Car Insurance: Less Known Insurers Offer Biggest Discounts

Monday 28 May 2018, 8:22AM
By MoneyHub New Zealand


The New Zealand car insurance industry is competitive, but new entrants are pricing below established players. MoneyHub publishes its review on car insurance and highlights how vehicle owners in the regions save as much as 50% than those living in cities for the same vehicle. 

A report released by MoneyHub aims to inform vehicle owners about the significant range in premiums for car insurance. The report gathered a number of quotes which suggested vehicle owners all over New Zealand could be overpaying hundreds of dollars more per year by not shopping around.

MoneyHub found that the relatively unknown Trade Me Insurance offered the best value for comprehensive vehicle insurance on standard vehicles. In comparison, AA insurance charged on average of 40% more for similar policies.

MoneyHub’s Senior Researcher Christopher Walsh said:
“New Zealanders have a wide choice of car insurers and getting an online quote has never been faster or easier, but it’s essential to compare to save the most and get the right policy. While most policies had the same $400 excess, the annual saving in the upfront policy could be significant by getting a few quotes”. 

“Vehicle owners in the regions generally pay a lot less than those in cities, with Invercargill and New Plymouth being two examples of cities where car insurance can be 35-50% cheaper than what it would cost for an Auckland driver of the same age to insure the same vehicle. Insurers tended to penalise those living in areas with tricky and bendy roads such as Piha by charging more for a policy. And within Auckland it also ranges – every insurer charged different amounts for the same vehicle when we compared Takapuna to South Auckland”. 

“Policy costs for a typical vehicle vary widely - we found Trade Me Insurance (which is underwritten by Tower) to be the best overall value at an around 30% below the market average for the vehicles we priced”.

“We published our research to raise awareness that many Kiwis over-insure their car when it comes to "market value"; for example, those insured for a $10,000 estimated "market value" may only receive $6,000 if the car is written off. A car loses value in time, so the price of car insurance should fall, but of course it usually doesn’t”. 

“Young driver insurance continues to be expensive as insurers perceive newly qualified drivers as the highest risk; some of our most helpful tips such as installing car alarms and parking a vehicle in a secure garage would not drop the price of a premium significantly to those under 25 years of age”. 

“We confirmed that paying for car insurance annually instead of monthly is always cheaper, sometimes by as much as 15% across the insurers we evaluated”.

“Claiming is an easy process, but hundreds of people lodge complaints every year about their claim being declined. To reduce the chance of this happening, it's essential to read and understand your policy as to what you are covered for, and what you are not covered for”.

MoneyHub published a number of tips when it came to buying and claiming on car insurance and policy prices would be updated on a regular basis going forward.

More: Car Insurance