Key takeaways
- Driver age, postcode, and vehicle type are the biggest premium drivers.
- A higher excess lowers premium but increases your cost at claim time.
- Comparing at renewal with identical inputs is the only fair price test.
Car insurance premiums reflect how likely you are to claim and how expensive those claims tend to be for your profile. Understanding the main pricing levers helps you compare policies without surprises — and spot ways to reduce your premium legitimately.
On this page
Driver age and experience
Younger and less experienced drivers pay more because statistically they claim more often. Drivers under 21 or 25 may face an additional age excess on top of the standard excess. A clean claims history and no-claim discount can significantly reduce premiums over time.
- Under 25 — typically highest premiums and additional age excess
- 25–60 — standard pricing for most insurers
- Over 60 — some specialist insurers cater to older drivers, but mainstream policies are often competitive
Vehicle, location, and usage
Your vehicle's make, model, and year affect repair costs and theft risk. Where the car is garaged overnight (postcode) is a major factor — urban areas with higher theft rates cost more. Annual kilometres and whether you use the car for commuting or business also influence pricing.
Cover structure and policy choices
Choosing a higher excess lowers the premium but increases out-of-pocket cost in a claim. Agreed value costs more than market value. Optional extras — hire car, choice of repairer, windscreen cover — each add to the annual cost.
Claims history, modifications, and usage
Insurers consider your claims history and may apply loadings for high-performance vehicles or undisclosed modifications. Using your car for rideshare, delivery, or business without declaring it can void cover. Loyalty does not always equal the best price — comparing at renewal with the same excess and inclusions is the fairest test.
Tip
What to avoid
Common mistakes that leave drivers under-protected or out of pocket.
- Under-insuring a financed vehicle — lenders typically require comprehensive cover
- Undisclosed modifications or rideshare use — can void a claim entirely
- Choosing an excess beyond what you can pay in an emergency
- Cancelling your old policy before the new one is confirmed in writing
- Comparing headline premium without matching excess and inclusions
General information only — not personal financial advice. Consider your own circumstances and read the Product Disclosure Statement (PDS) before purchasing any policy. Moneyhero may earn referral fees from some providers when you switch through us; this does not change how results are ordered. How we compare
Frequently asked questions
Straight answers about comparing in this category — what affects prices, how switching works, and how to read product documents before you decide.
Why did my car insurance premium go up at renewal?
Premiums can rise due to insurer-wide rate increases, changes in your risk profile (claims, address, vehicle), or the end of a promotional discount. Comparing with identical excess and cover at renewal is the best way to check if you are still getting a competitive price.
Does using my car for Uber or rideshare affect my premium?
Yes. Rideshare and delivery use is a different risk category. You must declare it to your insurer — standard private-use policies may exclude or void cover for commercial driving.
Will a higher excess always save me money?
A higher excess usually reduces the annual premium, but the saving varies by vehicle and insurer. Only choose an excess you can afford to pay in a genuine emergency.
Is it cheaper to buy car insurance online?
Many insurers offer online-only discounts. Comparing multiple quotes online with the same cover details is often faster and may surface lower prices than renewing by phone without shopping around.