Most insurers charge less if you pay the insurance annually rather than fortnightly or monthly. Photo: 123RF
Many motorists are under pressure as the cost of insuring their vehicles continues to rise.
Consumer NZ says insurance premiums have risen about 40 percent just in the last three years.
But there are some ways you may be able to reduce the cost of insurance. Here are a few.
Consider your excess
It may be an option to increase your excess - that's the amount you will be expected to pay if you make a claim where there isn't another person at fault.
If you could afford to cover the first $750 of a repair rather than $400, for example, that could reduce your premiums.
But that would only be practical for some people, Consumer NZ insurance expert Rebecca Styles said.
For a 2020 RAV4, parked at home overnight, owned by a driver with a full license for more than five years, used everyday and with no claims in the last five years, premiums would be $131.40 a month with Cove insurance for an excess of $750, or $102.67 with an excess of $1500.
Switch to third-party
Comprehensive cover is the most expensive type of car insurance, because it covers you for most things that might happen to you - accidents, theft, fire and accidental damage.
Third-party options are usually a lot cheaper. You can usually opt for third-party - which just covers you for damage you might cause to someone else's car or property - or third-party, fire and theft, which also covers you if your car is stolen or damaged by fire.
Styles said either would be preferable to giving up insurance entirely. "If you have an old dunger I can understand why you might think [it's worth not having insurance] but if you crash into a Tesla you could be liable for a lot of money."
For that same RAV4, comprehensive cover with AA insurance would be $69.35 a fortnight but third-party cover would only be $8.
Multi-policy discounts
Some insurers offer a discount if you have multiple policies with the same company. That might be 10 percent or 15 percent.
Opt for a car thieves aren't keen on
Styles said people thinking about buying a new car could save money if they did not choose one that was on the "most stolen" lists.
Cars such as the Toyota Aqua can be more expensive to insure because they are frequently stolen.
Sometimes additional security measures such as an immobiliser can also reduce your insurance cost, as can parking in a garage rather than on the street.
Pay annually if you can
Most insurers charge less if you pay the insurance annually rather than fortnightly or monthly.
AA Insurance said it had observed a link between payment frequency and the likelihood of making a claim, so it was one of the factors that determined a premium. This discount is often about 10 percent.
The AA policy for the RAV4 that was $8 a fortnight for third-party would have been $184.22 a year, about $22 cheaper. The comprehensive cover was $69.35 a fortnight or $1598.82 a year, about $200 cheaper.
Shop around
Styles said it was worth shopping around to see if a better deal was available from another provider. Consumer's 2023 car insurance premium survey found switching insurance providers could give a family of four savings of up to $670 a year on average.
"While there is a perception that all car insurance is the same, there are some differences between policies which could save you money," Styles said at the time.
"We found that younger people could save nearly $38 a month by shopping around, and older people could keep an extra $40 in their pocket."
The Insurance Council of New Zealand said there were a number of factors that had an impact on car insurance.
"These include later model cars that have more technology in them which make them more costly to fix, higher claims due to vehicles damaged or lost to last year's flooding and cyclone events, the cost of inflation on repairs and the state of New Zealand's roads and its impact on cars. These are all flowing through into premiums.
"People should take the opportunity to contact their insurer to see what options are available such as looking at their excess or other policy settings, while also shopping around."