Looking to cut your car costs? You could be missing out on big savings on your car insurance if you’re not reviewing the number of kilometres you’re driving – especially if you’re retired, semi-retired or working from home.
The number of kilometres driven in a year plays a crucial role in how your insurance premiums are calculated, so if you’ve found yourself driving less recently it pays to speak to your insurer about your options.
“If you suspect the number of kilometres you travel in a week has reduced for whatever reason, you could be in a position to be paying much less for insurance,” says general insurance specialist Stephen Zeller.
“It’s important that when the time comes to renew or compare for a new policy, you provide details that are as accurate as possible. Simply renewing a policy without checking it can mean you are throwing hundreds of dollars down the drain.”
Recent research showed that a customer driving a 2016 Mazda CX-5 in Victoria with an annual mileage of 10,000 kilometres could reduce their comprehensive insurance premium by an average of $257 compared to if they drove 30,000 kilometres.
In a similar comparison, the premium for a 2016 Toyota Hilux yielded an even bigger reduction – $297.
“Should motorists dramatically reduce the number of kilometres they travel [even further], savings up to $454 could even be possible, in this instance based on a Toyota Hilux in Victoria being driven just 5000 kilometres instead of 50,000 kilometres,” says Mr Zeller.
Customers may also find savings in a review of their extras, says Compare Club general manager of insurance and banking Eayl Machlis.
“Customers should have a look at their optional extras on car insurance policies like windscreen protection and re-evaluate if that cover is still appropriate. If not, there may be additional premium to be saved,” he says.
“Removing even a single optional extra on car insurance could you save you up to $100 or more.”
Consumer advocacy group CHOICE says parking your car in a much safer place than usual – such as in your driveway or garage – can reduce your premium.
“Being at home during the day can help reduce your risk of burglary, since an unoccupied home is an easier target for burglars than an occupied one,” says CHOICE insurance expert Daniel Graham.
But it’s not entirely about getting a better deal as customers actually have a legal obligation to inform their insurer when circumstances change, as this affects individual risk levels.
“As an insurance customer, you have a duty of disclosure to your insurer – if your circumstances change, you’re required to tell them,” says Mr Graham.
“Let the insurer decide if it’s relevant information.”
But he also advises that this disclosure presents the perfect opportunity to renegotiate your deal.
“Absolutely leverage your responsibility to your insurer to get a better premium if you can,” says Mr Graham.
“The best way to go about it is to call your insurer and tell them your circumstances have changed. You can then say, ‘Because my risk is lower, I’d like to renegotiate my premium’. They should have discretion to give you a discount.
“The threat of cancelling is always a good way to get your insurer into gear. As long as you’re prepared to walk, by all means threaten to.”
Are you driving less than you were a few years back? Did you negotiate a cheaper car insurance premium last year? Do you know any other tips to cut your car costs? Why not share them in the comments section below?
Also read: How ‘pay as you drive’ car insurance could save you hundreds
