Given how car insurance is mandatory in Singapore, most car owners deem it a necessary expense without giving further thought as to how much they’re paying for it. But if you’re in a financial fix and need to take out a cash loan to pay your bills, this may not be an option for you. In fact, in this highly competitive modern-day insurance market, one would be foolish not to take advantage of methods to lower car insurance premiums.
Still, relying on a bare-bones insurance policy can result in an undesirable outcome when the situation actually calls for it. Here’s the right way to go about reducing one’s car insurance costs.
1. Shop around
More often than not, car buyers purchase their car insurance policy through their dealer. While this makes economic sense in the first year, these policies tend to be priced higher than the market price of most car insurance products sold locally. Knowing this, there’s no reason to stick around with an insurance company that doesn’t bring one benefits. Don’t hesitate to shop around for a cheaper policy online when the time comes to renew your car insurance. Before all that—determine what kind of coverage you’re looking for. It’s possible to save a significant amount just by going with a lower coverage level that omits coverage for events or accidents that are less likely to happen.
The cost of premiums one has to pay for differs from company to company and is dependent on factors like age, gender, marital status, occupation, driving experience, claims history in addition to the age, make & model, and usage frequency of the car. Make sure to get quotes from different insurers and go through the terms and benefits of each policy thoroughly. An insurance comparison site like SGP Car Insurance can help you compare features and prices provided by insurance companies so you end up with the best deal.
2. Maintain your NCD & safe driving record
It’s hardly surprising for insurers to prefer safe drivers who don’t end up in accidents and file claims. As long as one doesn’t file a claim for a year, there will be a 10% discount on the premium for the following year, going up to 50% off once one has done so for 5 years or longer. Those who do end up making a claim after 5 years risk having their No-Claims Discount dropping back to 20%. Some insurers do offer a one-time NCD protector at an added premium that safeguards one’s NCD in the event of an accident for which the insurer has to pay out a claim amount.
That’s not all a squeaky clean safe driving record can do for you—just the habit of driving safely can contribute to a lower premium. This is because insurance companies look at the number of demerit points a driver has accumulated within a period of four to five years. Car owners who succeed in avoiding any traffic violations for three years can look forward to a certificate of merit issued by the Singapore Police which entitles them to a discount of 5% off their car insurance premium and NCD.
3. Adjust the excess on your premium
As a general rule of thumb, expect to fork out an expensive premium for more extensive coverage. If you’re looking to buy an insurance policy that covers the cost of damage in its entirety, be prepared to pay sky-high car insurance premiums each month or year (depending on your payment plan). Those with fantastic safety records, on the other hand, might be confident enough to take their chances and save money on their auto insurance policy.
Otherwise known as a deductible, excess is the maximum amount an insured is required to pay in the event of an accident serious enough to warrant a claim. A higher excess equates to lower premiums—meaning that one takes on more financial risk if an accident does occur. Nevertheless, as long as you’re not reckless in driving, raising the excess of your policy may be a better and more affordable option in the long run. Be prudent in making adjustments to the excess—you don’t want to end up wasting unnecessary money or becoming too afraid to drive your car!
If all else fails and you do—touch wood—end up in an accident where damage reparations, costs and hospital bills add up into an amount you can’t afford to pay for, rest assured. A short term loan can help you resolve the issue; you’ll just have to save up a little and pay back the amount in a year’s time!