How can you get inexpensive car insurance in NZ?
General information, not advice on your situation. Buying through Tower's online quote is direct, without advice. QuoteHub is a Tower partner and Smiths Insurance & KiwiSaver may receive a commission from Tower.
Inexpensive car insurance in NZ usually comes from changing what the insurer prices, not from a quote that simply looks lower: the cover type, the excess (what you pay towards each accepted claim), who drives and which extras you add. The Insurance Council of New Zealand (ICNZ) says third party property damage is the least expensive of the three policy types and that, generally, the more extensive the cover, the more expensive the policy (ICNZ: motor insurance). Consumer Protection says a clean licence and no claims make the biggest difference (Consumer Protection: car insurance), but those take time to build. This page covers what you can change today, and the cuts that only look like savings until you claim.
Ways to pay less, and what each one costs you
Market value is what the car is worth just before it is damaged, and agreed value is a figure you and the insurer settle on at the start and at each renewal (ICNZ: motor insurance). Each saving below moves some risk onto you. For what sets the starting price, see how much car insurance costs in NZ.
| Lever | Can lower the price | What you take on |
|---|---|---|
| A higher excess | Generally, yes (ICNZ on premiums, Tower's cost guide) | More to pay on each claim, and ICNZ says it is only beneficial if you don't claim (ICNZ tips) |
| Naming drivers, or excluding under-25s | ICNZ suggests both (ICNZ tips), and Tower says excluding young drivers may lower it (Tower's cost guide) | A claim can fail if an unnamed driver is at the wheel (Consumer Protection), and under Tower's optional no-cover-for-under-25s benefit there is no cover while an under-25 is driving the car (Tower's comprehensive wording) |
| Third party, or third party, fire and theft | Suggested for lower-value cars (ICNZ tips, Consumer Protection) | You pay for repairs to your own car after a crash you cause, and with third party alone, for fire and theft (ICNZ: motor insurance) |
| Market value, not agreed value | Agreed value has higher premiums (Tower on agreed value) | A total-loss payout at market value, which can be less than you still owe, and Tower says agreed value suits cars with money still owing (Tower on agreed value) |
| Fewer optional extras | Extras add to the premium (Consumer Protection), and Tower says removing benefits you don't need could reduce it (Tower's cost guide) | Paying for breakdown help, a rental car or a windscreen excess yourself |
| Paying the year up front | Instalments can cost more (ICNZ on premiums), and Tower says annual payers may get a discount of up to 10% (Tower's cost guide, 8 September 2025) | The whole year's cost at once |
| Telling the insurer about a locked garage or an alarm | Discounts may apply (ICNZ tips) | Nothing, if it is true |
| Asking about other policies with the same insurer | Worth asking (ICNZ tips), but Tower no longer offers a multi-policy discount on new policies (Tower's multi-policy page) | Check what applies before moving policies |
| Choosing the car with insurance in mind | Modified and theft-prone cars cost more (ICNZ tips) | Only works before you buy |
One way to test a higher excess is to price the same quote at two excess levels. The fall in the yearly price is the saving you see on the quote, and the rise in the excess is what you pay extra each time you claim. Dividing the extra excess by the yearly saving shows roughly how many years the higher excess must run before a claim no longer leaves you worse off. Tower adds a practical test: could you pay the excess up front on the day (Tower's cost guide)?
Matching the cover to the car: three NZ examples
Consumer Protection's own examples show the logic well, and each turns on what the car is worth, not on the lowest price (Consumer Protection).
| Car and owner | Cover chosen | Why |
|---|---|---|
| Sade's small car worth $1,000 | Third party | Comprehensive cost nearly as much as the car was worth, and her bigger worry was damaging someone else's expensive car (Consumer Protection) |
| Jarrod's car, bought for $4,000, on a tight budget | Third party, fire and theft | Thefts had been happening on his street (Consumer Protection) |
| Tihema's $12,000 Toyota Wish | Comprehensive, plus windscreen and roadside extras | A repair or replacement would cost more than a year's premium, and she drives long distances (Consumer Protection) |
The pattern in these examples: the less the car is worth, the weaker the case for paying for cover on the car itself. The page gives no premium figures for the three, and neither does this one.
When stepping down a cover level is a real saving
A step down is a real saving when you drop cover you could replace yourself, and a false economy when you couldn't. Three questions separate the two.
- Could you repair or replace the car from savings? With third party, or third party, fire and theft, you pay for repairs to your own car after a crash you cause, such as reversing into a wall. Consumer Protection's worked examples weigh the extra yearly cost of comprehensive against the car's value, with third party chosen where comprehensive cost almost as much as a very low-value car (Consumer Protection).
- Does a finance agreement require comprehensive cover? Tower says it may be a loan condition (Tower: can I drive an uninsured car).
- Who pays if someone else hits you? With third party cover, if an insured driver hits your car and admits fault, their insurer should pay for your repairs (Consumer Protection). If they are uninsured, Tower's two lower levels pay up to $4,000, and only if you can identify the driver who was mostly at fault (Tower's car insurance page).
On Tower's wordings all three levels carry the same $25 million liability limit, so a step down changes cover for your own car, not for damage you cause to others (comprehensive, third party, fire and theft and third party wordings). See third party car insurance, comprehensive car insurance and Tower's car covers for each level.
A low price can hide extra excesses
The excess line of a quote matters as much as the price, because it sets what a claim costs you. Tower's wording says additional excesses apply when the car is driven by, or in the control of, an inexperienced driver, or a driver holding an international licence unless it was issued in a country the NZTA lists as eligible for a practical-test exemption. An additional underwriting excess can also be applied to the policy, and all of them are shown on your certificate of insurance (Tower's comprehensive wording). Two quotes with the same headline excess can therefore cost you different amounts on claim day.
Two other wording details affect the real cost of a claim. Tower charges one excess per event, and where several apply it is the higher one. An optional windscreen and window glass excess buyout makes a glass-only claim excess free (Tower's comprehensive wording). If Tower repairs the car and you pick a repairer outside its recommended network, it may pay you the assessed cost of repair instead of arranging it, so a cheaper policy can come with less choice over who fixes the car.
Savings that can cost you at claim time
Consumer Protection says, citing ICNZ, that very few claims are turned down, but it lists reasons an insurer may question or refuse one (Consumer Protection). Several are shortcuts taken to keep a price low.
- Leaving a driver off. If you name drivers and someone else drives, or a child mostly drives a car insured in your name, the claim may not be paid (Consumer Protection). Tower says to list everyone who will drive the car at least once a month (Tower: what you need before insuring your car).
- Understating how the car is used. Tower's wording covers private use, including getting to and from work, but not business use such as deliveries or fare-paying passengers (Tower's comprehensive wording), and its FAQ says rideshare is not covered by its private or commercial policies (Tower's car insurance page). ICNZ suggests asking about occasional business use, which may cost an additional premium (ICNZ: motor insurance).
- Leaving out modifications, convictions or past claims. Consumer Protection says to tell the insurer about all three (Consumer Protection). Tower's wording says statements must be honest, correct and complete, and Tower can decline a claim, cancel the policy or avoid it as if it had never been taken out (Tower's comprehensive wording).
Comparing two quotes like for like
A cheap quote can come from a lower price for the same cover or from different cover, and only the first is a like-for-like saving. Six things have to match before two quotes can be compared fairly.
- Cover type: comprehensive; third party, fire and theft; or third party only.
- Value basis: market or agreed value, and the agreed figure.
- Excess: the standard excess plus any extra excesses.
- Drivers: whether cover is limited to named drivers or extends to anyone driving with your permission, as Tower's comprehensive wording does unless the under-25 exclusion is chosen (Tower's comprehensive wording).
- Use: private use only, or business use as well.
- Extras: which optional benefits are in the price, and their limits.
The exclusions matter as much as the price, because Consumer Protection and ICNZ both say not to buy on price alone (Consumer Protection, ICNZ tips). This page quotes no premiums, because only a quote on your own details shows what you would pay. The car insurance hub links every guide.
Getting a quote from Tower online
The quote asks for your registration number, your licence, any claims or accidents in the last three years, where the car is parked and who else drives it. QuoteHub's link opens Tower's online quote, Tower's own quote tool, where you choose the cover level and any optional benefits. Other insurers sell car cover too, and a second quote built on the same details is what makes a comparison like for like.
Questions people ask
Which insurer has the lowest car insurance price in NZ?
No single insurer is lowest for everyone. Tower says there is no definitive answer, because each insurer prices on the factors it considers most important and can price the same cars very differently (Tower: what is comprehensive car insurance), and it suggests getting a couple of quotes from different insurers (Tower's cost guide). The fair basis is the same cover type, value basis and excess.
Is third party enough for an older car?
It can be if you could replace the car yourself. ICNZ and Consumer Protection both suggest third party, or third party, fire and theft, for lower-value cars (ICNZ tips, Consumer Protection).
Does paying monthly cost more than paying annually?
It can. ICNZ says instalments can cost more than paying once (ICNZ on premiums), and Tower says annual payers may get a discount of up to 10% (Tower's cost guide, 8 September 2025). Both prices can be seen on the same quote.
Is a higher excess always worth it?
Only if you could pay it on the day and don't expect to claim. ICNZ says a higher excess is only beneficial if you don't claim (ICNZ tips).
Can I switch car insurance part-way through the year?
Tower's wording lets you cancel online, by phone or email, with any unused premium refunded, and other insurers' terms differ, so check yours. The overlap between policies matters: Tower's wording excludes loss that another insurer's policy also covers, and applies a 72-hour stand-down to storm, flood and similar damage unless the policy starts straight after another that covered those risks (Tower's comprehensive wording).
Adviser's view
QuoteHub's read: a lower quote is only a saving if you can name what was traded for it, whether the cover type, the excess, the drivers or the extras, and could live with that trade on claim day.
Get a Tower quote online
Tower’s own quote opens in a new tab. House, contents, landlord, car and boat cover can be quoted together in one go.
Tower Easy Save: save $400*
- $200 off house or landlord
- $100 off comprehensive car
- $100 off contents
*$400 is made up of individual policy discounts, each available separately. New, eligible policies only with promo code EASYSAVE. Excl. contract works. Ends 30 Jan 2027. Ts&Cs apply. Tower’s Easy Save terms, checked 6 October 2026.
QuoteHub is a Tower partner. If you buy through this link, Smiths Insurance & KiwiSaver may receive a commission from Tower. Buying online is not financial advice.
Cite this page QuoteHub NZ (2026). How to Pay Less for Car Insurance in NZ. www.quotehub.co.nz/car-insurance/cheap-car-insurance-nz. Updated 2026-10-07.
References
- ICNZ: Motor insurance
- ICNZ: Tips to reduce your motor insurance premiums
- ICNZ: What makes up your premium?
- Consumer Protection: Car insurance
- Tower: What affects car insurance costs in NZ? (8 September 2025)
- Tower: Market value vs agreed value (13 November 2020)
- Tower: Multi-policy discount
- Tower: Car insurance
- Tower: Can I drive an uninsured car? (11 August 2025)
- Tower: What you need before insuring your car (8 September 2025)
- Tower: What is comprehensive car insurance? (22 August 2025)
- Tower: Comprehensive car cover policy wording (09-24)
- Tower: Third party, fire and theft car cover policy wording (09-24)
- Tower: Third party car cover policy wording (09-24)
Explore related pages: Life Insurance, Income Protection, Health Insurance, Trauma Insurance, What You Get.