It’s the question we’d all like answered: How much is car insurance in Australia? Or more specifically, how much could we be paying?
While there’s no simple answer, understanding the variables that go into calculating car insurance costs can help you to avoid surprises when it comes time to get a quote.
The amount you pay each month or year to insure your vehicle can vary widely depending on a range of factors, including the car you drive, where you live, your age and even your driving record.
In June 2023, Canstar analysis found the average annual premium for comprehensive car insurance ranged from around $800 to more than $3,000.1 Cover was also shown to generally be more expensive for people aged under 25, who paid more than $2,000 on average for comprehensive car insurance, while the average cost for drivers over 50 was less than half that.1 But even these figures may not apply to you.
“Different levels of cover differ significantly in price,” says Youi Head of Product – Vehicle, Marni Jackson. “Premiums can also differ between insurers depending on how they assess risk and the likelihood of claiming.”
So, how can you begin to understand what costs you might be in for? Below, we explore the factors that can influence what you might pay – including the different car insurance policies – to help you make more informed decisions about the policy that best suits you.
Why does the cost of insuring your vehicle vary so much?
“No two policies are exactly the same,” says Jackson. “So making a comparison of what you’re covered for, as well as the premium, is the way to go.
“When it comes to working out the cost of insurance, a lot of information is considered. Like your car details, who’s driving and where you live.”
1. Your car
The make and model of your vehicle may be taken into consideration when calculating your car insurance premium. Generally speaking, luxury cars can cost more to insure than cheaper models based on the estimated costs of repair or replacement if a vehicle is damaged or deemed to be a total loss.
Your car’s safety rating and any after-market additions to the car may also affect your premiums. Some insurers might even take the colour of your car2 into consideration.
2. Who’s driving
“Your driving history, whether you’ve had previous accidents, and when you got your licence is also taken into account,” according to Jackson. “If you have demerit points, it does increase your premium.”
Bear in mind that the age of listed drivers may also affect your premium costs, with younger drivers generally incurring higher premiums.1
3. Where you live
Canstar research found that New South Wales had some of the highest average costs for comprehensive car insurance, while Tasmania was among the lowest.1
If you live in an area with high crime rates, insurance companies could also deem you higher risk and adjust your premium accordingly – though if you keep your car secure and under cover, this may reduce the costs.
Your car, who’s driving and where you live can all contribute to the cost of premiums levied by insurers. Youi’s car insurance by make and model pages could provide an insight into potential costs and illustrate how particular cars, even within the same brands, can cost more than others.
The average annual Subaru WRX insurance cost, for example, is generally around 83% higher than other Subaru models Youi covers.3
What are the different types of car insurance and how do they compare in price?
This is where it can be a good idea to consider the level of protection you want, versus how much you’re willing to pay. Below, we’ve broken down the main types of car insurance based on the levels of cover they generally provide, but Jackson says that even within those, there are choices you can make to potentially reduce or increase the cost of insuring your vehicle.
“Your premium can be different if you choose an Agreed Value or Market Value,” says Jackson. These figures determine what you’ll get for your vehicle if it’s considered a total loss, with an Agreed Value generally leading to higher premiums.4
“If you choose a higher excess, the premium can be lower,” adds Jackson. A higher car insurance excess might mean you’ll pay more if you make a claim, but might help keep the cost of your car insurance premium down.
For more information on Agreed Value or Market Value, see Youi’s Car Insurance PDS.
Comprehensive car insurance
Youi’s Comprehensive car insurance is exactly that: comprehensive. It can help cover your vehicle for a wide range of damage caused by insured events, such as car accidents, theft, intentional damage, and fire and severe weather events. Where the insured event is a collision, it can also cover the damage caused by your car, as well as the damage to your car.5
Due to the range of situations it can cover you for, comprehensive car insurance will typically cost more than other types of car insurance that provide less protection.
When considering whether you need comprehensive car insurance, things to take into account might include how much it would cost to repair your car, whether your car is at high risk of weather damage, and how vulnerable it is to theft and intentional damage.
You can find more information on Youi’s Comprehensive car insurance here.
Third party fire & theft car insurance
Youi’s Third Party Fire & Theft car insurance can help cover you for accidental damage to, or loss of, your vehicle caused by a fire or theft. It can also cover your legal liability for damage to other people’s property caused by the use of your car.6
Generally speaking, third party fire & theft car insurance protects against less than comprehensive car insurance but more than third party property only.
When considering whether you need third party fire & theft car insurance, things to take into account might include whether you live or work in a neighbourhood with a high crime rate, or in an area with a high Bushfire Attack Level (BAL) rating.
You can find more information on Youi’s Third Party Fire & Theft car insurance here.
Third party property only car insurance
Youi’s Third Party Property Only car insurance is a basic level of cover that can help provide protection in the event you cause damage to another person’s car or property as the result of a motor accident. Typically speaking, it doesn’t cover damage to your own car caused by yourself or someone else unless the other driver is uninsured and certain conditions are met.7
If your car isn’t worth a lot of money and you can live without it, you may decide that third party property insurance is enough for you.
You can find more information on Youi’s Third Party Property Only car insurance here.
Compulsory third party (CTP) car insurance
Also known as a Green Slip in NSW,8 CTP insurance is the only type of car insurance that’s mandatory in Australia.
This type of insurance can help protect you against compensation claims made against you by anyone who is injured or killed as a result of a motor accident caused by you. Depending on which state you live in, it may be included in your registration costs or you might purchase it separately.
How much is annual car insurance?
Some insurers will allow you to choose between paying your car insurance premiums monthly or annually — though it may be the case it works out cheaper overall to pay your premium once a year, rather than every month. With Youi, paying monthly will usually cost a bit extra, but some people choose that option as it works better for their finances.
What does roadside assistance cost?
Roadside assistance provides professional assistance if you break down while driving your car. Some insurance companies offer it as an optional extra;9 at Youi, roadside assistance is included in all Comprehensive car insurance policies.10
Although there’s no simple answer to the question, “How much is car insurance?”, there are a range of options you can choose from depending on your needs and budget. If you’d like to learn more about these options, consider checking out Youi’s car insurance page for more information on the different levels of cover.
Article by guest writer Annette Sampson
1 Source: Canstar – How much does car insurance cost, 2023
2 Source: 9now – Car colour that makes for highest insurance bill, 2021
3 Indicative cost of average annual insurance premium for Subaru WRX is correct as of November, 2023
4 Source: Canstar – Car Insurance Market Value vs Agreed Value, 2023
5 Available with Comprehensive policies. See the Car PDS for details
6 Available with Third Party Fire & Theft policies. See the Car PDS for details
7 Available with Third Party Property Only policies. See the Car PDS for details
8 Source: NSW Government – What is a Green Slip?
9 Source: CHOICE – How to get the best roadside assistance plan for you, 2022
10 Youi Roadside Assist included with Comprehensive cover only. Exclusions, limits and additional fees may apply. Cover not available within first 24 hours of taking out, or upgrading to, Comprehensive cover. See the T&Cs and PDS for full details.