New data published by Canstar shows car insurance premiums have increased by 5.8 per cent or $122 this year – up from an average annual fee of $2104 in 2024 to $2226 in 2025.
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While that's a much smaller increase than the 30.5 per cent average price hike in 2024, insurance premiums vary significantly depending on the state or territory in which you live, as well as your age, sex and driving record, and of course the type of vehicle you're insuring.
Canstar's 2025 Car Insurance Star Ratings and Awards is based on the analysis of over 67,000 full comprehensive policy quotes for both new and used cars in a range of scenarios, and with a state-specific target excesses ranging from $800 to $1000.
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The data shows that, on average, Victorians pay the most for their comprehensive car insurance, at $2940 per annum. They have also been hit with the biggest annual increase, with premiums rising by an average of $225 or 8.3 per cent year-on-year.
When it comes to driver types, mature drivers experienced the biggest price hikes, with an average increase of 6.5 per cent in their comprehensive cover over the past year.
But the highest car insurance prices overall continue to be paid by young male drivers under 25, who face average annual premiums exceeding $3000 because their higher accident rates make them a greater risk for insurers.
Canstar says someone paying an average premium of $2226 who switches to one of its top-rated policies could potentially save up to $692 or 31.1 per cent in one year, while drivers who switch to a five-star rated policy in Victoria stand to save more than those in any other state – $967 or 32.9 per cent on average.
In terms of driver types, it's families who stand to save the most (more than $1000) by switching to a five-star policy as rated by Canstar, followed closely by young male drivers.
"This year's premium increases might not have been as steep as previous years for many drivers, but a 5.8 per cent hike isn't exactly easy to swallow," said Canstar's data insights director Sally Tindall.
"One of the biggest mistakes drivers can make is viewing their annual renewal notice as a tick and flick exercise. Instead, your notice should be seen as a reminder to do a quick comparison.
"Our research shows drivers taking out a new policy can potentially save $692 by switching from an average priced premium to a Canstar top-rated one. That's an average saving – those who have copped price hikes from their insurer for years could stand to save even more."
Based on the 51 products it examined from 43 insurers as part of its 2025 Car Insurance Ratings and Awards, Canstar identified six providers that offered outstanding value to Australian drivers both nationally and by state/territory, based on a comprehensive comparison of price and policy features. It also nominated one that offered the highest claims satisfaction and claims features nationwide.
Outstanding Value Award: Bingle, Budget Direct, ING, ROLLiN' Insurance, Virgin MoneyQLD, NSW, VIC, TAS, SA: ROLLiN' InsuranceWestern Australia: BingleNorthern Territory: Australia PostMost Satisfied Customers Car Insurance Claims: RAA
"When shopping around for insurance, price is important, however, it's not necessarily about getting the lowest price policy in town. You want to be looking for value for money, that is, a decent level of cover at a competitive price," continued Ms Tindall.
"The research team at Canstar has compared an astonishing 67,000 quotes across 43 different providers, assessing both the cost and what's included for each one to help drivers identify good-value options.
"There are also other ways to reduce your premium, like increasing your excess, removing additional drivers who no longer use the car and maintaining a clean driving record.
"It's also worth checking if your insurer offers discounts for infrequent and safe drivers. For example, ROLLiN' Insurance uses a 'Safe 'n' Save' app that assesses things like a driver's acceleration and braking with a discount of up to 15 per cent on offer based on your score.
"For people on an ultra-tight budget, the temptation might be to ditch their comprehensive insurance altogether, however, a quick check could potentially see you keep your insurance, with a higher level of cover at a lower price – all in one simple switch."
Content originally sourced from: CarExpert.com.au
