Ultimate NZ Guide to Car Insurance (2025): Compare & Find the Best and Cheapest Cover

Based on the latest Q2 2025 data from Quashed.co.nz, the average cost of NZ car insurance in 2025 is $1,236 a year or $103 a month. 

The average cost of Third Party Fire & Theft car insurance is $558 a year or $47 a month. For Third Party only car insurance, the average cost is $280 a year or $23 a month.

The average cost of car insurance in New Zealand has significantly increased since 2022, making it more important than ever to compare your options. 

Check out “The Average Cost of Insurance in NZ” article to find out which NZ city has the cheapest and most expensive car insurance.

There is no single "cheapest" car insurance company. The best price for you depends entirely on your profile and vehicle. Insurers calculate your premium based on these key factors:

• Driver: The driver(s) location, age, gender, claims history, and driving record.

• Vehicle: The year, make, model, and value of your car. More expensive or powerful cars cost more to insure.

• Coverage: The type of cover, your sum insured value, and the excess you choose.

Insurers also factor in their own business costs such as reinsurance, government levies, and profit margins. This is why prices can vary by hundreds, and sometimes thousands, of dollars for the exact same driver and car.

The only way to find the cheapest price for you is to compare multiple providers.

Choosing the right type of policy is your first major decision.

Comprehensive car insurance: The most popular choice in New Zealand. It covers damage to your car and other people's property, giving you complete peace of mind.

Third Party (Fire & Theft / Only) car insurance: Primarily protects you from the huge cost of damaging someone else's expensive vehicle (e.g., a $100,000 Tesla). It offers little to no cover for your own car, making it a common choice for those with vehicles worth less than $5,000.

To compare the price and cover benefits of car insurance across different insurance providers, use Market Scan - NZ’s #1 car insurance real-time comparison tool.

These two levers have the biggest impact on your premium.

• Sum Insured: The maximum amount the insurer will pay for your car. This should be its current market value – what it would cost to buy a similar one today on Trade Me or Turners.

• Excess: The amount you agree to cover first when you make a claim.

Here’s an example using the 40 year old looking to insure a 2015 Toyota Aqua:

A higher excess will lower your premium. As the table shows, increasing your excess from $500 to $1,500 can save you 20% or more. In this case $215 a year. 

A lower sum insured will lower your premium. As the table shows, lowering your sum insured amount from $15,000 to $10,000 or $5,000 can save you 10% or more.

Now that you understand the basics, use this framework to compare policies effectively.

• Price: Compare quotes from at least 4-5 different providers. Use a tool like Market Scan to do this in minutes instead of hours.

• Policy Benefits: Don't assume all comprehensive policies are the same. Check the fine print for key benefits like rental car cover, glass replacement, and limits on stolen key replacement.

• Service: Read recent online reviews to see how the insurer handles claims and customer queries. Smaller, local providers often offer faster and more helpful support.

• Credibility: Look at the insurers Financial Strength Rating. This shows they have the capital to pay claims. The Reserve Bank oversees the insurers in NZ and have a minimum capital requirement in order for them to operate. 

Picking the best car insurance for you comes down to comparing the prices, policy benefits, credibility and customer service of car insurance so don’t skip out on comparing your cover. 

Market Scan makes it fast and easy to help you find the cheapest and best car insurance.

Here is a look at some of the major players and competitive challengers in the NZ market.

Here is a shortlist of 5 alternative car insurance providers that you may not have heard of that could be the best car insurance option for you. 

Check how your current car insurance price and policy compares HERE. 

Market Scan is the only NZ car insurance comparison tool that lets you upload and compare your existing car insurance (e.g. AA, AMI, State and Tower) policy side-by-side to other options in the market. This makes it easy for you to find the cheapest and best car insurance policy.

Comparing the market can save you over $1,000. In 2025, the average saving found on Quashed.co.nz is $384.

Example 1: 40 year old male, Auckland, 2015 Toyota Aqua

Cheapest Quote (Assurant) = $995

Highest Quote (Tower): $2,065

Price Difference Gap/Savings = $1,070

Example 2: 40 year old male, Auckland, 2022 Volkswagen Golf

Cheapest Quote (AA Insurance): $1,294

Highest Quote (Autosure): $2,113

Price Difference Gap/Savings = $819

You can see that car insurance prices vary a lot from one car insurance provider. The amount you can save depends on what insurers are willing to offer you to insure your vehicle. The more options you compare, the more likely you will find greater savings. 

If you’re not shopping around and switching your insurance cover from time to time, the insurers have little incentive to compete and lower their prices. They know you’ll simply rollover the policy and keep paying more each year.

Find out how you can give yourself the best chance of finding the cheapest and best car insurance in a few minutes below. To get real-time quotes now - use Market Scan for FREE. 

1. Shop Around Annually: This has the biggest impact, potential savings of 50% or more.

2. Increase Your Excess: Saves 10-25%.

3. Pay Annually: Saves 10-20% compared to monthly payments.

4. Review Your Sum Insured: Don't over-insure an aging car. Saves 5-25%.

5. Build Your No-Claims History: A clean record can save you up to 30%.

6. Restrict Drivers to Over 25s: Saves 5-10%.

7. Improve Vehicle Security: A factory-fitted alarm or immobiliser can save 5-10%.

Shopping around for your car insurance is most likely to save you the most money. 

Shop and save on your car insurance with Market Scan for FREE. 

Switching your car insurance is much easier than you think. You can switch at any time. 

1. Compare the market with a tool like Market Scan to find a cheaper, better policy. 

2. Purchase your new policy online. It usually takes about five minutes.

3. Cancel your old policy. Simply call or email your old insurer to cancel. They will refund you for any unused portion of the premium you had already paid.

Find the Best and Cheapest Insurance Today

Quashed.co.nz is NZ’s #1 online insurance platform that helps you to compare, shop and track all your policies on one simple dashboard. 

Our unique Market Scan tool helps you to compare prices and policy benefits from over 10 insurance providers in real-time online, giving you a much more comprehensive comparison.

Find cheaper and better car insurance with Market Scan for FREE.

Frequently Asked Questions (FAQ)

1. Why is my car policy so much higher than last year, even with no claims?

Increasing cost of repairs, increasing use of technology, spikes in theft & risk and more climate events related claims has increased the cost for insurers which they then pass on in price hikes. Profit margins also factor into the price of premiums. 

2. Is it cheaper if I pay for the car policy for an entire year at once?

Yes, absolutely. Paying your premium annually is one of the easiest ways to save money. Most insurers charge a fee of 10-20% to pay by the month. If your premium is $1,200 for the year, you could save $120-$240 just by paying upfront for the year.

3. How much can I save by increasing my car insurance excess?

A significant amount. The excess is the amount you pay towards a claim, so a higher excess means you're taking on more of the risk yourself. As a general rule, increasing your excess from $500 to $1,000 could lower your annual premium by $150 to $250.

4. Which specific car insurers are generally cheaper for young drivers (under 25)?

There is no single "cheapest" insurer for young drivers. The only way to find out is to get multiple, real-time quotes. A comparison tool is the most efficient way to do this.

5. Will bundling my car insurance (multi-policy discounts) actually save me money?

Most insurers have either stopped or are in the process of stopping multi-policy discounts. You can read more here. 

6. Is a cheaper car policy from a smaller/online-only insurer as reliable as one from a big brand insurer?

All licensed insurers in New Zealand are regulated by the Reserve Bank and must meet strict financial solvency standards. This ensures they have enough capital to pay out claims. The main difference is usually in the service model (e.g., online-only vs. a full call centre) and marketing spend. A lower price often reflects lower overheads, not a lower ability to pay.

7. Which car insurance comparison website is the most comprehensive for NZ?

While several sites exist, some only provide information and static comparisons. A comprehensive tool like Quashed's Market Scan is unique because it provides real-time, buyable quotes from a wide range of insurers and allows you to compare the specific policy benefits side-by-side, not just the price. You can also upload and compare your policy against other options they show. 

8. Is it difficult to switch car insurance companies, and can I do it at any time?

It is incredibly easy and you can do it at any time. It’s a simple 3-step process: Buy your new policy online or over the phone. Contact your old insurer via email or phone and tell them you want to cancel. They will give you a pro-rata refund for any unused portion of your premium. You do not have to wait until your renewal date.