Car Insurance in Australia 2025 – Best Tips to Save Big on Premiums

Introduction: Why Car Insurance Still Matters in 2025

Whether you're buying your first car, upgrading your ride, or simply reviewing your expenses, car insurance remains one of the biggest recurring costs of owning a vehicle in Australia. With insurance premiums fluctuating year to year—and 2025 being no exception—Aussie drivers are seeking smarter ways to reduce their insurance bills without compromising on coverage.

This guide will walk you through everything you need to know about saving money on car insurance in Australia in 2025, including:

• Types of car insurance in Australia
• What affects your premiums
• New cost-saving options in 2025
• Expert tips to reduce your bill
• Choosing the right insurer and coverage
• Frequently overlooked discounts
• Policy traps to avoid

Let’s steer your insurance spend in the right direction.

1. Types of Car Insurance in Australia – Know Your Cover

Before diving into savings, it’s important to understand the four main types of car insurance policies in Australia:

a. Compulsory Third Party (CTP) Insurance

• Also known as a Green Slip (especially in NSW)
• Mandatory for registering your car
• Covers injury or death to others in an accident caused by you

CTP Tip: Prices vary by provider. In NSW, use the State Government’s CTP comparison tool.

b. Third Party Property Insurance

• Covers damage to other people's vehicles or property
• Does not cover your own car
• Often the cheapest optional cover

c. Third Party Fire and Theft Insurance

• Includes Third Party Property
• Adds protection if your car is stolen or damaged by fire

d. Comprehensive Insurance

• Covers damage to your car and others’—even if you’re at fault
• Also includes fire, theft, storms, floods, and vandalism
• Highest level of protection (and usually the most expensive)

2. Factors That Affect Your Car Insurance Premium

Understanding what goes into your premium can help you take steps to reduce your costs.

a. Age and Gender

• Young drivers (under 25) often pay the most
• Statistically, males under 25 are more expensive to insure

b. Driving Record

• Clean driving record? Insurers love it.
• Demerit points, speeding fines, or past claims can spike your premium

c. Car Make and Model

• Expensive, high-performance, or frequently stolen cars = higher premiums
• Safe and low-risk vehicles like hatchbacks and small sedans cost less to insure

d. Usage Type and Distance

• Using your car for business? Expect to pay more.
• Some insurers now reward low-kilometre drivers with usage-based discounts

e. Location

• Metro areas = more traffic = more risk = higher premiums
• Rural or regional? You’ll likely pay less

f. Where the Car Is Parked

• Garage > Driveway > Street
• Secured overnight parking can lower your rate

g. Your Excess Choice

• Higher excess = lower premiums (but more out-of-pocket during claims)

3. Car Insurance Trends in 2025 – What’s New?

2025 has brought several notable shifts in Australia’s car insurance landscape:

a. Telematics & Usage-Based Insurance

• Devices or apps track your driving behaviour
• Safe drivers get big premium discounts
• Popular with under-30s and city commuters

b. EV-Specific Insurance

• Specialised policies for electric vehicles
• Covers battery degradation, charging equipment, and home EV charger damage

c. Flexible Subscription Policies

• Monthly insurance plans with no lock-in contracts
• Great for short-term vehicle ownership or lease cars

d. Insurer Tech Platforms

• AI-powered chatbots, instant online claims, and app-based policy management
• Less overhead = more savings passed to customers

4. How to Save on Car Insurance in 2025 – 20 Expert Tips

Let’s get to the good stuff: how to reduce your premium.

✅ 1. Compare Policies Every Year

Don’t auto-renew. Use online comparison tools like Compare the Market or iSelect.

✅ 2. Bundle Multiple Policies

Combine car insurance with home, contents, or life for multi-policy discounts.

✅ 3. Increase Your Excess

If you rarely claim, opt for a higher excess and reduce monthly premiums.

✅ 4. Pay Annually

Avoid monthly instalment fees—save up to 10% by paying upfront.

✅ 5. Maintain a Clean Driving Record

A clean slate can shave hundreds off your annual premium.

✅ 6. Choose a Low-Risk Vehicle

Cars like the Toyota Corolla, Mazda CX-5, and Hyundai i30 attract lower premiums.

✅ 7. Avoid Modifications

Aftermarket mods (e.g., turbochargers, body kits) raise risk and premiums.

✅ 8. Park Securely

Garage or off-street parking? Let your insurer know—you’ll pay less.

✅ 9. Use Dashcams

Some insurers offer discounts if you install a dashcam.

✅ 10. Consider Pay-as-You-Drive Policies

Especially if you drive under 10,000km/year.

✅ 11. Skip Optional Extras You Don’t Need

Windscreen cover, hire car after an accident, roadside assist—opt-in only if necessary.

✅ 12. Ask for a Loyalty Discount

Been with the same insurer for years? Negotiate a better deal.

✅ 13. Use a Broker

Insurance brokers may get access to deals unavailable to the public.

✅ 14. Take a Defensive Driving Course

Some insurers reduce premiums for certified safe driving courses.

✅ 15. Be Honest on Your Application

Incorrect information can lead to denied claims or cancelled policies.

✅ 16. Join an Auto Club

NRMA, RACV, etc. often have partnership discounts with insurers.

✅ 17. Install Security Features

Steering locks, alarms, GPS tracking = less risk, lower premiums.

✅ 18. Limit Young Drivers

List only necessary drivers under 25—or risk being charged more.

✅ 19. Reduce Annual Kilometres

Driving less? Report it accurately to get a lower rate.

✅ 20. Switch to an EV or Hybrid

Some insurers offer discounts for eco-friendly cars.

5. Comparing Car Insurers in Australia – 2025 Standouts

Here’s a quick look at top-rated car insurers in Australia 2025 (based on user satisfaction, pricing, and features):

6. Common Insurance Mistakes to Avoid

❌ Not Reading the PDS

Always read the Product Disclosure Statement—know exactly what you’re covered for.

❌ Over-Insuring Older Cars

A 10-year-old Toyota Yaris doesn’t need full comp. Save with Third Party Fire & Theft.

❌ Not Updating Your Details

Moved house? Changed your parking? Update your insurer or risk claim rejection.

❌ Making Too Many Claims

Frequent small claims can make your premiums skyrocket or lead to policy cancellation.

❌ Assuming Loyalty = Reward

Insurers reward switchers more than stayers. Always review annually.

7. Should You Use a Car Insurance Comparison Website?

Yes—but with caution. These tools are excellent for initial comparisons, but not all insurers are listed. Be sure to cross-check individual providers for hidden deals or region-specific promotions.

Recommended comparison sites:

• Compare the Market
• Canstar
• iSelect
• Finder
• Mozo

8. Final Word – Stay Smart, Stay Insured

In 2025, the car insurance landscape in Australia is evolving rapidly. While premiums are rising for some segments (young drivers, EV batteries), there are more ways than ever to cut costs without losing peace of mind. Whether you're in Sydney traffic or cruising the Nullarbor, taking time to evaluate your insurance needs can save you hundreds every year.

FAQs

Q: What’s the cheapest car insurance in Australia in 2025?
A: It depends on your profile. Budget Direct and Bingle are top picks for basic coverage, while AAMI and NRMA balance price with strong support.

Q: Can I switch car insurers mid-policy?
A: Yes. Most policies allow cancellation with a pro-rata refund, minus a small admin fee.

Q: Are electric vehicles more expensive to insure?
A: Not necessarily. While repair costs are higher, some insurers offer eco-discounts for EVs and hybrids.

Q: Is it worth paying extra for roadside assistance?
A: Only if it’s not already included in your auto club membership or credit card perks.