When it comes to car insurance, Australians are no strangers to the hunt for a good deal. But what if the secret to savings was hidden not in the fine print, but in the timing of your policy commencement?
Recent research by Compare the Market has unveiled a ‘convenience catch’ that could be costing Australian drivers hundreds of dollars more than necessary.
This ‘convenience catch’ stems from insurers applying ‘loadings’ to premiums for policies that commence immediately. The rationale? A new car owner may not be as familiar with their vehicle, potentially leading to higher claims volumes. Insurers may also factor in the possibility that a vehicle requiring immediate coverage could already be damaged.
The research, which involved obtaining quotes for three popular new car models—a 2025 Ford Ranger XLT 4×4 Double Cab 2.0L diesel, a 2025 Toyota Corolla Ascent Sport Hybrid hatch, and a 2025 Tesla Model Y RWD—revealed a surprising trend. By simply delaying the start date of their car insurance policy by three weeks, drivers could see an average reduction of 10.21% for the Ford Ranger, 4.49% for the Toyota Corolla Hybrid, and a significant 9.73% for the Tesla Model Y.
David Koch, Economic Director at Compare the Market, emphasises the importance of planning ahead. ‘Australians who don’t plan ahead and purchase car insurance to start immediately are often slugged with higher premiums,’ he warns. The data suggests that even opting for a policy to start the next day can lead to a 4.33% reduction in quoted premiums on average.
The implications of these findings are significant, especially when considering the rising costs of vehicle ownership. The savings gleaned from a delayed policy start could cover, or at least offset, the cost of a full tank of fuel or an electric vehicle battery recharge—expenses that are all too familiar to drivers.
So, what can you do to avoid the ‘convenience catch’? Here are some tips:
1. Plan ahead: As soon as you consider purchasing a new or used vehicle, start shopping around for insurance to understand the ownership costs fully.
2. Compare options: Don’t be swayed by branding alone. Use comparison tools like Compare the Market to review different insurers and find the best deal for your needs.
3. Consider excess: A higher excess might lower your premium. Assess whether this is a suitable option for you.
4. Set driver limits: If your circumstances allow, setting a minimum age limit for drivers on your policy could lead to further savings.
5. Delay policy start: If possible, delay the commencement of your policy by a week or more to take advantage of lower premiums.
The research conducted by Compare the Market serves as a wake-up call for motorists across Australia. It’s a reminder that when it comes to insurance, the early bird doesn’t always catch the worm. In fact, a little patience and strategic planning could see you keeping more money in your pocket.
Remember, the power is in your hands as a consumer. By being aware of the ‘convenience catch’ and taking proactive steps to avoid it, you can ensure that you’re not just settling for convenience at the cost of your hard-earned cash.
So, before you rush to insure your shiny new vehicle, take a moment to consider the commencement date of your policy. It might just be the key to unlocking significant savings on your car insurance premiums.
Have you tried delaying a policy start date before? What helps you decide when and how to lock in coverage? What other small changes have helped you cut costs effectively? Feel free to share your thoughts or experiences in the comments.
Disclaimer: Comprehensive car insurance quotes were obtained for three popular 2025 models—the Ford Ranger XLT, Toyota Corolla Hybrid, and Tesla Model Y—using Compare the Market’s tool and other insurers. Data was sourced from 10 insurers and five underwriters, analysing policies with varying start dates between 10 February and 10 March 2025. Average premiums were calculated based on a 34-year-old male in Alderley, Brisbane, with a $900 excess (or closest available), market value, or default agreed value coverage, driving up to 15,000km annually for personal or commuting use. Assumptions included no prior claims, no home or additional vehicle ownership, and full-time employment. All vehicles were white, unmodified, undamaged, and parked in a garage.
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