of $1,301 is more than $200 cheaper than the next cheapest state, SA ($1,515).
Average premiums in SA, WA, QLD and ACT are all within $30 of each other.
Over time, your car insurance premiums can plummet significantly - especially if you don’t claim. Let’s look at three factors that can work together synergistically in your favour.
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Age is one of the major factors influencing car insurance premiums. Premiums consistently decrease over time as drivers gain more experience and (hopefully) mature. This downward trend continues until old age sets in around the age of 70. As you can see, drivers aged 20 and younger can pay 3x more than drivers 70 and older ($3,552 vs $1,222).
In the meantime, the longer you drive the same vehicle, the more you can save. As you can see below, there's a strong downward correlation between the age of your car and the price of your insurance.
Depending on the car's initial age, the cost of insurance can reduce by between 3% and 16% over a five-year period.
So as you age, your car ages. And you continue to save.
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The No Claims Bonus (NCB) can lead to substantial savings for those insured with providers that offer it.
Achieving the highest NCB rating of 1 after five claim-free years can halve your premiums compared to a new rating of 6 ($1,548 vs $3,221).
Despite most NCB discounts capping at 15%, they combine effectively with the age-related premium reductions we discussed earlier - especially when you're claim-free.
The most expensive cars to insure are often popular colors like black, white, and silver due to their high resale value—higher replacement costs for insurers mean higher premiums for you. Although you might pay more for insurance, the potential resale returns could outweigh these costs.
Contrary to popular belief, red cars, which cost less to insure at $1,636, aren't pricier due to speed-related assumptions.
Looking for the biggest savings? Choose brown, but be prepared for potential challenges when reselling.
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Instead of stating the obvious, such as Maserati insurance is more than 7.5 times more expensive than a Daewoo, we decided to look at what makes sense for the broadest market, by analysing the 10 best selling car brands in Australia.
Excluding Tesla (covered in our EV section above) Toyota is the most expensive brand in this list to insure. It costs 23% more to insure a Toyota, the most popular brand, compared to Subaru, which costs the least to insure and ranks as the ninth most popular brand.
Snagging a deal on car insurance is all about being smart with your choices. Here’s how to make sure you’re paying the lowest premium possible:
There’s no denying it’s been a tough year for car insurance. A 16% increase is no small thing, but there’s hope prices may start to level off as inflation begins to slow.
While some of these larger forces are out of your control, it doesn’t mean you have to just accept the hit.
As Mozo’s personal finance expert Rachel Wastell puts it, "Loyalty is costing Aussie drivers more than they realise, and as premiums continue to climb, staying with the same insurer could mean missing out on hundreds of dollars in savings."
So before your next renewal, take a closer look at your options—you might end up with a better deal and a bit more cash in your pocket.
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 2023 Mozo Car Insurance Report.
