Most Kiwi households own one or two cars, so car insurance is a regular part of our annual expenditure. Car insurance is a competitive market out there, so invest some time to save yourself some money.
Firstly, gather the details of your car – make, model, year of manufacture, mileage and general condition. Then go shopping for quotes. Here are some ways to save yourself money:
How much is the premium?
Find out the total amount of money you will need to pay each year for your insurance – this will depend on the value of your car, your driving and claims history, your age, and the excess you are prepared to pay. You can save money by:
- Shopping around for competitive quotes
- Setting an agreed value for your car rather than a market value
- Not letting anyone under 25 years drive your car
- Getting reduced rates if you are over 55 years
- Trying hard not to make any claims, thereby preserving your “no claims” bonus
- Placing all your insurances with one company, and getting a package discount
- Keeping your vehicle garaged
- Having an alarm in your vehicle
- Choosing to pay one annual fee rather than monthly payments
- Paying a higher excess (see below)
What is the excess?
This is the amount you will pay if you make a claim.
Say your car was dented in an accident and the repairs will cost $2,000, then you must contribute a small amount of money to the panel beater yourself – say $400, and the insurance company will pay the balance of $1,600.
Most insurance companies will have a Standard Excess (about $300 or $400), but you can choose to pay a higher excess which will bring down the cost of your annual premium.
Lower Cost Insurance
If you are really strapped for cash, then you might want to look at cheaper insurance options, such as ‘Third Party, Fire and Theft’, which covers uninsured drivers damaging your car, fire, theft and you causing damage to other peoples’ cars or property.
Or you could cut it to the absolute minimum and just select ‘Third Party Only’. Just be aware that these two options will not cover damage to your car in the event of an accident – you would need to pay for repairs yourself.
Often you’ll find car insurance is so competitive now that you may as well pay a few extra dollars per month for full insurance.
A word of caution though – do not drive completely uninsured – the risks are just too great!