The biggest losers: Sydney drivers

Insuring your car is one of those things that we all love to hate but we all know we need it.

And research has found that Sydney drivers cop it the worst, when it comes to comprehensive car insurance. So are Sydneysiders getting ripped off? Or is there anything you can do to avoid the sting

Financial comparison website RateCity conducted a comparison study involving 23 Australian car insurance companies. Their research found that when compared to other major cities such as Melbourne and Brisbane, Sydney was the most expensive to insure your car.

RateCity used the same driver profile for each city location and found that the average annual premiums for Sydney siders were a whopping $1,158, which is a lot when you compare that to Melbourne which averaged $890 and Brisbane which was $621. Sydney is almost double Brisbane’s average, and nearly $270 difference compared to Melbourne!

“The average cost of comprehensive car insurance for the three-city metro locations was $890 and compared to the lowest average national quotes of $584, it’s possible that Australian drivers could save $300 each or $3.36 billion as a whole,” says RateCity CEO Damian Smith.

Budget Direct ruled as the overall cheapest comprehensive car insurance provider in all three states, followed by Ozicare.

Excessive costs

When it comes to excesses, there is a noticeable difference in the average cost for each state as well, with Sydney at $564, Melbourne at $516 and Brisbane at $481.

The cheapest average standard excess was recorded by ANZ and ING Insurance at $450, with AON and Westpac not far behind on $467.

There a number of reasons behind these excessive price differences with insurance premiums and excesses. One main factor being that Sydney is a larger and more highly populated city than the others, with a population of over 4.3 million, compared to Brisbane’s 1.9 million and Melbourne with over four million.

Car insurance companies look at crime rates for suburbs, as well as other factors which affect your premium including your age, sex, type of car, if your car has after-market modifications, the age of car, where you park your car, as well as your past driving history including how many claims you have had.

Nonetheless if you didn’t have comprehensive insurance and your car was stolen or you were involved in an accident where you were at fault, you would be stuffed. Not only would you be out of pocket for potentially thousands of dollars but you could be left without a car and have nothing to show for it but perhaps a large debt.

Comprehensive insurance covers you for theft and collisions caused by yourself and other parties, so for peace of mind it is the smarter option to have insurance.

Here are some tips to save hundreds on your car insurance:

Compare car insurance quotes online

Pay your premium in full if you can as this works out cheaper than paying by the month

Keep your driving record clean and drive carefully, as this increases your no claim bonus and will cost you less

After-market modifications cost more to insure your car so keep these to a minimum or before you get them done get a quote to find out how much extra it will cost you.

Use your car less, some insurers charge you for how much you drive. RateCity’s comprehensive car insurance comparisons, as at December 2009