- Australian motorists could save hundreds of dollars on car insurance premiums if they drive less than they used to because of the pandemic or general lifestyle changes.
- Adjusting the annual mileage on a car insurance policy can have a significant impact on costs, with premiums varying by as much as $454 a year, based on our analysis.
Australians stuck in lockdowns or spending more time at home could be wasting hundreds of dollars a year on outdated car insurance policies.
It’s obvious that driving less saves you money. However, while some might think about the savings they can make by needing less fuel, the value of keeping your car insurance policy updated can be easily overlooked.
A price comparison run by Compare the Market found car insurance premiums can vary by hundreds of dollars[1] on a single year’s premium depending on the annual mileage estimate.
Making the most of a tough situation
With sporadic pandemic lockdowns and more flexible work-from-home (WFH) arrangements, drivers are encouraged to check the annual mileage on their policy is still accurate, especially if they suspect they are driving less than in previous years.
In fact, new data from the Australia Bureau of Statistics (ABS) shows that working from home activity has steadily increased from March 2020 (23.6%) to June 2021 (37.4%).[2]
The same ABS study showed that a third of Australians indicated they want WFH arrangements to continue, which was the most desired activity brought on by COVID-19 restrictions alongside being able to spend more time with family and friends.
This was closely followed by the desire to spend less money and save more (29%) and wanting to spend more time at home (24%).
Driving less has a real impact on the cost of car insurance
Compare the Market’s analysis of car insurance premiums found that a Mazda CX-5 in Victoria with an annual mileage of 10,000km has a premium that is on average $257 cheaper than one where the mileage is given as 30,000kms.
The same comparison on a Toyota Hilux shows an even bigger difference of $297 on average. Should motorists dramatically reduce the number of kilometres they travel, savings up to $454 could even be possible, in this instance based on a Toyota Hilux in Victoria being driven just 5,000km instead of 50,000km.
While a long-term mileage reduction of 90% is unlikely for most people, even a relatively small change in circumstances could still result in notable savings. The research found that average premiums for a Ford Fiesta in New South Wales would be $65 a year cheaper if mileage is reduced from 10,000km to 5,000km. In Queensland, a Hyundai i30 that’s being driven 10,000km instead of 15,000km would attract an average premium that is $55 a year cheaper.
Compare the Market’s General Manager of General Insurance, Stephen Zeller, says Aussies should review their car insurance whenever they change jobs, work arrangements, or experience any other notable lifestyle changes.
“If you suspect the number of kilometres you travel in a week has reduced for whatever reason, you could be in a position to be paying much less for insurance,” Mr Zeller said.
“It’s important that when the time comes to renew or compare for a new policy, that you provide details that are as accurate as possible. Simply renewing a policy without checking it can mean you are throwing hundreds of dollars down the drain.”
However, Mr Zeller warned motorists to avoid making false disclosures about their likely mileage as this could impact the success of their claim.
Some of the biggest price differences between differing mileages are apparent for drivers in New South Wales and Victoria.
Average premiums for different car models in Queensland, NSW, Victoria, SA and WA:
QUEENSLAND (Surfers Paradise, 4217) | |||||
| Mileage (kms) | Mazda CX5 | Ford Fiesta | Toyota Hilux | Holden Commodore | Hyundai i30 |
| 5,000 | $765.06 | $600.32 | $838.86 | $644.32 | $607.45 |
| 10,000 | $818.09 | $642.09 | $894.72 | $688.59 | $650.66 |
| 15,000 | $891.05 | $696.87 | $963.98 | $745.56 | $705.70 |
| 20,000 | $931.83 | $732.35 | $1,010.81 | $783.64 | $742.07 |
| 30,000 | $998.89 | $789.82 | $1,081.37 | $844.88 | $800.22 |
| 50,000 | $1,030.97 | $819.51 | $1,118.76 | $876.53 | $829.90 |
NEW SOUTH WALES (Blacktown, 2148) | |||||
| Mileage (kms) | Mazda CX5 | Ford Fiesta | Toyota Hilux | Holden Commodore | Hyundai i30 |
| 5,000 | $1,071.37 | $861.89 | $1,155.77 | $918.60 | $879.99 |
| 10,000 | $1,145.14 | $926.86 | $1,236.67 | $981.12 | $942.45 |
| 15,000 | $1,258.07 | $962.82 | $1,352.33 | $1,055.63 | $1,015.82 |
| 20,000 | $1,289.96 | $1,046.70 | $1,403.10 | $1,104.19 | $1,062.81 |
| 30,000 | $1,383.18 | $1,120.09 | $1,505.66 | $1,181.66 | $1,137.42 |
| 50,000 | $1,432.77 | $1,159.67 | $1,559.06 | $1,223.09 | $1,177.09 |
VICTORIA (Craigieburn, 3064) | |||||
| Mileage (kms) | Mazda CX5 | Ford Fiesta | Toyota Hilux | Holden Commodore | Hyundai i30 |
| 5,000 | $1,163.50 | $940.13 | $1,272.36 | $1,000.01 | $962.92 |
| 10,000 | $1,250.04 | $1,011.32 | $1,367.30 | $1,073.75 | $1,034.17 |
| 15,000 | $1,378.04 | $1,087.25 | $1,499.18 | $1,151.00 | $1,112.06 |
| 20,000 | $1,405.34 | $1,137.60 | $1,551.03 | $1,205.33 | $1,164.67 |
| 30,000 | $1,507.52 | $1,218.20 | $1,665.23 | $1,290.66 | $1,247.36 |
| 50,000 | $1,564.74 | $1,263.85 | $1,726.97 | $1,338.40 | $1,293.20 |
SOUTH AUSTRALIA (Morphett Vale, 5162) | |||||
| Mileage (kms) | Mazda CX5 | Ford Fiesta | Toyota Hilux | Holden Commodore | Hyundai i30 |
| 5,000 | $696.37 | $564.69 | $753.07 | $589.17 | $571.61 |
| 10,000 | $751.49 | $587.65 | $812.75 | $635.05 | $617.00 |
| 15,000 | $825.30 | $660.48 | $888.27 | $687.32 | $669.19 |
| 20,000 | $855.85 | $694.66 | $928.98 | $722.95 | $704.25 |
| 30,000 | $923.63 | $749.08 | $992.56 | $779.10 | $759.31 |
| 50,000 | $959.08 | $779.36 | $1,027.85 | $810.00 | $789.44 |
WESTERN AUSTRALIA (Baldivis, 6171) | |||||
| Mileage (kms) | Mazda CX5 | Ford Fiesta | Toyota Hilux | Holden Commodore | Hyundai i30 |
| 5,000 | $539.79 | $437.47 | $588.05 | $436.57 | $439.57 |
| 10,000 | $581.38 | $470.72 | $632.43 | $461.47 | $473.57 |
| 15,000 | $640.04 | $504.67 | $691.80 | $527.72 | $493.02 |
| 20,000 | $652.09 | $529.75 | $714.00 | $553.91 | $532.64 |
| 30,000 | $702.51 | $570.15 | $769.46 | $595.84 | $573.16 |
| 50,000 | $732.70 | $561.44 | $802.72 | $621.14 | $597.15 |
Notes:
[1] Figures calculated by taking average prices of comprehensive car insurance policies for various popular car models on comparethemarket.com.au Assumptions: Cars manufactured 2016, colour white, parked in a garage, no financing, no hail damage, driver is a woman born in 1991, excess $900. Full list of assumptions available on request.
[2] Data taken from ABS: https://www.abs.gov.au/statistics/people/people-and-communities/household-impacts-covid-19-survey/latest-release
