cheap car insurance nz

Cheap Car Insurance (NZ Guide)

Is buying cheap car insurance in NZ worth the savings? How can you get cheaper car insurance? How do you compare car insurance? Cove answers all your car insurance questions.

Car insurance in New Zealand varies in price between insurers, so should you simply choose the cheapest car insurance you can find? There are a number of factors you should weigh up before deciding whether to buy the cheapest car insurance policy you can find is the right choice for you.

As with most insurance products, the price you pay will be dictated by your own personal circumstances. In the case of car insurance, the price insurers charge is a combination of factors, including your age, location, make and model of the vehicle, and a range of other variables.

Your monthly premium also depends on the excess you choose to pay.

cheap car insurance

As you increase your excess, your monthly premium falls.

What influences your car insurance premium?

Let’s take a quick look at what insurers look at when calculating your car insurance premium. This will help guide you when you’re working out how you can make changes to your personal circumstances to get cheaper car insurance.

Age – Drivers of different ages have a different likelihood of being involved in an accident. Some insurers will take this into account when pricing their car insurance policies. Young drivers with less experience may be required to pay a little more, whereas slightly older drivers who have held their licence for longer can often get cheaper car insurance.

Location – Due to a number of reasons, car insurance is cheaper in some areas of New Zealand, and more expensive in other areas. Some postcodes have higher density traffic, or narrower streets, which can lead to more accidents, whereas other areas may be more prone to burglaries and malicious damage.

Parking – Some insurers ask during their online quoting process where you park your car when it is not in use. Parking your car on the street may incur a slight premium over customers to park their car safely in their garage.

Type of Vehicle – Certain vehicles are going to cost more than other vehicles. Insurers have large amounts of data showing how often each type of vehicle is involved in an incident, and the typical repair costs for each vehicle. It makes sense that repairing an expensive late-model Mercedes-Benz is going to cost more than repairing an older Toyota. In addition to the cost of repairs, some cars are known to get stolen more often than other cars, which can also play a role in the cost of insurance.

Further, there are a number of extra benefits that some car insurance policies provide, that other policies don’t. Examples of these extra benefits include:

Rental Cover – Rental cover can be an optional extra, which ensures that if you’re without a car as a result of a claim, you’ll have a rental car organised to keep you on the road while your own car is being repaired.

Temporary Accommodation – If you are in an accident and your vehicle is damaged so you can’t drive it and you can’t get home, this policy feature ensures you receive a payment to organise temporary accommodation.

Excess Free Glass Cover – Typically an optional extra, Excess-Free Glass Cover means that if your claim is only for accidental damage to your vehicle windscreen or windows, you won’t have to pay any excess.

Roadside assist – If your car breaks down, some insurers will pay to have your car towed home or to a mechanic. This can also cover some roadside assistance like jump-starting a flat battery or giving you a few litres of fuel if you’re out.

How to get cheaper car insurance in NZ

Besides shopping around and comparing insurers, there are two quick ways to get cheaper car insurance from nearly any insurer:

Increase your excess – Some of the pricing factors you can influence, such as the type of vehicle you buy, whereas others like age are out of your control. However the one thing anyone can do to get cheaper car insurance is to adjust their excess.

Your excess is the amount you pay only when you need to make a claim.

By opting to pay more in the event of a claim, you can reduce your monthly premium payments. Your excess is typically set when you first take out your policy, however you should be able to adjust your excess at any time with most insurers in New Zealand.

Check your car is correctly valued  – One of the main factors that determines what your premiums are is the value of your car. When you buy car insurance, you will need to state what you feel the replacement value of your vehicle is. The good news is that most insurers will give you an average range for the value of your vehicle, based on its make, model, and age.

However it pays to check this value closely to ensure you are not overestimating the value of your vehicle, and therefore having to pay extra in premiums. If your car has lots of wear and tear, or poor panel work, it is likely to be valued lower than the average vehicle of that make, model, and age.

If you amend your vehicle’s value downwards to account for this, your monthly insurance premiums will likely decrease slightly as well. If it has been a number of years since you insured your car you may find this is a quick way to get cheaper car insurance in New Zealand. Simply log into your online account or call your insurer to update its sum insured, as you car has likely decreased in value since you first insured it.

Keep in mind however that you should always value your vehicle as accurately as possible. If you want to save money by understating your car’s value, you will not be paid as much should you need to replace your vehicle through an insurance claim.

So, should you buy the cheapest car insurance?

The simple answer is you should buy the car insurance policy that suits your personal needs the best. This means not immediately buying the cheapest car insurance available in NZ, but taking into account the extra benefits you may need, and buying the car insurance policy that most closely aligns with these.


How to Compare Car Insurance Quotes

Comparing car insurance policies can be a little tricky. It is tough to know what to look for! Here is the Cove guide to ensure you are comparing apples with apples.

With multiple types of policies (third party, third party fire and theft, comprehensive) comparing car insurance quotes can cause a few headaches. It doesn’t help that each policy has a number of extra benefits and optional extras!

So you’ve recently bought a car, and now you are shopping around and doing your best to both understand and compare car insurance policies. Everyone who has purchased car insurance knows it can be a little tricky to figure out if you are getting the best deal, and that’s why Cove has pulled together this guide on comparing car insurance policies.

Types of Car Insurance Policies

Part of what makes comparing car insurance confusing for first-time buyers is understanding the various types of car insurance that most insurers in New Zealand offer.

There are a range of car insurance policy types available in New Zealand, starting from only covering crash damage to other people’s cars and stuff, up to a fully comprehensive policy.

The three most common types of car insurance are Third Party, Third Party Fire & Theft, and Comprehensive. You can compare these three types of car insurance policies by clicking through the tabs below:

Third Party car insurance is the most fundamental car insurance policy you can buy. In insurance terms, third party refers to the other person or entity involved in your accident. If you crash into another vehicle, the driver of that vehicle is the third party.

Third party car insurance policies will take care of the costs of repairing the third party’s car, should you be liable for accidental damage to their vehicle. It will also cover other property (like fences, for example) if the accident involves that. With this type of policy it is your responsibility to organise, and pay for, repairs to your own vehicle.

Third Party Fire & Theft insurance will generally cover all the same incidents that a standard Third Party policy will, with the extra benefit of also providing cover if your vehicle is stolen or damaged by fire. For this extra benefit, you will pay a slightly higher monthly premium.

Comprehensive car insurance is for people who want to fully insure their own vehicle, as well as pay for damages they may cause to other vehicles.

With Comprehensive car insurance policies, your insurer will cover the damage you might cause to someone else’s car or property, as well as any damage to your car.

A comprehensive policy is a great choice for people who don’t mind paying a slightly higher premium each month, to have the certainty that should they be involved in an accident that they are responsible for, they won’t have to pay for the repairs to their own vehicle. They’ll still need to pay the excess of course!

Features of car insurance policies

Each type of car insurance policy comes with a number of features and optional extras. Below we outline a number of common features and optional extras available in New Zealand. Read through these and take note of what features are important to you. Then, when comparing car insurance policies, you will have a better understanding of what each feature actually is, and can use this to help your buying decision.

Lifetime repair guarantee

Some insurers will offer a lifetime repair guarantee, which means when they make a repair, they guarantee it for the life of the car (generally only while you stay insured by them).

Young drivers

Occasionally younger drivers may be behind the wheel of your vehicle, but haven’t been named on your policy. Some policies will still cover these drivers, but you may be asked to pay a higher excess if they’re involved in an accident.

Trailer Damage

If you are towing a trailer at the time of an accident, this can be covered up to a predetermined amount in some policies. It’s also sometimes covered even if it’s not attached to your car!

Rental Cover

Rental cover can be an optional extra, which ensures that if you’re without a car as a result of a claim, you’ll have a rental car organised to keep you on the road while your own car is being repaired.

Temporary Accommodation

If you are in an accident and your vehicle is damaged so you can’t drive it and you can’t get home, this policy feature ensures you receive a payment to organise temporary accommodation.

Excess Free Glass Cover

Typically an optional extra, Excess-Free Glass Cover means that if your claim is only for accidental damage to your vehicle windscreen or windows, you won’t have to pay any excess.

Towing & Transport

If your car is unable to be driven after an accident, some insurers will pay to tow your car to the nearest place of safety, and get you & your passengers home safely.

Roadside assist

If your car breaks down, some insurers will pay to have your car towed home or to a mechanic. This can also cover some roadside assistance like jump-starting a flat battery or giving you a few litres of fuel if you’re out.


How does car insurance work in New Zealand?

There are many options when choosing a car insurance policy. Read below why you need to find what is the best car insurance policy for you.

The unexpected can happen. Car insurance is there to protect you financially if you have a crash. This means the insurer pays to fix some or all of the damage you’ve caused. Most policies also cover you if somebody steals your car.

Insurance covers some situations but not others. Before buying a car insurance policy, you should know a few of the basics, such as what events car insurance policies cover, and the different types of car insurance policies.

What is a Car Insurance Policy Excess?

As with most insurance products, car insurance policies in New Zealand have an excess. Your excess is the amount you are required to pay when you make a claim.

In a simplified example, if your car insurance policy has an excess of $300, and the damages bill for your incident is $7,000, then it is your responsibility to pay $300 when making a claim, and the responsibility of your insurance company to pay the remaining $6,700.

Adjusting the excess on your policy is one of the simplest ways to get cheaper car insurance premiums. If you are confident in your driving ability or can afford to pay more in a crash, you can increase your excess. This means you pay slightly more in the event you need to make a claim but results in your monthly premiums decreasing.

What should I do if I have an accident?

First, make sure all the occupants of your vehicle are safe, then check on the occupants of the other vehicle and anyone else involved if it is safe to do so. If needed, call any emergency services to assist in the situation.

Once the drivers and passengers have been taken care of, write down the incident details. This should include the name and contact details of any other drivers, their registration details, and also the names and contact details of any witnesses.Taking photos of the scene and the damage is also helpful if you can.

Then you can contact your insurance company. They will be able to take you through the process of filing a claim, and requesting any additional details they need to process it in an efficient and timely manner.

Do I need Car Insurance?

Unlike in some countries, car insurance is not mandatory in New Zealand, and for this reason some people find it tempting to ignore.

Even if your car is cheap, you can still cause tens of thousands of damage to other people’s cars and property. If you crash into a Porsche, fixing it becomes your responsibility!

Purchasing car insurance provides you with peace of mind knowing that your insurance company is there to support you should you be involved in an accident. Car insurance is beneficial for all types of drivers:

  1. New drivers – In most cases buying car insurance should be the first thing you do after purchasing your first vehicle. We’ve heard many horror stories of accidents occurring on the way home, or cars being stolen before people have organised insurance.
  2. Experienced drivers – Even if you are an experienced driver, there is always the possibility that something can go wrong. Whether it be as small as backing into another car in a car park, or being involved in a more serious accident, there is always the possibility that you slip up & need insurance. Insurance can also protect you in the case where you are involved in a crash with an uninsured driver which isn’t your fault.
  3. Backpackers – When renting a car or motorhome in New Zealand, most rental operators will offer insurance as part of the package (it may be included by default, or offered as an optional extra over and above the base rate of renting the vehicle). However if you are planning to spend a few months in New Zealand and purchasing a car while you’re here, it will be a good idea to at least investigate the cost of insuring your vehicle. Depending on the length of your stay, you will need to consider the term of the policy, and whether it is offered as a monthly policy, or annual policy.

What do others say about cheap car insurance in NZ?

Interest.co.nz wrote as part of their 2018 Comprehensive Car Insurance comparison that “It is important to remember the different pricing and policy structures used by various companies make it impossible to exactly compare like for like when shopping for car insurance”. With this in mind, take a moment to understand each policy when shopping around, and don’t compare just on price. You may find one policy is just a few dollars more per year, but provides more coverage if you need to make a claim.

Similarly, Diana Clement wrote in her 2017 article How to get the best car insurance deals that it is “It’s easy to shave hundreds of dollars off your premium if you know how – but it’s only worth doing if you understand the consequences”.

When building Cove we found that people don’t always want cheap car insurance, they want the best value car insurance, and that’s what we aim for with our own comprehensive car insurance policy.

The content presented on this page is provided for informational purposes only. Cove Limited makes no representations or warranties as to the accuracy, completeness or timeliness of the information. Each person should consult a qualified advisor for advice specific to their circumstances. Cove Limited assumes no liability for actions taken in reliance upon the information contained herein.