6 Factors That Affect the Cost of Car Insurance in Australia

Not too long ago, the Australian car market industry was on the brink of shutting down, with Ford, General Motors, and Toyota announcing their intentions to shut down all their Australian car manufacturing plants. This closure has had far-reaching effects, including on car insurance costs, and to get the best, most affordable coverage, you need to shop around.

There are several factors insurers consider when coming up with the cost of car insurance. These factors include the type and color of the car you drive, age and gender, and driving history. Some of these factors can end up costing you more. 

Let’s discuss six factors that could affect your auto coverage premiums:

1. Vehicle make and color 

First, understand that no matter where you live or drive, new and expensive car models cost more to insure because they are likely to have costlier repair and maintenance services. 

In fact, according to research data from Monash University Accident Research Center, compared to white cars, colors with a lower visibility index are likelier to be in an accident. Thus, insurers may charge you a lower premium if you have a white car or one whose color is on the higher-visibility spectrum than one painted a darker shade.

2. Gender and Age

Age and gender are the other key factors determining how much you pay for auto assurance.

Statistically, male drivers are riskier to insure than women because the former is likely to be in car accident incidents, causing extreme and costly damage to the vehicle and property.

Similarly, younger male drivers under 25 years are more likely to get into accidents. Thus, male drivers aged 18-25 usually pay the highest auto-coverage rates. When you are 25 years and above, insurers start seeing you as less of a risk, and your rates start going down; this may be the case for everyone as it is one factor.

3. How often you drive 

Some companies offer cheaper rates for Australians who don’t use their cars often. 

For example, a pay-as-you-drive/per-mile policy can be a more affordable alternative if you don’t drive a lot. Plus, a rarely used car is less likely to be involved in an incident than a car used to commute regularly; thus, auto insurers will charge less to insure such a car.

4. Where you live and park your car 

You will get differently-priced auto policies depending on where you live because where you live influences other key things that car insurers look at, like the level of car theft, road accidents, and other collected data connected to the area.

A car parked in a secure garage or parking bay is at lower risk of incidents and is thus likely to have a cost-friendlier policy than a vehicle parked on the street. 

5. Auto Insurers 

The most outstanding factor affecting how much you pay for your car insurance is the company you decide to use. The most straightforward way to find cheaper coverage in Australia is to use iSelect to compare your options. 

Comparing your options will help ensure that no matter which auto insurer you use in the end, you will get the best deal that will work for you based on the kind of assurance and coverage you want. 

6: How you intend to pay

Most auto insurers have different packages, including monthly and annual —some may have other payment packages.

As you can imagine, paying for your policy on a month-to-month basis is likely to cost more than it would for someone who opts for yearly premium payments.


These six factors can significantly affect the cost of car insurance in Australia—and most other locations. The prices may rise or fall because of changes in your circumstances. Thus, keeping the insurer updated on any changes that might affect your premiums and claims is essential.