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How to Reduce Your Car Insurance Premiums

Car parked in a garage with roller down coming down

Car insurance is essential for protecting you and your vehicle in the event of an accident whenever you step behind the wheel. Car insurance premiums can vary in price depending on a number of different factors, but there’s a few different ways you may be able to reduce your premium and save yourself a few dollars.

How is your car insurance premium calculated?

Ever wondered how an insurance provider calculates your premium when you’ve sought out an insurance quote? There’s a whole stack of different factors that an insurer takes into account when deciding how much a premium should cost for a specific insurance policy.

Here’s some of the elements that some insurers may take into consideration when calculating your car insurance premium:

  • Driver’s age and gender: statistically speaking, young drivers are more likely to be involved in car accidents so they’ll often pay higher insurance premiums to account for the increased risk.
  • Driving record: your driving history plays a role in determining your premium, so if you’ve had no licence suspensions and haven’t lost points from your licence, you might be able to enjoy some savings on your premium.
  • Type of vehicle: higher premiums are usually associated with high performance and luxury vehicles. As a general rule, the more expensive your car is to replace if it were involved in an accident, the more expensive it is to insure.
  • Where your car is stored: whether your car is parked on the street, in a carport or garaged, the more secure the parking space, the lower the risk of something happening to your vehicle. Usually, more secure parking spaces will help to reduce premiums.
  • Area where your car is stored: some neighbourhoods pose a different level of risk to your car in terms of damage or theft. Lower risk areas will cost less to insure.
  • Level of excess: many insurers will let you choose your own excess, which is the amount you’ll have to pay out of pocket should you need to make a claim. The higher the excess, the lower the premium, but just make sure you could still cover the cost if you need to submit a claim.
  • Market value vs agreed value: the market value refers to how much your car would sell for on an open market at the time of making a claim, whereas the agreed value is a fixed amount that has been agreed upon by you and your insurer. Generally, the agreed value is higher than the market value, so you can expect to pay a higher premium with an agreed value car insurance policy.
  • How regularly you drive your vehicle: when you spend less time behind the wheel, you’re generally less likely to be involved in an accident which can help you to save on your car insurance premiums.

If you’ve sought multiple quotes in the past, you might have noticed that not all premiums come in at the same price. This is because not all insurers calculate premiums the same. Whether that’s because some providers include additional extras as standard or others require you to pay more for additional extras on top of the standard policy, you can always refer to the PDS to see exactly what you’re covered for and how the policy differs from other providers.

Types of car insurance

When it comes to car insurance, Youi offers three choices that provide differing levels of protection for you and your car. These are available in addition to compulsory third party (CTP) insurance, which is included in your registration fee in most Australian states and territories. If you live in NSW or SA, you can now get your CTP insurance or Green Slip through Youi.

CTP insurance doesn’t cover you for damage to a third party’s car or property, which is why it’s well worth taking out additional insurance to protect yourself and your back pocket. Here’s your options when it comes to insuring your car with Youi.

Third party property only

Third party property only is a step up from CTP insurance. This option protects you if you accidentally hit someone else’s car or property. With Youi, you’re covered for up to $20 million in legal liability, as well as temporary replacement car cover and counselling services after a claim. And if you’re hit by an uninsured third party, Youi will cover you for up to $5000 worth of accidental damage to your car.

Third party fire and theft

Third party fire and theft offers the next level of insurance coverage. In addition to protecting you in the event you’ve accidentally caused damage to someone else’s property, Youi’s third party fire and theft protects you against fire and theft.

Depending on the insurer, you might also be covered for a few extras like a hire car after theft, counselling services and even the contents in your car up to a certain amount. This differs across insurers and policies though, so check your PDS to see what’s included.


Last but not least is comprehensive car insurance. Youi’s comprehensive policy covers you for accidents, natural disasters, fire, theft and damage to someone else’s property. Youi’s comprehensive policy offers the highest level of protection out of our available car insurance options.

In addition to the items included as standard, a comprehensive policy might offer additional extras so that you can adjust the policy to better suit your needs. Some of the extras that might be on offer include things like hire car cover, cover for business items, choice of repairer or even contents cover for your campervan or motorhome.

Insurance cover tends to differ across providers and policies, so always read your PDS to understand how your policy works.

Tips for reducing your car insurance premiums

  1. Set your excess. Put simply, the lower the excess the higher the premium. Most insurers allow you to select your level of excess when you take out the policy, so if you’re keen to reduce your premium you can opt to pay a higher excess if you need to submit a claim.
  2. Select only the extras you need. Some insurance providers offer additional extras that you can opt in for on top of your base cover. These generally come at an additional cost, but they’re intended to suit your unique needs. Extra cover includes things like windscreen and glass, roadside assistance, contents inside the car, , and hire car following a not at fault accident. Some insurers, like Youi, include these extras as standard in their comprehensive policy, but other’s offer them at an additional cost. Terms, limitations and conditions apply so check your PDS to see what’s included in your cover.
  3. Shop around for the best deal. All insurers and policies are different, which is reflected in the price. If you choose to shop around for the best deal, make sure you’re still getting a policy that suits you. Check the PDS to make sure you’ve got the cover you need.

If you’re shopping around for a new car insurance policy or are looking to upgrade your existing Youi policy, check out our range of car insurance offerings.