The cost of your green slip depends on the insurer, you and your vehicle. Find out what factors affect the price of your green slip.
Insurers set greenslip prices
There are six CTP insurers in NSW and they set green slip prices, not the government.
These insurers submit green slip prices to the State Insurance Regulatory Authority (SIRA) at least once a year. SIRA can reject these prices only if they don’t meet NSW CTP guidelines. If insurers want to change their prices at other times, they must first notify SIRA.
SIRA’s role is to ensure the CTP scheme is competitive and green slips are affordable. Greenslip prices have become more competitive since a new insurer, Youi, entered the market in December 2020.
Greenslip prices vary from insurer to insurer because they have their own ways of assessing and pricing risk.
What factors affect greenslip prices?
While insurers assess risk in different ways, some common primary factors affect greenslip prices:
- Area where you (vehicle owner) live
- Your age
- Age and gender of youngest driver
- Driving experience of youngest driver.
- Whether it is currently registered
- Type and shape of vehicle you drive
- Age of your vehicle
- How far you travel in it each year
- Private or business use
- Other motor insurance and no-claim bonus on the vehicle.
Driving and claims history
- Number of demerit points on your or youngest driver’s licence
- Road accidents that were your fault, in the last 3-5 years
- Any licence suspensions or restrictions in the last 3 years
- Drug and alcohol convictions in the last 3 years.
Why does my vehicle affect the price of my green slip?
Insurers often charge more for Utes and light commercial vehicles than they do for motor cars. This is because insurers receive more claims and these claims are costly.
Generally, vans are classified as light goods vehicles. Some SUVs and 4WDs are also classified as light goods vehicles because of their size and capacity.
If you are uncertain about what type of vehicle you drive, one of these shape codes appears on your registration renewal:
- Light goods vehicle codes – PVS, PVW, PVN, TT, TTF, UTE, VAN
- Motor car codes – CON, COU, FCV, HRS, PVF, SBS, SED, SNO, TWC, WAG.
Why does using my car for business affect the price of my greenslip?
When you use your car for business, the cost of your CTP green slip will be higher. This is because you can claim an input tax credit for GST. SIRA allows insurers to charge a higher price for the greenslip because it costs insurers more to account for GST. Moreover, they don’t receive an input tax credit for GST when they pay claims.
Any individual or organisation registered for GST must pay a fixed percentage loading on the price of their greenslip. Regardless of personal risk factors, insurers have to charge the same percentage for each vehicle type and geographic area.
Always notify your insurer if you change the primary use of your vehicle.
Why does the youngest driver affect my greenslip price?
Driver age is a really important factor in the price of your CTP green slip. This is because younger drivers are more likely to be involved in an accident. Young people on P plates tend to take more risks while driving, such as speeding or tailgating:
- One fifth of deaths are P1-plate drivers even though they are only 3% of all drivers
- P1-plate drivers die at twice the rate of all drivers
- The first month of driving with P1-plates is the riskiest time.
Conversely, L-plate drivers are among the safest because they are under adult supervision. Even if the youngest driver is a learner driver, you still need to advise the insurer.
Is my green slip cheaper if there is no youngest driver?
This is a common misunderstanding. Insurers simply need to know the age of the youngest person driving the vehicle. Even if you are the only driver of a vehicle, you are the youngest driver. This means you need to give your age as the age of the youngest driver.
The cost of your green slip depends on the insurer, you and your vehicle. Insurers set prices and have different ways of assessing risk. They will consider your age, driving and claims history and your vehicle. Some important factors are vehicle type, whether it is for private or business use, and the age of the youngest driver.
To find out the cost of your greenslip, you need to compare prices for all six insurers based on your specific vehicle and details.
Have you ever wondered why you need a green slip? Do you know what your green slip covers and doesn’t cover? Do all insurers offer the same green slip? These are all good questions you ask that greenslips.com.au will answer.
This is the fourth article in our 8-part series, How greenslip insurance works. Read the third article, Do all greenslip insurers cover me if it’s my fault?