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Factors that Affect the Car Insurance Rates in Singapore | Quick Guide

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Factors That Affect Car Insurance Rates in Singapore

Reading Time: 6 mins

In Singapore, Car Insurance is obligatory under the Motor Vehicles (Third-Party Risks and Compensation) Act. This enforcement is very reasonable since it protects you from being financially liable for any damage you cause to someone's vehicle (or your own) or if you injure a person with your car. With that being said, you may want to choose a trusted car insurance company like DirectAsia, which provides the best car insurance at an affordable price.

But first, you must know what factors affect the insurance rate regardless of which insurance company you choose. (Have your friends paid less money for insurance when you all bought it from the same company?) Your risk profile plays a vital role in varying rates. Following are some of the common factors that determine the car insurance rates in Singapore:

Car's Age

A car's age serves as a significant factor affecting car insurance rates because it can be high when it comes to the latest models. The latest parts are costlier, so any repair or replacement cost is comparatively higher, hence it affects the premium you pay. As for the old models, their rates are lower since most car parts are readily available and cheap. It’s a general rule that the car insurance rates go lower as the car’s age goes up. However, it’ll stay at a minimum when it’s reached a certain age (typically 10 years or more).

Make and Model

Another factor that affects car insurance rates is the make and model of the car. If your vehicle is made in Asia, you can expect low insurance rates. However, if you own a car imported globally, such as a European-Branded car, you can expect higher insurance rates because of the importing fees and expensive parts. Insurers also provide cheap car insurance if your vehicle has a smaller engine (Capacity measured in CC).

Driving History & Experience

If you have been driving for fewer than 2 or 3 years (depending on theinsurer), you’ll have to pay higher insurance premiums because of less experience. You’ll spend less if you’re driving for more than the mentioned span, but the reduction of the rate will be limited after a specific time. For example, you won’t be paying significantly lesser than a driver with only 6 years of experience, even if you have more than 10 years of experience.

Insurers also keep track of when you acquired your license. If you passed your driving test long back which shows your experience, accordingly your premium may be low.   


Studies have revealed that male drivers are more prone to accidents than female drivers. Females are considered to be extra careful drivers, hence, a lower risk. Most Insurance companies have higher rates for the male while offering lower rates for the female. But depending on the company you sign up for, you may see cheaper rates (for males) that go against the general factor. This can rely on policies as well, so it pays to be informed about them.


When insurance companies check on their applicants, they'll also take note of their car’s usage. Do they use their car at work? Do they drive less often when going to work? For example; the rate can vary between a delivery driver and an office executive. If you're a delivery driver, your job requires more vehicle usage i.e. more risk of damaging the vehicle. In contrast, an office executive drives for a minimum period throughout the day, hence relatively less rate will be applied.

DirectAsia low mileage policy only covers cars that have travelled less than 8,000 kilometres in a year.

Driver's Age

Insurers consider young drivers below the age of 30 as high risk due to the notion that they're a bit more adventurous and may head into more accidents than older drivers. Similarly, senior drivers above the age of 65 are also seen as high risk since there is a chance they'll get into more accidents because of health risks and sluggishness that come with older age. In both cases, increased car insurance rates are to be expected.


This might not appear like a significant factor, but it is one of the crucial things that affect car insurance rates. Most insurance companies want the truth and no lies from their customers. That's why when making claims, it pays to be truthful at all times. For example, while signing up, you must answer all the questions thoroughly and accurately, including reports of accident declaration in the last three years, Main driver, usage, etc. Otherwise, it may influence the company's decision to insure or reimburse to pay the claim under the policy.

Marriage Status

Being in a marriage benefits you in achieving a lower rate. How so? Because a married person is likely to be much more stable and cautious when driving as they bear the responsibility of their family and are less reckless due to the consideration of their lives.

Vehicle Modifications

There is a common myth that modified cars can’t be insured. This is totally misleading because insurers do insure altered cars, but before you become ecstatic, you need to know that the modifications you'll make need to be LTA (Land Transport Authority)-compliant. You might need to pay extra for the added changes, but ultimately, it will depend on the policies your insurance company implements on the parts. So, make sure you're familiar with their guidelines before modifying your car.

No-Claims Discount (NCD)

With NCD policy, you can benefit from substantial rate changes (discount on your premium) if you drive around carefully and avoid claims for a longer period. For example, a driver who can keep a claim-free status for 3 years will be entitled to have 3 years of no claims discount applied to their insurance cost. Or, if a driver has purchased an NCD protector[A1] , they can keep their NCD rate from going down too low and have the discount they deserve. We, at DirectAsia, reward our customers with a maximum of 60[A2] % NCD in case of no claims. All in all, prevent yourself from getting into accidents and take advantage of the NCD policy.

Now that you’re aware of all these factors affecting premium in insurance, you must choose a perfect insurer to meet all your preferences. DirectAsia will guide you through everything you need to know about Car Insurance and provide you with the best policy. With more than 90% customer satisfaction and a listening ear (specialist), we will set you on the right track for choosing the best car insurance plan for you. We do our best to protect you and your vehicle at a reasonable and affordable price, so rest assured that your plan is in safe hands with DirectAsia. If you're eager to get started, get in touch with us and find out more or Get a free quote right now!

DirectAsia Car Insurance Hotline:

  • Emergency hotline: +65 6532 1818 (Singapore) or +65 6603 3699 (Overseas)
  • Email: customerservice@directasia.com