Which cars cost more to insure?  

Car insurance has seen the highest increase in over twenty years. With premiums rising, some cars cost more to insure than others.

March 2024 inflation data gathered by the Australian Bureau of Statistics (ABS) revealed that national insurance prices had risen by 16.4 per cent annually, the biggest increase in 23 years.

The reason behind the increasing costs is that new cars are more expensive to buy and are as expensive to repair. In conjunction with the rising inflation impacting the car industry and the higher risk of natural disasters, drivers now have to foot the bill for higher premiums.

Other factors impacting car insurance prices include:
– The type of car
– Address where the car is kept overnight
– Driver’s age
– Claims history
– Other drivers listed on the insurance policy
– Car modifications
– Value and age of the vehicle
– Condition and colour of the car

Generally, a clean driving record can lower a car’s premium when compared with a customer who has a poor driving record.

What types of cars tend to have higher insurance premiums?

Luxury cars

The higher cost of luxury cars contributes to the higher premiums. Coupled with the need for specialised replacement parts, which often need to be imported from far-flung places, the labour required to fix the car adds to the price.

Cars that are equipped with powerful engines can also contribute to higher insurance premiums due to the likelihood of an accident occurring.

Electric cars

Insurance premiums for electric vehicles (EVs) are typically 20 per cent higher than petrol cars. Expensive batteries and technological components contribute to the higher price and the limited supply of qualified repair centres.

While there are government incentives that can offset insurance costs and fuel savings of up to 70 per cent, the higher retail price for EVs ultimately contributes to these premiums. Depending on the brand and model of the EV, you may also be hit with the luxury car tax (LCT) therefore further driving up costs.

Large SUVs and off-roaders

Large SUVs with seven-plus seats and/or four-wheel drive will fetch a higher insurance premium due to their size and weight as they can cause more damage in an accident.

Upsizing from a medium SUV to a large SUV will significantly increase the risk of road trauma in an accident by roughly a third.

Large SUVs are considered the worst type of car to be involved in an accident with as the repairs involved are more expensive, hence why premiums are higher for these types of cars.

Dual-cab utes

Dual-cab utes are the most popular car type in Australia as seen with the consistently popular Toyota HiLux and Ford Ranger and their dominance in both the new and used car market. However, due to their popularity, there is also an increased risk of car theft, which drives up insurance premiums for these cars.

When it comes down to it, insurance costs are calculated on risk and statistics. Car theft has been extra profitable due to the increased demand for utes. Utes that are used by tradesmen are also highly sought after as they have valuable equipment in them.

Toyota HiLux thefts have been rife across the country that from August 2021 onwards new models coming to Australia were equipped with vehicle tracking technology and the feature to automatically contact emergency services in case of a crash.

The cancellation of Australia’s vehicle theft reduction taskforce in 2021, which saw a 60 per cent reduction in overall car theft during its 20-year run, led some experts to believe drivers would have to pay for the increased premiums.

Furthermore, whether the ute will be used for private or business use will also impact the insurance policy.

What cars are cheaper to insure?

On the flipside, common sedans and hatchbacks have lower insurance premiums as their parts are more readily available at competitive prices and more mechanics are qualified to repair these types of cars as they don’t require specialised mechanics or feature high-tech equipment.

Family sedans, station wagons, and minivans have a lower probability of being involved in a crash which means they’re cheaper to insure.

Insurance companies will look at a car’s historical data. If a certain model has been linked to a lot of claims previously, it might cost more to insure.