Buying a new car can be fun, but paying all the costs associated with owning a new car certainly isn't. In addition to registration and fuel, insurance is an ongoing cost you can't shake.

Some insurers are taking advantage of crash-reducing safety features now standard or optional on a range of new vehicles as a carrot to bring in customers keen to reduce their insurance premiums.

IAG (Insurance Australia Group) is one of those organisations. Representing NRMA Insurance, SGIO, SGIC and RACV, IAG works with manufacturers to test their vehicles for compliance and then issues risk-based premium reductions for their insurance customers.

We joined IAG at Sydney Motorsport Park to test the Volvo XC60, Kia Sportage and Mazda 2 across a range of speeds to see whether the systems were up to the task.

IAG tests AEB systems against two car bodies: a Toyota Camry and a Nissan Navara. Both bodies were taken from real, front-end crashed cars, to simulate the same metal profile and radar signature as their full-bodied road vehicles.

According to Chris Emerson, senior information specialist at IAG, the goal of the program is to improve safety on the road and reduce the risk of crashes.

"As an insurer, road safety is a fundamental priority for our business and we believe we have a role in helping to reduce collisions on our roads," said Emerson.

"IAG’s Research Centre carries out physical testing on AEB technology for safety and assurance. This means drivers are eligible for reduced risk ratings on their car insurance policies or renewals with NRMA Insurance, SGIO, SGIC and RACV."

AEB technology works by scanning the road in front of the driver to reduce the severity or eliminate crash potential altogether with self-braking functions.

While it may be good technology, not all vehicles fitted with AEB operate the same way. Some systems only work at city speeds, while others work at highway speeds to mitigate or prevent crashes.

With IAG's testing only conducted at speeds up to 30km/h, it's worth keeping in mind that you should be buying the safest car you can with your money, which means picking a car with an AEB system that works up to highway speeds.

Each of the vehicles tested on the day passed with flying colours, making them eligible for a reduced-risk rating, which in turn reduces premiums.

How much of a reduction should buyers expect? IAG wouldn't specify exact dollar amounts, but said that premiums displayed for these vehicles include the risk rating reduction as part of the quotation.

In order to encourage manufacturers to include this technology as standard, IAG will only offer a premium reduction for models that include AEB as standard fitment, as opposed to those that have it available as an option.

Despite the IAG providing discounts for vehicles with this safety technology, it's always worth shopping around to get the best deal and mentioning to your insurer that your vehicle is fitted with this technology.