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How can I reduce the cost of my car insurance?
Find out how to lower your car insurance premiums without missing out on the cover you need.
When shopping for car insurance, there are a number of factors that will affect the cost of your car insurance premiums. You might not be able to do anything about your age or where you live, but there are other ways you may be able to reduce the cost of your car cover. Read our guide to find out how.
What's in this guide?
- Shop around for the best car insurance for you
- Buy online
- Car insurance policies in Singapore
- Consider your cover level
- Build up your no-claims discount
- Increase your voluntary excess
- Avoid paying by direct debit
- Don't auto-renew
- Choose an insurance-friendly car
- Park in a secure location
- Think about how often – and how far – you drive
- Frequently asked questions
Shop around for the best car insurance for you
One of the easiest ways to lower the cost of your car insurance is to shop around and do your research. Consider whether you’re getting the best deal for you by comparing the price as well as the cover features. Choosing the cheapest policy won’t necessarily offer you the best deal for you, as there may be features missing that you really need.
Many insurers will offer discounts to customers for buying car insurance online. This is often the case for new customers. You’ll need to read the policy details carefully and double check that you have entered all the correct information for you and your car, as you could risk invalidating your insurance if an insurer believes you’ve not been completely accurate with any information.
Car insurance policies in Singapore
Consider your cover level
There are three levels of car insurance on offer:
- Third party only. This is the lowest level of cover needed to be on Singapore roads. You’ll be covered for damage to third party vehicles or property if you cause an accident. However, it won’t offer any cover if your own car is damaged.
- Third party fire and theft. This cover level offers the same as the lowest cover level with the addition of protecting your car if it’s stolen or damaged by fire.
- Comprehensive. This is the highest level of cover available and offers the same protection as the lower levels in addition to offering cover for your own car if damaged or vandalised.
Contrary to what you might expect, comprehensive cover can be cheaper than third party or third party, fire and theft so it’s always worth checking. This is because of the risk profile of many people who get third party insurance. Read more about how comprehensive insurance works.
Build up your no-claims discount
Every year that you drive and don’t make an insurance claim, you’ll be rewarded with a no-claims discount. Depending on which insurance provider you’re with, you can expect to build up between five to eight years of no-claims bonus discounts.
While this discount can only be built up over many years, you may be able to protect your big bonus by adding no-claims bonus protection onto your car insurance policy. This will usually cost you an additional amount for the enhanced protection but you may decide this extra small fee is worth it if you risk losing your discount for making a claim later on.
Increase your voluntary excess
Your insurance excess is the amount of money you will need to pay towards a claim. Your insurer won’t pay out for a claim that costs less than this amount. A compulsory excess amount might vary depending on the age of you or your car and your driving experience.
A voluntary excess is usually added on top and can normally be set by you when taking out a policy. You’ll have the option of adding or increasing a voluntary excess, which should lower your premium. Be careful about making an excess too high, as it could leave you out of pocket if damage occurs.
Avoid paying by direct debit
Spreading the cost of your car insurance over the year might help with cashflow issues. However, if you choose to pay by direct debit, say, on a debit card, you’re likely to be paying for the insurance plus interest on the full amount as well. You’ll end up paying more in the long run so paying for your car cover in one lump sum could actually be the cheaper option.
Don’t be fooled into thinking that you’ll get the best deal by auto-renewing on your car insurance. In fact, it always pays to shop around and do your research to compare deals. Consider whether you’ll get a bigger discount as a new customer with a new insurer or whether your current insurer is willing to revise its deal and offer a better one.
Choose an insurance-friendly car
If you want to keep car insurance premiums low, you’ll need to carefully consider the car you drive. New cars are often given an insurance group rating to help insurance providers decide how to calculate car insurance premiums. The rating essentially tells insurers which cars are the most expensive cars to cover as well as which ones are the cheapest to cover.
There are multiple different car insurance groups into which cars can be allocated. The lower the rating, the cheaper that car is to insure. These ratings tend to be based on the following:
- Original sale price
- Security level
- Price of parts
- Price of repair work
Choosing to drive a smaller car with a lower rating is likely to also lower your premiums, although remember that the other factors such as your age, location and driving experience will also be reviewed before calculating your premium.
Park in a secure location
Cars kept in garages are cheaper to insure than those parked on the street. It might be worth putting your car in a garage or carport or renting a garage space from someone in your neighbourhood, not only for reduced premiums but also to reduce the risk of making a car theft claim.
Think about how often – and how far – you drive
You may be able to state a lower annual mileage cap than the previous time you bought cover and, in turn, this could save you money. You could get a low mileage discount if you drive less than a certain number of miles a day, or an overall figure in a year. If you’re close to the low mileage threshold, see if you could reduce or combine your trips or carpool to lower your miles.
Frequently asked questions
How else can I save on my car insurance?
A few of the biggest opportunities for savings aren’t possible in the short term, but they could help you get cheaper car insurance the next time you shop around.
- Improved credit score. If an insurer is able to factor in your credit score when setting your rates and your credit score has improved to the next tier, it could help to save you money.
- Drive safely. It’s easier said than done, but if you keep your claims history and tickets to a minimum, you’ll save a bundle.
- Wait for accidents and tickets to drop off your record. It’s a good time to shop after claims or tickets are no longer counted against you, which is typically after three to five years after you got the ticket.
How much can I expect to pay for my car insurance?
Your individual circumstances, your car and the policy you choose will affect the price you pay for car insurance. You can’t draw up your own policy and set your own prices, but you can take control of many of the factors affecting the cost of your car insurance, and reduce costs by following some of the tips in this guide.
How do I choose the best car insurance?
It’s a good idea to work out what you want from your car insurance by deciding on the level of cover. After you’ve decided on a cover level, shop around and compare your options from the insurers willing to offer you and your car cover.
The cost will no doubt play a big part for you, but it shouldn’t be the only detail you consider. As well as the price, look carefully at the policy benefits. If something goes wrong, the cheapest policy might not offer you the best cover so keep that in mind when shopping around.Back to top
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