If your car is worth $8,000, comprehensive insurance could cost you $700 to $1,000 every year. That is roughly 9 to 12 cents of every dollar the car is worth, just in premiums. For a vehicle that age and mileage have already depreciated, that ratio matters more than most drivers realise.
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This article is general information only and does not constitute professional advice. For your specific situation, consult a qualified professional.
The three main cover types in New Zealand — comprehensive, third party fire and theft, and third party only — each land differently depending on what your car is worth and how much risk you can carry yourself. Comprehensive covers damage to your own vehicle plus damage you cause to others. Third party fire and theft covers your car if stolen or damaged by fire, plus third party damage, but not collision damage to your own car. Third party only covers damage you cause to other vehicles and property, and nothing for your own car. ACC covers personal injury from road accidents, but not a cent of vehicle damage.
What I tend to notice is that most drivers with older cars never run the numbers on whether comprehensive is actually worth the premium. They renew year after year without checking whether the payout they would get justifies what they are paying. The gap between the cheapest and most expensive quote for the same driver and vehicle can run into hundreds of dollars, and comparing cover types side by side is the only way to see where your money is going. Here is what you actually need to know.
What comprehensive, third party fire and theft, and third party only actually cost for different car values
Premiums vary by driver age, location, driving history, and insurer, but the pattern is consistent. For a 35-year-old driver with a clean record in Wellington, the annual premiums for an $8,000 car, a $20,000 car, and a $35,000 car show where the value tipping point sits. The numbers come from Moneybalance’s NZ car insurance guide and are indicative — your own quotes will differ, but the ratios hold.
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| Car value | Comprehensive (annual) | Third party fire & theft (annual) | Third party only (annual) |
|---|---|---|---|
| $8,000 | $700–$1,000 | $250–$400 | $150–$250 |
| $20,000 | $900–$1,400 | $300–$450 | $150–$250 |
| $35,000 | $1,200–$1,800 | $350–$500 | $150–$250 |
| $60,000 | $1,800–$2,800 | $400–$600 | $150–$250 |
Notice that third party only barely moves with car value — it covers other people’s property, not yours, so your own car’s worth is irrelevant to the premium. Comprehensive, by contrast, nearly doubles between an $8,000 car and a $35,000 car. For an older vehicle sitting at the lower end of that scale, the question is straightforward: are you comfortable paying $700–$1,000 a year to protect a car that might only be worth $6,000–$8,000 if it were written off tomorrow?
What I would do is calculate your own ratio right now. Take your annual comprehensive premium, divide it by what you could realistically sell your car for today. If that number is above 12%, run quotes for third party fire and theft and third party only from at least three providers. The Quashed guide on car insurance for seniors shows that the gap between insurers for identical cover can be nearly $100 a month — over $1,100 a year — for the same driver at age 80. That spread exists at every age, not just for seniors.
Three mistakes people make with older vehicle insurance
Renewing without checking whether your cover level still fits
A car that was worth $15,000 five years ago might be worth $6,000–$8,000 today. If you are still paying comprehensive premiums based on that original value, you are almost certainly overpaying. The research shows that for cars under $8,000, third party fire and theft or third party only is usually the better fit. Run the premium-to-value ratio at every renewal. If it has crept above 12%, switch cover levels. The process is straightforward: get a quote for the lower cover type from your current insurer first, then compare two or three others. Most insurers let you change cover level mid-policy, but the cleanest time to do it is at renewal.
Choosing market value without understanding what it means for an older car
Market value sounds fair — you get what the car is worth at the time of loss. But for an older vehicle, “what it is worth” is whatever the insurer’s valuation system says, not what you could sell it for or what you have spent maintaining it. The gap between a Trade Me listing price and an insurer’s payout can be thousands of dollars. Agreed value removes that uncertainty. You pick the figure, the insurer agrees to it, and that is what you get in a total loss. The premium is usually a little higher, but for a car you have looked after, it is often worth the difference. If you are not sure which your policy uses, check your schedule of insurance — it will say “agreed value” or “market value” explicitly.
Assuming comprehensive covers mechanical breakdown
Standard car insurance — including comprehensive — does not cover mechanical or electrical failures. If your engine blows or the transmission goes, you pay the full repair cost yourself. For older vehicles out of manufacturer warranty, that is a real gap. Mechanical breakdown insurance (MBI) fills it, covering sudden, unforeseen faults in the engine, transmission, steering, electrical systems, brakes, air conditioning, and fuel system. Providers like Autosure cover vehicles up to 20 years old with under 200,000 km; Autolife accepts NZ-registered vehicles from 2000 onwards with under 200,000 km. MBI is a complement to car insurance, not a replacement, and requires regular servicing per manufacturer recommendations to keep claims valid. If you rely on an older car and do not have savings for a major repair, MBI is worth a quote alongside your main policy.
How to choose the right cover for your older vehicle
Run the premium-to-value calculation first
Write down your car’s current market value — use Trade Me sold listings or a site like AA’s car valuation tool. Then divide your annual comprehensive premium by that number. If the result is above 0.12 (12%), third party fire and theft or third party only is likely to save you money over time. For cars worth under $5,000, third party only is the default starting point unless you have a specific reason to insure your own vehicle — a loan requirement, for example, or a modified car you want to protect.
Get at least three quotes from different insurers
The research shows that AA Insurance, Trade Me Insurance, and Youi can differ by 20–40% for the same driver and vehicle. AMI and State (both owned by IAG) offer strong multi-policy discounts if you bundle home or contents insurance. Tower uses risk-based pricing and has a straightforward digital claims process. For older vehicles, Trade Me Insurance and Youi often come out cheapest on comprehensive, while AMI, State, and Trade Me are competitive for third party cover. Get quotes from at least three of these. The process takes 15 minutes and the average saving is $404 a year.
Decide between agreed value and market value
For an older car you have maintained, modified, or simply kept in good condition, agreed value gives you certainty. You and the insurer fix a payout figure when you take out the policy, and that is what you receive in a total loss — no arguments about depreciation. Market value pays whatever the insurer decides the car was worth at the time of loss, which for a 10-year-old vehicle is almost always less than you expect. The premium difference is usually modest. If you want to know exactly what you would get back, choose agreed value. If the car is a runabout you would replace with something similar without fuss, market value keeps the premium lower.
Check your excess and adjust it to fit your budget
Raising your excess from $500 to $1,000 can reduce your premium by 15–25%. The trade-off is that you pay more out of pocket if you claim. For an older vehicle where the premium-to-value ratio is already borderline, a higher excess can tip the scales back in favour of keeping comprehensive cover. Just make sure you have the excess amount saved and accessible. Some insurers also charge additional excesses for young drivers or at-fault accidents — read the excess conditions before you buy, not after.
Consider mechanical breakdown insurance for older cars
If your car is between 5 and 20 years old and you do not have a manufacturer warranty, MBI covers the big-ticket repairs that standard insurance ignores. Engine, transmission, steering, electrical systems, brakes, air conditioning, and fuel system are all covered under a typical MBI policy, provided you have kept up with the manufacturer’s service schedule. The cost varies by vehicle age, make, model, and mileage — luxury and European vehicles cost more. For someone who relies on an older car for daily transport and does not have a few thousand dollars set aside for a sudden repair, MBI is worth a quote alongside your main insurance renewal.
Is car insurance legally required in New Zealand? ▾
What happens if an uninsured driver hits my older car? ▾
Does my licence renewal affect my insurance after age 75? ▾
Can I add a young driver to my policy on an older car? ▾
Does comprehensive cover my car if I crash into a fence? ▾
What is the difference between agreed value and market value for an older car? ▾
The real cost of not reviewing your cover
The national average comprehensive premium in New Zealand is $1,311 per year, according to Q2 2026 data. In Auckland it is $1,510; in Canterbury it is $1,189. For a car worth $6,000, that Auckland premium works out to 25% of the vehicle’s value every single year. At that ratio, you are effectively paying a quarter of the car’s worth to insure it annually. The same driver on third party only would pay $150–$250 — roughly 3% of the car’s value. Over three years, the difference is enough to buy another older car outright.
The decision is not about whether insurance is important. It is about whether the specific cover you are paying for still fits the car you are driving. Cars depreciate. Your policy should reflect that. If it has been more than a year since you last compared quotes or reviewed your cover level, the odds are good that you are overpaying. The 79% of drivers who found cheaper cover by comparing did not do anything complicated — they just ran the numbers.
Remember: this article is general information only. For advice on your specific situation, speak to a qualified professional.
If this was useful, you might also want to read how to save money on third party car insurance in NZ.
Sources and Further Reading
How your postcode affects car insurance premiums in New Zealand — A closer look at why location drives premium differences and how to factor it into your choice.
How to fight car insurance claim denials in New Zealand — What to do if your claim is declined and how the process works in practice.
Moneybalance (2025). Car Insurance NZ — Types, Costs and Which to Choose. 🔗
Moneybalance (2026). Best Car Insurance NZ 2026. 🔗
Quashed (2026). Car Insurance for Seniors NZ — A Complete Guide. 🔗
