Can you estimate the cost of car insurance before you buy?


Buying a car is usually quite an exciting experience, even though it may take a fair bit of looking around to find ‘the one’. In the midst of all the test drives and online searches, it can be easy to forget about the extra costs that can come with buying a car – like stamp duty, servicing and, of course, car insurance. And while these aren’t necessarily exciting things to think about, they could affect your budget and potentially change your thoughts on the type of car you end up purchasing.

Because of this, it can be useful to estimate how much your car insurance will cost before you buy your next vehicle. You can’t really go off what your car insurance has cost in the past, since there are so many things that can affect premiums on a new vehicle.

So what exactly do you need to think about when estimating the cost of your new car insurance? And how can you go about getting an estimate and choosing the right insurance to suit you? Here, we look at the different factors that may play into estimating the cost of your car insurance.

Things that can influence car insurance costs

Cost of the car

Most insurers use the value of a car as a rating factor, meaning that if your car is more expensive, you may have to pay a higher premium. That’s because if your car is involved in an accident, your insurer may need to pay considerably more to repair or replace an expensive car.

Cost of repairs or parts

Even if the car you purchase isn’t very expensive, if it’s a model that’s particularly difficult to find parts for, you’ll probably have to pay a higher premium to insure it. This is the case for cars that are imported, unique or specialised, meaning their parts are difficult to obtain in Australia.

Age of the car

Very new cars will often come with a higher premium due to their cost and difficulty to find parts for repairs, and the same goes for older cars – as in ones with hard-to-find parts, or classic models.

Safety features

Cars with advanced safety features, such as reverse cameras or anti-theft systems may come with cheaper premiums, as your insurer may find them less likely to be involved in an incident or harder to steal. Of course, these safety features have added benefits for you too, so they could be well worth consideration when buying a car regardless of how they affect your premium.

Driver details

Your car insurance may also be affected by who’s driving the car (yep, that’s you!). If you’re under 25 or have had your licence for less than 2 years, you may need to pay a higher excess if you’re in an accident. Your driver history will also be taken into account when your excess is calculated. You need to list all drivers who will regularly drive the vehicle on your insurance application, so take into account the details of other drivers and how they may affect your car insurance cost, too.

Where you live

Where you store your car (i.e. your address), as well as the location you live in may also affect how your insurer calculates your premium. Certain suburbs have higher crime rates or accident rates, so this may factor into how much you pay.

Deciding on car insurance that’s right for you

The cost of your car insurance premium will depend on what sort of cover you go for. Third Party Car insurance, for example, only covers damage to another person's car or property caused by the use of your car.​ Beyond this, you can also consider adding Optional Covers to your policy like Roadside Assist, Windscreen and Window Glass Cover, and more.

Consider your excess

It’s not just the cost of your premiums that you should think about, but also how much excess you may need to pay if you’re involved in an accident and have to claim. This could be more than your standard excess if the driver is under 25, inexperienced or not listed on your policy. AAMI offers the option of Flexi-Premium Excess, which allows you to lower the cost of your premium by paying a higher excess if you need to claim.

By considering all of these factors, you can put yourself in a better position to make the right decision for you and your needs (not to mention your budget). If you’re ready to get an estimate, you can do so online with AAMI without having to actually own the car yet. All you need to know is your own details, information about the vehicle model and make you’re looking at buying, and where you’re planning on parking the vehicle each night. See what you could save with a quick, online quote.

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Insurance is issued by AAI Limited ABN 48 005 297 807 trading as AAMI. AAMI Car Insurance. Please read the relevant Product Disclosure Statement before you make any decision regarding this product. The Target Market Determination is also available.