What are some of the major factors they consider when giving an insurance quote?

Car insurance is compulsory for all commercial or private cars in Singapore. Aiming for lower car insurance quotes? Here are some factors that affect the cost of car insurance.

Car insurance is compulsory in Singapore under the Motor Vehicles (Third-Party Risks and Compensation) Act. Without a proper third-party-only plan or a comprehensive plan or even a third-party fire and theft plan, you'll find yourself in serious trouble with the law.

While that may be out of your control, finding cheap car insurance is very much within your power if you put in the time and effort to look and understand how insurers come up with quotes.

  What are the factors that affect car insurance quotes?

Each bit of information for each factor is weighted differently with a risk factor. The higher the risk, the higher your car insurance quotation.

  Car make and model

Car insurance premiums for European-branded cars tend to be higher compared to Asian cars

Different premiums are given based on your car's make and model.

Compared to European-branded cars, which have higher import taxes and pricier parts, Japanese or Korean cars typically have cheaper car insurance.

Insurers do also offer cheap car insurance for vehicles with smaller engines.

  Age of car

The newer your car, the more you pay for insurance

For new cars, premiums tend to be higher compared to an older car because the repair cost is higher.

The cost of car insurance decreases with the age of your car. However, as your car ages past a certain point (usually 10 years or more), your premium will stop decreasing because there is a minimum that the cost of repairs can go.

  Age of insured

If you are a young driver or an elderly driver, expect to pay higher premiums

Young drivers are typically deemed to be more reckless and more likely to get into an accident.

On the other hand, elderly drivers are judged to be more accident-prone too as they have reduced reflexes and poorer eyesight.

Therefore, people below the age of 30 and over the age of 65 can expect to pay more expensive premiums.

  Occupation

Insurers will use your occupation to gauge how often you'll use your car.

If you have an outdoor job, it means you will use your car more often, indicating a higher risk of accident, and this can translate to higher premiums.

  Marital status

When you have a family to look after, your premiums will dip

When you get married, insurers may lower your car insurance premiums because you have a family to look after now.

The risk of an accident drops, and so does your premium.

Don't give false information or you might have to pay for all damages in the event of an accident.

  Driving experience (how many years of driving)

Get your license as fast as you can even if you have no intention of driving. The longer you hold a license, the cheaper the insurance premiums

If you have less than four years of driving experience, you pay higher car insurance premiums. Within the first four years, the more driving experience you have, the lower your premiums become; but the reduction tapers off as you go along. For instance, a person with 10 years driving experience does not pay significantly less than one with only five years of experience.

Insurers base your driving experience on when you passed your driving test. The longer you've had your license equates to more experience. So get your licence as soon as you can even if you do not intend to drive immediately after passing!

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