Australian drivers could be spending hundreds more on car insurance than they need to, according to new research by Compare the Market in what experts have labelled a “convenience catch”.
Quotes for a hypothetical Ford Ranger ute owner* could reduce around $184 (10.21%) on average by simply commencing their cover three weeks later compared to the same day.
Even purchasing a policy to start on the next day resulted in a $78 (4.33%) reduction in quoted premiums on average, while commencing one week later saw an average quoted premium reduction of $130 (7.19%) compared to starting the same day.
As for a Tesla Model Y driver*, starting a new car insurance policy three weeks later could shave a sizable $336 (9.73%) off on average the quoted premium – helping offset the generally higher cost to insure an electric vehicle.
Similarly, an example Toyota Corolla Hybrid owner* could claw back $75.83 (4.49%) by planning ahead and commencing three weeks later from the quoting day.
Average car insurance quoted premiums by commencement date
| Commencement Date | 2025 Ford Ranger XLT 4×4 Double Cab 2.0L Diesel Average Quoted Premium | Difference vs Same Day |
| Same Day | $1,810.88 | |
| Next Day | $1,732.45 | -4.33% |
| 1 Week Later | $1,680.67 | -7.19% |
| 2 Weeks Later | $1,680.67 | -7.19% |
| 3 Weeks Later | $1,625.94 | -10.21% |
| 4 Weeks Later | $1,625.94 | -10.21% |
| Commencement Date | 2025 Toyota Corolla Ascent Sport Hybrid hatch Average Quoted Premium | Difference vs Same Day |
| Same Day | $1,690.57 | |
| Next Day | $1,661.67 | -1.71% |
| 1 Week Later | $1,639.06 | -3.05% |
| 2 Weeks Later | $1,639.06 | -3.05% |
| 3 Weeks Later | $1,614.74 | -4.49% |
| 4 Weeks Later | $1,614.74 | -4.49% |
| Commencement Date | 2025 Tesla Model Y RWD Average Quoted Premium | Difference vs Same Day |
| Same Day | $3,461.73 | |
| Next Day | $3,323.43 | -4.00% |
| 1 Week Later | $3,221.89 | -6.93% |
| 2 Weeks Later | $3,221.89 | -6.93% |
| 3 Weeks Later | $3,124.95 | -9.73% |
| 4 Weeks Later | $3,124.95 | -9.73% |
Compare the Market’s Economic Director, David Koch, said the research was a wake up call for Australian motorists.
“Australians who don’t plan ahead and purchase car insurance to start immediately are often slugged with higher premiums,” Mr Koch said.
“This is because of ‘loadings’ put in place by some insurers to compensate for higher claims volumes.
“For example, new car owners could be initially unfamiliar with driving their new vehicle and insurers may take this into account when pricing for a policy to commence immediately. Additionally, insurers may consider there is a greater chance that a vehicle is already damaged, if the policy is commencing immediately.
“It pays to prepare but unfortunately lots of people are caught by these pricing policies unawares.
“Never wait until the last minute. The expert team at Compare the Market found substantial reductions in the tens – and in some cases, hundreds of dollars – on average by simply commencing a new car insurance policy the next day, a week or three weeks later.
“This all adds up to potentially cover – or at least offset – the cost of a full tank of fuel or battery recharge.
“Shop around as soon as you are looking for a new or used vehicle to see whether you can afford the ownership costs, and once you know when you’re getting the keys, it pays to purchase in advance.
“But don’t just pick the first insurer that appeals to you with their branding. Compare your options, consider whether a higher excess is appropriate for you, and if your circumstances permit, consider setting driver minimum age limits if the option is available.
“These are all levers to ensure the power is in consumers’ hands, not the insurers.”
Disclaimers
*Comprehensive car insurance policies were quoted across 10 insurers and five underwriters for three popular new car models: the 2025 Ford Ranger XLT 4×4 Double Cab 2.0L diesel, 2025 Toyota Corolla Ascent Sport Hybrid hatch, and 2025 Tesla Model Y RWD.
Premiums were quoted using Compare the Market’s car insurance comparison tool and other well-known insurance brands, based on the following commencement dates:
- 10 February 2025 (same day)
- 11 February 2025 (next day)
- 17 February 2025 (one week later)
- 24 February 2025 (two weeks later)
- 3 March 2025 (three weeks later)
- 10 March 2025 (four weeks later)
Quotes obtained for each date were averaged, and the differences were calculated against the same-day commencement date quote to uncover the average quoted saving.
The annual comprehensive car insurance policies were based on a targeted $900 excess for a 34-year-old male living in Alderley, Brisbane (4051) with market value coverage. Where an insurer did not offer a $900 excess option, the closest amount within $50 was selected. Where an insurer did not offer the market value option, the default agreed value amount was used.
We assumed the owner drives up to 15,000km per year (for private use or commuting to work only) with a clean driving history, parks in a garage, does not own a home, does not own another vehicle, and is employed full-time. All three vehicles had a white exterior colour, no pre-existing damage, and no options or modifications.
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For more information, please contact:
Henry Man | [email protected]
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