How Much Does Car Insurance Cost in Australia? Average Prices by State

Buying a car is only the start of the expense. Ongoing costs matter more over time, and car insurance is one of the biggest regular bills owners face. This guide explains how much car insurance costs in Australia today, shows the average prices by state and territory, compares what drives those differences, and gives practical examples and money saving ideas you can use straight away.

I looked across industry research, regulator reports, and insurer commentary to pull numbers and explain variations. Different studies use different methods, so I show ranges where appropriate and always explain the source of each figure. Key takeaways appear up front, and detailed state level comparisons follow.

Quick summary of what you need to know

1. The national average for comprehensive car insurance has been rising and sits in the low thousands of dollars per year for many drivers. 
2. Premiums differ a lot by state and territory because of factors such as crash and theft rates, repair costs after natural disasters, and local insurance design. 
3. Some states, like Tasmania, have historically reported much lower average premiums than major population states such as Victoria and New South Wales.
4. Comparing policies matters. Two drivers in the same suburb can receive very different quotes depending on the insurer, cover type, excess, and optional extras.
5. The rest of this article explains the data in detail and gives examples you can use to estimate your own quote.

What counts as car insurance cost

When we talk about car insurance cost in this guide, we focus primarily on comprehensive cover because it is the policy type that shows the largest variation and the greatest impact on household budgets. Comprehensive policies typically pay for repair or replacement of your vehicle after an accident or theft and also cover damage caused by weather related events depending on the product.

Cost components that influence premiums include

1. Policy type, such as comprehensive third party or third party property only
2. Vehicle make, model, and age
3. Driver profile including age driving history and address
4. Annual kilometres and typical use, such as commute or business use
5. Chosen excess and optional extras such as new car replacement or hire car after an accident

When sources publish average premiums, they often use different sample vehicles and driver profiles. That is why the precise average numbers vary between research providers. I use recent industry and regulator publications and explain methodology where needed.

National picture and recent trend

Recent research shows rising premiums, but the rate of increase has slowed from the shock increases seen earlier in the decade. Canstar Research found the typical comprehensive policy in 2025 increased versus the prior year by a mid single digit percentage and that switching providers remained a strong way to save. The Insurance Council and industry commentary point to rising repair costs and natural catastrophe claims as the structural drivers of higher premiums. 

To put a figure on the national average, consider the following representative estimates from recent studies

1. Canstar reported an average comprehensive premium in the low two thousands in 2025 with variation by state.
2. The Insurance Council analysis and regulator reports show much lower averages in Tasmania when measured on some government insurer bases and much higher averages in states that have seen steep increases due to theft and severe weather.

These differences matter because the same increase in dollar terms is a higher percentage of income for lower income households and for regionally concentrated populations.

Average comprehensive premiums by state and territory in 2025

Below is a synthesized table that brings together published figures and regulator commentary. Where direct single source numbers exist, I cite that source. Where sources differ, I show a conservative estimated range and explain why. Figures are annual average premiums in Australian dollars for comprehensive cover where available.

Notes on the table and methodology

1. Some published studies base averages on specific sample vehicles and driver profiles, which changes the headline number. Always check what vehicle model and driver assumptions were used. 
2. Regulator reports sometimes publish averages for government run schemes or particular product classes, such as compulsory third party, which are not directly comparable with comprehensive market averages. I kept the focus on comprehensive market premiums where sources allowed.

Why Victoria and New South Wales show higher averages

There are three reasons Victoria and New South Wales often appear at the top of premium lists

1. Urban population density means more accidents per kilometer. More accidents translate to higher claims frequency, which pushes premiums up.
2. Rising vehicle repair and parts costs after 2020 pushed up insurers' repair bills and therefore premiums. This was highlighted in insurer reporting. 
3. Crime patterns such as vehicle theft hotspots increase the cost of comprehensive policies, especially in certain suburbs. Victoria recorded steep increases in theft related claims in recent years, which drove higher premiums in 2024 and 2025.

Example to illustrate effectImagine two identical vehicles driven the same distance, one registered in central Melbourne and the other in a small Tasmanian town. Because of higher claim frequency and vehicle theft risk, the Melbourne registered car could face premiums that are several hundred to over a thousand dollars per year higher than the same vehicle in Tasmania, according to comparative research.

How insurer cost pressures translate into premiums

Insurers face higher costs from multiple directions and pass some portion to premiums. Key cost pressures are

1. repair labour shortages and higher parts costs after supply chain disruption
2. more frequent extreme weather events and natural catastrophe claims in parts of Australia
3. rising rates of organised vehicle theft in some metropolitan areas

The Insurance Council and public filings by major insurers document these drivers and the impact on premiums. The takeaway for drivers is that premiums rise both because claims become more expensive to settle and because insurers adjust pricing for future expected losses. 

Example scenarios with ballpark premium estimates

These examples are simplified to help you compare possible costs. Real quotes will differ because insurers use many data inputs.

Example: One urban family car

1. Vehicle: Toyota Corolla 2018, owner aged 45, garaged at night average annual kilometers: 12,000, comprehensive cover with $500 excess
2. Likely premium in New South Wales $1 300 to $2 000 depending on postcode and insurer
3. Likely premium in Tasmania: $700 to $1 000 for a similar profile

Example: two young single commuter

1. The vehicle is a small hatchback. The owner, aged 24, uses car daily to commute. 20 000 kilometres per year comprehensive cover with $1 000 excess
2. Likely premium in Victoria, $2 400 to $3 500, reflecting experience for younger drivers in high claim suburbs
3. Likely premium in Queensland: $1 200 to $1 800 depending on local crime and traffic patterns

These scenarios show how much driver age, kilometers, and postcode can change the premium even within the same state. Always get personalized quotes.

Tips to lower your car insurance cost

1. Compare quotes from multiple insurers regularly because savings of hundreds of dollars are common between providers for the same coverage. Canstar research shows switching can still produce large average savings.
2. Choose an appropriate excess you can afford; a higher excess usually lowers premium but increases your out of pocket if you claim
3. Consider optional extras carefully; new car replacement and agreed value increases premiums significantly and are worth it mainly for newer or more specialised cars
4. Reduce declared annual kilometres and consider telematics or pay per kilometre products if you drive less than the general population; several insurers now offer mileage based discounts
5. Garage your car overnight or use a secure parking address; insurers often favor lower-risk postcodes in pricing
6. Bundle policies with one insurer such as home and motor, sometimes results in multi policy discounts but always check the total cover not just headline discount

What about third party only and compulsory third party schemes

Compulsory third party schemes are run differently in each state, and they cover personal injury liability when you injure another person. These are separate from comprehensive motor insurance, and the way they are funded can affect the total cost of having a car.

Some states have separate levies built into registration or separate insurer frameworks, which you will pay in addition to any comprehensive policy. Check your state regulator for exact CTP arrangements. Regulator documents and insurer disclosure will show how this component is charged in your state.

How to use the data in this article to get a quote

1. Identify your likely premium range from the table above using your state as a starting point
2. Use the example scenarios that best match your profile to see where you fit in the range
3. gather three personalised quotes from major insurers and at least one comparison site and one direct insurer quote
4. Check product disclosure statements for exclusions, excesses, and new car replacement conditions
5. Revisit your cover choices annually or after changes such as moving house, buying a new car or a change in commute kilometers.

Final thoughts

Car insurance pricing in Australia is shaped by where you live, how you drive, and the type of cover you choose. Data across 2024 and 2025 shows upward pressure on premiums driven by higher repair and claims costs and by shifts in theft and weather patterns. That means the headline national average is useful but not enough. Look at the state and postcode level and compare quotes frequently.

For those focused on saving money, the best tactics remain comparison shopping, higher excess where affordable, and considering telematics or mileage based products if your driving pattern suits them. If you are in a state with higher average premiums, check for local steps you can take to reduce risk, such as improving parking security.