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Home Blog Car Insurance Premium : Why Are You Paying That Much?

Car Insurance Premium : Why Are You Paying That Much?

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Owning a car in Australia, you will have to have an insurance against your car to protect your investments. There are many different companies to choose from to have your car properly insured. There are many aspects that contribute on the dollar value of your car insurance premium. Followings are the main factors affecting the cost of your insurance.

1. The Younger the Better

Well this is obviously not the case with insurance. Insurance companies price their premium against calculated risk that a buyer could posses. Being a younger, it will put an extra risk point to your profile, hence younger driver will have to pay more on car insurance. The good news is as your become older, the premium is cheaper.

2. Your Place of Residence

Insurance companies' team have a list of places and suburbs in all Australia that have details on the suburb profile. They particularly are interested to know how safe is your suburb. If you live in an area where crime rates are known to be high, so does your insurance premium. Why? well because the chance of your car being stolen is much higher.

This premium will be higher if you park your cars not in a closed and secured parking area.

3. What you drive

The next one comes down to the type of car you drive. If you drive a sports car that is built for speed, you will probably be paying a higher insurance. Some features of your car can affect your premium cost too. A car alarm installed in your car, will probably bring down your premium cost. A car alarm will slash some risk points off your profile, as the companies see it as added security hence reducing the car being stolen.

4. How you drive

If you are using your car mainly for general commuting purposes, you will pay lower premium compared to when you are using your car heavily for your job purposes. If your job demands you to drive long distance often, this will likely increase your premium as your car would have a greater chance of being broken down.

5. Your driving experience

Beginner drivers will have to pay more for premium insurance, as they posses greater risk of collision when compared to experienced drivers. Does that mean being an experience driver, you will pay a lower premium? The answer depends on your driving history too, if you have a squeeky clean records and never claim on insurance, then yes it means cheaper premium. However, if you claimed your insurance in the past, and worse you are at fault, this will guarantee a more expensive premium.

Having knowledge on what factors affect your premium can help you decide which type of car to buy in order to avoid any shocks from insurance bill.

When you're ready to get car finance, give our friendly Sydney Car Loans office a call on 1300 856 846.