24 October 2021
In the market for your first car?
Your first car is a big deal, so make sure you protect your investment.
Buying your first car is an exciting milestone on the road to adulthood. You’ve done your provisional driver years, passed your test and maybe borrowed Mum or Dad’s car to get around.
But now you want your own four wheels to get to your job, to university or both. For a young person, a car is probably the biggest single investment you’ll make for the foreseeable future, so you need to be sure you are adequately and independently insured to protect it.
‘How to insure a new driver’s car’ is one of the most common questions insurance companies and brokers are asked, so we’ve put together a few important things to consider before you sign on the dotted line.
No matter how capable you are as a driver, the downside to being under 25 is that car insurance can be more expensive compared to older drivers. Building a safe driving record is one of the ways you can reduce your premium, but this does take time.
One option to reduce your premium can be to increase the excess that you pay if you have an accident. You could also try bundling other insurances to receive a loyalty discount.
Shop around for the best deal, and remember not all car insurance is created equal, so check the small print and make sure you fully understand what is, and isn’t, included. Paying a little more may save you in the long run.
What type of car insurance do you need?
Compulsory Third Party (CTP) insurance, also known as a Green Slip, is mandatory to register your car. It’s also important because it covers your liability, or whoever drives your car, for injuries caused to someone else in an accident, anywhere in Australia.
If your vehicle is not insured, you may be personally liable for any injuries you cause and other penalties may apply, which can run into many thousands of dollars. So don’t risk not having it.
There are different regulations regarding CTP insurance, so you’ll need to contact the transport authority in your state or territory to find out how CTP insurance applies to you.
Comprehensive Car Insurance
The most popular type of car insurance is also usually the most expensive, as it covers you comprehensively (hence the name) for more things that can go wrong.
A fully comprehensive car insurance policy can cover loss or damage to your car through accident and fire or theft and damage to a third party’s vehicle, especially if you are at fault.
Many insurance companies have additional benefits like hire car cover if your vehicle has been stolen, while repairs are being made, emergency accommodation if you're away from home and personal effects cover. Under their Comprehensive Car Insurance, NRMA offers ‘new for new’ replacement of your car if it is under two years old and it is written off in an accident they insure. Whether you’re in WA, QLD, NSW, ACT, SA or TAS - check out the PDS online to see if it is a good fit for you.
Third Party Property Damage
Third Party Property Damage is usually the most basic car insurance policy that covers the cost of repairs to someone else’s car or property if you’re at fault in an accident – but it doesn’t cover your car if it is damaged.
This is a good choice if your car is old and is worth less than the cost of insurance.
Third Party Fire and Theft
Third Party Fire and Theft insurance is also a lower-cost policy that covers the cost of repairing someone else’s car if you are the at fault driver, plus you’re covered if your car is stolen or catches fire.
Do your research
There are lots of comparison sites online for you to research and compare quotes from different insurers, but don’t be afraid to pick up the phone and ask questions about anything that’s unclear.
Make sure you understand the terms and conditions and what’s included and what’s excluded in your cover, for example, windscreen replacement.