Car Insurance

In the past five years the number of motorists who have chosen to pay extra excess to get a cheaper premium has more than doubled.According to Budget Direct figures, it has gone from 8 per cent to 17 per cent which is still low, but an indication that motorists are seeking to pay less in these tough economic times.Spokesperson Richelle Ward says 90 per cent of motorists are also taking advantage of policy discounts by restricting the age of drivers, 71 per cent are cashing in on discounts for fitting car alarms and immobilisers and 79 per cent are reaping the rewards for having a good driving history.The number of discounts for having an anti-theft immobiliser and/or car alarm has grown 18 per cent over the past five years, mainly due to more new vehicles being fitted with them as standard.Ward says the results show the current economic climate has forced many to reduce insurance premiums."Restricting who drives your car is a popular choice because younger drivers are a higher risk for having an accident so they do cost more to insure," she says.Budget Direct figures show that a provisional driver is twice as likely to claim as a driver who has held their full licence for more than two years.Receptionist Kay Fisher, 25, has restricted the age of drivers of her 2001 Mitsubishi Mirage to reduce her insurance premium."No one younger than me can drive my car for very good reasons," she says. "I don't have anyone in the household under 25 since I turned 25 in August."She also hasn't made a claim in the past five years which keeps her premium down. However, her car doesn't have an alarm or immobiliser and she isn't planning to fit one as she keeps the car in a locked garage most of the time."Where we live it is quite safe, but I am a bit concerned about it in rooftop parking at work," she says.Ward says another dollar-saving avenue gaining in popularity is the option to increase the excess fee to reduce the premium."While we've seen this option advertised more heavily in recent years it really depends on your financial situation as to whether this is a good idea," she says."Increasing your excess to $1000 might reduce your premium at the time of signing on but not all consumers may have that amount of cash on hand in the event of an accident."Without a vehicle to get to work a consumer could land themselves in further financial difficulty, highlighting how important it is to find the right policy for you."Other ways motorists can reduce premiums is to shop around and provide as much information as possible about their vehicle such as whether it is kept in a locked garage and its usage.INSURANCE HABITS CarsGuide does not operate under an Australian financial services licence and relies on the exemption available under section 911A(2)(eb) of the Corporations Act 2001 (Cth) in respect of any advice given. Any advice on this site is general in nature and does not take into consideration your objectives, financial situation or needs. Before making a decision please consider these and the relevant Product Disclosure Statement.

... or face a long wait for a more expensive replacement car.Motor Trades Association of Queensland spokesman Richard Payne predicts about 7500 vehicles will be written off by insurers in the Queensland floods, alone."Those vehicles will have to be replaced, but insurance companies corrall the vehicles and inspect them en masse which will take time," he said.  "It's suggested that you get in early, because there may be shortages when the demand on new and used cars hit, although I don't think it will come in a burst," he said.Motor Trades Association of Australia spokesman Colin Duckworth said there were no reports of dealers in Queensland, NSW or Victoria losing much stock in the floods.  He said the slowly rising floodwaters gave dealers enough notice to move their vehicles out.Payne said he did not expect price rises on new cars in the wake of the floods.  "The strong dollar and the competition will keep prices competitive, particularly with new vehicles, but there may be some increase in the price of used vehicles."Federal Chamber of Automotive Industries chief executive Andrew McKellar was reluctant to speculate on whether the demand for replacements for flood-damaged vehicles would be good for the industry."We haven't made an assessment yet. We acknowledge there are other urgent matters that people are dealing with first," he said.  "It's in the hands of the insurers at the moment, and we would be hopeful that the assessmment process would move forward quickly."The enterprising Lancaster Motor Group of Newcastle has offered to fly Queensland flood victims for free to pick up their second-hand or new car, or provide discounts to have their vehicle transported home.  They will also donate $100 for each vehicles sold under the offer to the Lifeline Queensland Flood Appeal.McKellar said there would "clearly" be a longer-term impact from the floods on the economy.  "We would hope it wouldn't impact on interest rates and we'll wait and see what the impact will be on inflation," he said."The recent CPI shows inflationary pressures are not excessive at the moment and we would hope there are not unnecessary price pressures emerging as a result of the flood impact."McKellar said they would not review annual sales targets "at this stage.  Obviously we'll be making a fuller assessment of the impact a little bit further down the track," he said.CarsGuide does not operate under an Australian financial services licence and relies on the exemption available under section 911A(2)(eb) of the Corporations Act 2001 (Cth) in respect of any advice given. Any advice on this site is general in nature and does not take into consideration your objectives, financial situation or needs. Before making a decision please consider these and the relevant Product Disclosure Statement.

Milemeter is a Dallas-based insurance company that plans to turn the motoring insurance industry upside down by changing the way insurance costs are calculated.In the US as well as Australia, car insurance is calculated according to risk factors such as age, sex, postcode, car make and model and prior driving record.  Those risk factors are then applied to the cost of insuring your car for a 12 month period.But what if your car, like mine, spends Monday to Friday in the garage? What if you're planning to go away for three months, during which the only risk to your car is someone backing into it while it's parked in the street? Do you really need insurance when your car isn't being driven?Milemeter says no, and the companys CEO Chris Gay, says, "We were frustrated as insurance consumers. We wanted to create an insurance company that was fair, affordable, and made sense."Admirable goals!Milemeter won't start selling insurance until May 2008, but when it opens for business, you'll be able to buy insurance in mileage increments, as low as USD100 for 2,000 miles (about $36 per $1,000km.)You'll register your odometer reading when you sign up, and if you try to make a claim once you're over your purchased miles, you're out of luck. Top up your mileage and your coverage continues.The only downside is that your insurance mileage does have an expiry date - you can't expect to garage your car a few years until insurance costs come down!As someone who cycles or catches the train to work all week, using the car mainly on the weekends, I can see a lot of benefits to this model.Premiums will still vary according to your driving record, where you keep your car, and what kind of car it is, but importantly, Milemeter has also done its sums and decided it won't discriminate according to sex: male and female customers insuring the same car in the same location with the same driving record will pay the same premium. Vive non difference!In a perfect world we'd also pay a different rate per kilometre depending on the speed we're driving, whether we're on a Victorian road or a NSW road (where roads are merely a line of potholes aligned between the painted lines.) Or how about  when we're talking on the mobile phone while we drive? Eating fatty foods and smoking... shouting at the kids in the back... driving with annoying bumper stickers... turning without indicating......perhaps variable rate insurance could discourage everything I hate about other drivers?CarsGuide does not operate under an Australian financial services licence and relies on the exemption available under section 911A(2)(eb) of the Corporations Act 2001 (Cth) in respect of any advice given. Any advice on this site is general in nature and does not take into consideration your objectives, financial situation or needs. Before making a decision please consider these and the relevant Product Disclosure Statement.