Of all their running costs, car buyers across Australia may feel particularly irked by taking out vehicle insurance. As important as it is, it can sometimes feel like money down the drain. After all, if you don't claim on it, you are paying for something you're not using.
And while the better scenario is always one where you don't need to make a claim on your car insurance, that layer of cover can still be a significant outlay for what is merely peace of mind.
Car owners will be paying 3 per cent more by the end of this year on vehicle insurance
This becomes more of an issue with car insurance expected to rise this year, according to JP Morgan and the consulting firm Taylor Fry. The two companies' research suggests that car owners will be paying 3 per cent more by the end of this year on vehicle insurance, on top of the 2 to 3 per cent target for inflation.
Insurance companies have been pressed to raise their prices after claims rose last year. The range of new technologies that we see in today's automobiles also makes them more expensive to repair or replace.
It may be a necessary move, but it leaves car owners with an extra expense – something many will lament with the recent hike in the cost of living. Fortunately, novated lease holders have a resource to withstand the rise.
A novated lease is designed to bundle all car-running costs into one bill, helping people to budget for their expenses. They also save 10 per cent on the purchasing cost of the car, so that's more money in their pocket.
While the potential to save thousands of dollars is perhaps attractive to everyone thinking of buying a car, the help with road costs might be more useful for some across Australia. Canstar found that when car insurance premiums last went up, South Australia, Western Australia and Tasmania saw the biggest rises.
Meanwhile, for those who still want to lower their car insurance, consumer advocacy group CHOICE offered three tips:
- Increase your excess if you feel comfortable doing so
- Switch your insurer (only 12 in 50 surveyed insurers offer loyalty discount, while many provide low introductory rates)
- Negotiate a drive-less-pay-less clause if you have only low mileage
For more information on a novated lease and how it can save you and your family money, our video above has some more information. Give us a call on 1300 22 55 82 for all the help you'll ever need when it comes to novated leasing.