Car insurance companies follow one simple rule when calculating premiums – the higher the risk, the higher the prices. And because of the perceived risks, the lower the driver’s age, the more expensive the premiums.
Unfortunately, there is no way around it. If you’re aged under 25, you will have to pay more for motor insurance compared to the average driver. However, there are simple and practical ways to get cheap car insurance, even if you’re a new driver in New Zealand. Let’s dive right in.
Our research team pored through the different insurance companies actively offering car insurance to the New Zealand market and compiled this list. The quotes below are for a hypothetical 21-year-old male driver of a 2023 Toyota Corolla with a clean record, resides in Auckland, and holds a full licence. The insurers are listed from those that offer the cheapest car insurance to the costliest.
Headquarters: Auckland
Cheapest car insurance: Third-party property damage
Car insurance premiums: $7.79 (fortnightly), $16.87 (monthly), $50.60 (quarterly), $202.40 (yearly)
A long-established insurance company in NZ, State Insurance is now part of the Australian IAG group, providing various types of insurance to over 400,000 Kiwis across the country. State Insurance is famous for its award-winning car insurance, which includes the three standard types – comprehensive, third-party only, and third-party fire and theft.
Each policy has optional extras like windscreen cover, roadside assistance, and car hire. Their comprehensive policy covers accidental damage, fire, theft, and legal liability up to $20 million, with nationwide repair options and repair guarantees.
This insurance company zeroes in on customer-centric service, easy policy management online, and community involvement via carbon neutrality. What sets State Insurance apart is not only their low-cost plans, but also that they’ve won New Zealand’s General Insurer of the Year for 10 straight years.
Headquarters: Auckland
Cheapest car insurance: Third party
Car insurance premiums: $12.02 (fortnightly), $26.04 (monthly), $276.71 (yearly)
Established in 1994, AA Insurance came about as a joint venture between the New Zealand Automobile Association (NZAA) and the Suncorp Group. AA offers a slew of insurance products, including home, contents, car, and small business insurance. The company does its own underwriting and sells directly to New Zealanders.
AA Insurance is well-known and well-regarded in the country and is consistently recognised for delivering trusted services and having strong financial stability. AA also supports worthy causes and partners with charitable organisations and prominent community groups like Variety and Eden Park.
Headquarters: Wellington, NZ
Cheapest car insurance: Third party
Car insurance premiums: $14.69 (fortnightly), $31.83 (monthly), $347.27 (yearly); drivers under 25 pays additional excess of $500
Trade Me Insurance offers car, home, and contents coverage. It is among the insurers in New Zealand offering cheap car insurance. Some of its product offerings include no-claims bonuses, up to 15 percent discounts on premiums, and excess-free key loss.
Trade Me is renowned for offering basic car insurance at competitive prices and having a convenient online management and claims processes.
Headquarters: Auckland
Cheapest car insurance: Third-party
Car insurance premiums: $17.00 (fortnightly), $36.84 (monthly), $401.95 (yearly); didn't ask for gender
AMP insurance offers comprehensive car insurance for Kiwi motorists’ peace of mind. They cover a wide range of risks, including both at-fault and not-at-fault accidents, theft, fire, and legal liabilities.
Like most other companies offering cheap car insurance in NZ, AMP offers comprehensive, third-party fire & theft, and third-party property damage. Some of their plans also feature benefits such as excess-free windscreen repair, cover for agreed car modifications and accessories, and roadside assistance.
AMP’s claims process is straightforward, enabling quick and efficient customer support during stressful events. Vero Insurance New Zealand Ltd is AMP’s underwriter. Customers can manage their insurance online 24/7 with AMP's My Insurance Manager.
Headquarters: Auckland
Cheapest car insurance: Third-party
Car insurance premiums: $17.00 (fortnightly), $36.84 (monthly), $401.95 (yearly); didn't ask for gender
AMI offers the three basic insurance policies – comprehensive, third-party fire and theft, and third-Party property damage. AMI focuses on delivering personalised service. Its plans feature many optional features like windscreen cover, rental vehicle benefits, and roadside assistance.
AMI has flexible payment options and a user-friendly claims process that includes 24/7 customer service. This insurance company aims to deliver reliable coverage and support across the country.
Headquarters: Auckland
Cheapest car insurance: Offers only comprehensive coverage; not available for drivers under 21
Car insurance premiums: $158.69 (monthly), $1,614.95 (yearly)
Cove Insurance is a New Zealand-based digital-first insurance company renowned for offering simple, hassle-free, transparent car insurance with its comprehensive insurance plan. Customers can manage their plans via an easy-to-use online platform and chatbot interface. This enables them to get quotes, purchase policies, and manage their insurance digitally.
Cove's car insurance is unique in that it provides comprehensive cover for cars valued up to $80,000 with online quotes calculated in as fast as two minutes. This facility is supported by live chat assistants. Benefits of its plans include no-fault excess refunds, optional roadside assistance, and flexible payment.
Headquarters: Auckland
Cheapest car insurance: Third party
Car insurance premiums: Drivers are advised to call customer service to get personalised quotes; although comprehensive coverage is estimated at $603 a year
Westpac car insurance offers basic auto insurance, which includes comprehensive cover, third-party fire and theft, and third party only insurance. Westpac’s comprehensive policy includes perks like:
Auto Assist roadside assistance is also an available feature for this policy. Westpac provides flexible excess options and a 30-day, free look period to enhance customer satisfaction.
Headquarters: Auckland
Cheapest car insurance: Third-party
Car insurance premiums: Drivers are advised to call customer service to get personalised quotes; however, customers aged below 25 can get discounts on premiums with multi-product packages
ASB offers extensive cover for its home, contents, business, and life insurance products. ABS is backed by strong customer support and a commitment to financial innovation. In terms of car insurance products, ASB offers the essential third-party only, third-party fire and theft (its most cost-effective product) and comprehensive coverage. Optional benefits like roadside assistance and multi-product discounts for bundled coverage are available with ASB.
While the policies offered by these companies are among the cheapest, do note that they are other affordable options like telematics insurance. Weigh these insurers and their options but be on the lookout for new developments in cheap insurance choices in NZ.
To compile this list, Insurance Business referred to the websites of several industry specialists and personal finance experts, including the Ombudsman’s Consumer Protection NZ. Here are the top premium-reduction strategies we gathered.
One of the most cost-effective ways to access cheap car insurance in NZ is to shop around and compare quotes using price comparison websites. The internet is replete with these online tools, which provide a side-by-side comparison of the different policies available from various car insurers. Apart from rates, you can examine each policy’s features and benefits, allowing you to choose the best coverage possible.
But experts warn against car insurance companies offering “ridiculously cheap” policies as these can compromise your coverage. It’s a balance of cost versus reliability and trust. We cover this more at the end of this article.
Your driving history is among the biggest factors car insurance providers consider when determining your level of risk. This means a driving record without a trace of traffic violations will definitely qualify you for lower premiums. But if you have received a traffic citation or caused an accident, it is not a good idea to hide it from your insurer as this can void your coverage and may result in fines.
3. Build up your no-claims bonus.
Some insurers offer no-claims bonuses for policyholders who do not file any claims for a certain period, usually a year. This policy feature can significantly make your car insurance cheaper, especially if you have consecutive claims-free years.
This does not mean, however, that you need to maintain a spotless driving record to be given a discount. Although being a safe driver certainly helps, it also pays for you to be smart about what you claim. This can entail paying for minor repairs out-of-pocket in exchange for bigger discounts in the long run.
If you plan to insure your vehicle for its market value, it helps to be aware of the fact that your car’s value rapidly depreciates each year. A $15,000 car, for example, may be worth just $5,000 in less than 10 years, so your premium payments must reflect that.
To make sure that you are not over-insuring your vehicle for its market value, you should review your policy every year instead of allowing it to auto-renew (more on this later). This will allow you to find a deal that matches your coverage needs.
Optional add-ons – such as breakdown and windshield cover – extend the level of protection you receive from your policy, but these are not suited for everyone. Some motorists are better off sticking to basic coverage as this allows them to get cheap car insurance in New Zealand. Bear in mind, that these optional extras have a corresponding impact on premiums.
During application, most insurers will ask you to confirm if your vehicle has an alarm installed as this decreases the likelihood of it being stolen, earning you discounts. Other anti-theft devices such as immobilisers and steering wheel locks can also make you eligible for cheap car insurance in New Zealand.
If you have already taken out house or life insurance, you can bundle this with your car policy to access more savings. Many insurers offer multi-policy discounts, which can slash a huge chunk out of your car premiums. You may likewise be eligible for a multi-vehicle discount if your household has two or more cars, as long as these are covered by the same insurer.
Another effective way to get cheap car insurance in New Zealand is to pay for your premiums in one lump sum rather than in monthly or fortnightly instalments. This way, you can avoid being charged interest or finance arrangement fees. This strategy, however, will not work if you rely on a month-to-month budget, although some insurers may be willing to waive interest charges.
One of the costliest mistakes you can commit in the car insurance process is allowing your policy to auto-renew. This prevents you from removing unnecessary coverages, which you will continue to pay for in your renewed policy.
According to experts, it is best to review your coverage every year as your circumstances may change, and your current policy may no longer fit your needs. Doing so can also enable you to find a deal that provides better coverage at a lower rate.
The type of vehicle you choose plays a crucial role in how insurance companies calculate your premiums. You can expect to get cheaper car insurance in New Zealand if you choose a popular car model as this often has parts that are easier and less costly to repair and replace. More expensive vehicles, meanwhile, may come with higher replacement costs and are more appealing to thieves, which can drive up premiums.
The checklist below sums up the top 10 ways for you to get cheap car insurance in New Zealand. You can download the table for easy access.
Because of the myriad factors in play, it is difficult to provide a single price point for car insurance policies across the country. Some experts even describe car insurance as a “hyper-personalised” form of coverage, which is why there is a vast cost difference between policies.
The table below lists the factors that have a major impact on car insurance premiums in New Zealand.
All things being equal, the cost of your premiums is dependent on how risky your insurer perceives you to be based on these parameters.
Unlike in other countries, drivers are not legally required to take out car insurance to operate a vehicle in New Zealand. The government already covers treatment and compensation costs for citizens and visitors who are injured in a vehicular accident through the Accident Compensation Corporation (ACC), a Crown entity under The Treasury Te Tai Ōhanga.
But this does not mean that you could get out scot-free if you caused an accident. You will still be liable for property damage, that’s why experts recommend purchasing third-party insurance, the most basic form of coverage, to provide financial protection.
Kiwi drivers have three options when it comes to car insurance policies. These are:
Third-party cover: The least expensive type of policy, this pays for damages you cause to someone else’s vehicle or property. This, however, does not cover your own losses.
Third party, fire & theft (TPFT): Offers the same coverage as third-party insurance but also provides financial protection if your vehicle is stolen or catches fire.
Comprehensive coverage: The broadest and most expensive form of coverage, this includes damage to a motorist’s car, in addition to TPFT cover. According to the Insurance Council of New Zealand (ICNZ), it also pays the costs for “salvaging your vehicle from an accident scene and towing it to a repairer.
If you’re looking for cheap car insurance with reliable coverage, we recommend turning to an insurance agency that you can trust. We suggest you check out our Best in Insurance Special Reports page to find reliable, vetted, and trusted car insurance agents near you.
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