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Factors that Determine your Car Insurance Price - DirectAsia

how much is car insurance

So you’ve just purchased a car and is now on the hunt for the cheapest car insurance. You might have been on various insurance websites, asked for a quote, but realized that the prices are different from your best buddy Andy’s? How much is car insurance supposed to cost, actually?

Well, turns out that your car insurer gauged you and Andy differently in terms of your risk profile. So is there a way to lower your car insurance premiums? It helps to know the determining factors so you might be able to work on some of them to reduce the amount you pay for car insurance.

Here are the 7 factors that decide how much your car insurance will cost:

Driver’s Profile

1. Age of driver - Being able to afford a car when you are young might be an achievement in Singapore, but your insurer thinks otherwise. Premiums are typically higher for drivers under 30, and of course, for older drivers over 70.

2. Gender - always criticising your female friends for being lousy drivers? Here’s the fact: women are deemed to be more careful drivers! This is why female drivers usually pay lower car insurance premiums across all ages - industry data shows that women typically pay between $10 to $60 less per year than their male counterparts.

3. Driving experience - Although objectively having driven for a longer period does not automatically make you a better driver, insurers do see a clear advantage for insuring someone who has many years of driving experience, especially if you have an exceptionally clean record as well.


4. Type of vehicle - generally speaking, a bigger car engine translates to a higher premium. This also means be prepared to pay more if you are driving a luxury car.

5. Age of car - It seems intuitive to assume older cars will cost more in terms of insurance coverage, but the truth is it really depends on the type of coverage as well. Using 10 years as a gauge, premiums are actually quite stable throughout until the 8th year.

Car Insurance Type

6. Coverage - needless to say, the more comprehensive the coverage, the higher the premium you’d need to pay. For those new to car insurance, there are basically three types of coverage you can choose from

  • Comprehensive - Comprehensive car insurance is the most complete cover you can get; it shields you from the daily dangers you face on the road, protects your car and others. It also protects you against rare dangers like fallen trees, floods and natural disasters. At Direct Asia, you get to choose from our 3 driver plans and all of the optional benefits we have to offer. Extend your cover with popular options like Loss of Use, Modification Cover and 24 Hour Breakdown Assistance and add-on coverage only as you deem fit. And for those who extended their COE, knowing you want to take good care of your 10-15 year old car, you can also get comprehensive policy from us.
  • Third-Party Fire and Theft - Third-Party Fire & Theft (TPFT) plan is a good compromise cover for those who don't want the full benefits of comprehensive, but still want to be covered against fire and theft.
  • Third-party only - Third-Party Only (TPO) is the minimum requirement for you to drive under Singapore law. As you might know, the price for this is the cheapest, but it also offers the least protection. This plan only pays when you’ve damaged another person’s car. You will be responsible for any repairs to your own vehicle. This plan is best for experienced drivers of cars at the end of their COE life.

Eligible Discounts

7. No-claim Discount - for many things in life, having a discount is like icing on the cake, nice to have but non-essential. If you are new to car insurance, then you’d need to know that no-claim discounts (NCD) is an essential to help shave off the price of your car insurance.

An NCD is a discount on your premium if you haven't made any claims on your policy during the current period of insurance. You may still be entitled to a No Claim Discount even if you have made a claim, provided you are not liable for the accident. Generally, your NCD will be increased by 10% every year if you stay claim-free, up to NCD 60 which is the highest no claim discount level in Singapore and only available at DirectAsia. Most other insurers offer up to NCD50 and NCD60 gives you an additional 10% discount.

While you can't control certain factors like your age or gender, there are some factors you can work around to keep your car insurance premiums low. Keep a clean driving record and choose the right coverage according to your needs. To find out how much your car insurance will cost, get a free quote now or call 6665 5555 to find out more.