Owning a car in Singapore requires deep pockets, from the eye-watering COE fees to the vehicle’s upkeep. While some car-related expenses such as the mandatory car insurance are non-negotiable, it is possible to shave off some car insurance costs if you know how!
Car insurance in Singapore is a necessary expense for every vehicle owner, but it can take a significant portion of your budget. Car insurance depends on your age and gender, with motorists in 20s paying $2,200 on average and motorists in their 60s paying approximately $1,900. With the rising cost of owning and maintaining a car in Singapore, finding ways to reduce your car insurance premiums is an important step toward managing your finances. Fortunately, you can use several practical strategies to save on car insurance without compromising on the coverage you need.
Here are some tips on how to cut your car insurance costs!
Shop Around
With so many car insurance providers in Singapore, each offering different policies and prices, the best way to cut costs is to compare them. Use comparison websites to check rates across various insurers, and compare between different types of payment modes, annually versus monthly, to determine what suits your needs better. You can also check on the authorised/approved workshops under various insurers to check on rates. Some may even offer promotions or discounts for new customers, which can help you save even more.
Take Cover
Offered by some insurers, comprehensive insurance covers the repair or replacement of a vehicle upon damage or loss, and also claims from third parties for damage to property and people, though the premiums are higher as the vehicle gets older.
In Singapore, basic car insurance – Third-Party Only (TPO) – is mandatory, but many drivers go for Third-Party, Fire and Theft (TPFT) or Comprehensive coverage for added protection. While comprehensive insurance seems safer, it may not be necessary for older cars with low market value, as TPO or TPFT could be more affordable and sufficient.
Then again, if you do not want to pay more for damages and be lighter on your wallet, comprehensive insurance covers more – own car damage, other’s car damage, other’s injury. However, not many insurers offer comprehensive for cars older than 15 years.
Stay Clean
The No-Claim Discount (NCD) rewards you for claim-free driving, with discounts of up to 50% after five years with some insurers. Thus, avoid filing small claims that could reduce your NCD – consider paying for minor repairs out of pocket instead. If you are not at fault, any claims you make will not affect your NCD.
Some insurers also offer NCD protection, allowing you to keep your discount even if you make a claim. With the protection, one claim during your insurance period with the same insurer, you still have your 50% NCD, two claims 20%, and three claims none. If you switch insurer, you may only get 20% at one claim and none at two claims or more.
Excess Success
Your excess, or deductible, is the amount you pay before your insurer covers the rest in the event of a claim. If you are a careful driver, you can consider choosing a higher excess to significantly lower your premiums since you are taking on more risk. Just make sure you can afford the excess if you need to make a claim!
Deals and more Deals
Many insurers in Singapore offer discounts for safe drivers, good NCD records, or cars with anti-theft devices. You might also find early-bird discounts if you renew your policy early, or promotions during specific periods. Keep an eye out for deals that tie up with your credit card, which could help you save even more.
Go Solo
Adding extra drivers to your policy, especially younger or less experienced ones, can raise your premiums. To save, limit the number of additional drivers, or make sure only experienced, low-risk drivers are listed. Some insurers offer cheaper options for occasional drivers. However, do note that if any drivers not listed in your motor insurance gets involved in an accident, you will not be able to claim against your insurance.
Pay As You Drive
If you don’t drive often, a usage-based insurance (UBI) plan may suffice. UBI calculates premiums based on how much and how safely you drive. For those who only drive occasionally, like retirees or weekend-only drivers, UBI can mean big savings! The difference between UBI and traditional insurance is how much and how safely you use your car, the rest like NCD, general coverage options are still the same, as well as the claims.
Choose Your Vehicle Car-fully
The car you drive affects your premiums. Luxury, high-performance, or larger vehicles generally come with higher insurance costs due to expensive repairs and parts. Before buying a car, research how different models affect insurance rates. Opting for smaller, more common models can save you money in the long run.
Of course, if you’re already forking out the big bucks for a fancy car, a heftier insurance plan should be the least of your concerns! Also, if you modify your car, you must declare to the insurer, regardless of whether the modifications are LTA approved or not. Even with declaration, depending on insurers, some may charge more, but some may not even insure your modified vehicle. So, think twice before you slap on that spoiler or side skirt.
Review And Reduce
It’s a good idea to review your car insurance policy annually to make sure you’re still getting the best deal. Over time, factors like your NCD, changes in your driving habits, or new insurance providers could lower your premiums. Regularly reassessing your coverage and switching providers if needed can prevent you from overpaying.
Smart Decisions Pay Off
Cutting car insurance costs in Singapore doesn’t mean sacrificing the coverage you need. By comparing policies, maintaining a good NCD, selecting the right coverage, and considering usage-based insurance, you can reduce your premiums while staying protected!
Automobile Association of Singapore has a range of insurance plans under the Insurance Agency. AAS-IA is a wholly-owned subsidiary of AA Singapore offering motor insurance. Visit https://aas.com.sg/insurance/motor-insurance/ for more information.
