Car Insurance

5 Tips for Lowering Your Auto Insurance Premium


Jeff Cuellar



There’s nothing like the feeling of driving your very own vehicle to work every day. It marks that special transition from the intimate closeness of morning MRT travel (you know what I’m talking about) to controlling your commute destiny.

But car ownership comes with other burdens, such as paying enough taxes and fees (COE, ERP, etc.) to make you hate acronyms for life. While you have zero control over lowering these government-imposed expenses, you can lower one very important and necessary expense – your auto insurance premium.

The following five tips will help you keep more money in your pocket:


After years of research, I’ve come to the conclusion that this is the only way to avoid paying road tax.


1. Drive Safe If You Want to Save

The BIGGEST way to save money on your auto insurance premium is to drive safely. A standard practice among auto insurance companies is to offer a No-Claim Discount (NCD) of 10% for every year you drive without an own damage (OD) claim (claims against another driver at fault for an accident will not affect your NCD discount). The NCD discount maxes out at 50% after five consecutive claim-free years, which can save you thousands!

After attaining the maximum NCD of 50%, some insurance companies provide a No-Claim Discount Protector that safeguards your discount in the event of an OD claim. So ask your insurance provider about it and snap it up if you can. Because who knows?

Maybe one day you are driving along, daydreaming to Britney Spears music, when you suddenly bump into the car in front of you. With the NCD protector, your 50% discount is still protected – unfortunately, there’s no insurance coverage for loss of pride.


2. Maintain Zero Points on Your License


Nothing like the feeling of racing a lorry, family car, and a few taxis down the PIE. Having a high performance car in Singapore is so useful!


Driving like you’re Mad Max outrunning bandits on the PIE and getting caught by the police is not a good way to earn an additional auto insurance premium discount. In fact, accumulating driving demerit points is a good way to get your license suspended – meaning you’ll once again join the morning MRT crowd.

Thankfully, you can avoid this scenario and save money by following local traffic laws. If you go 3 years without committing a traffic offense, you can earn a Certificate of Merit (COM). This will save you an additional 5% on your auto insurance premium in addition to any NCD savings you currently enjoy. So repress your need for speed and use your savings to buy Grand Theft Auto V instead.


3. Higher Excess Means Lower Premiums


I leave my car alone for an hour and this happens. Good thing I have a low excess on my policy…


Excess is what you must pay an insurer before you can receive the full amount of your claim. If the cost of a claim exceeds the excess, the insurer pays. If the cost of a claim is below the excess, you pay. For example, if your windshield gets cracked and it costs $450 to replace it, but your excess is $750, the insurer will not pay.

If all of your car’s windows are damaged (fingerprints dusting of a nearby tyre iron is free) and it costs $3,000 to replace them, you will pay the excess of $750 and your insurer will cover the remaining $2250. The higher your excess is, the lower your car insurance premium will be. This is because you are taking on a greater share of the financial risk in the event of an accident.

If you are a good driver with a safe record, choosing a higher excess is a money-saving move. But if you’re a bit accident prone, choosing a lower excess is a smarter decision.


4. Slash All Unnecessary Coverage


Eh… I don’t need to pay for towing on my policy. I can take it to the dealer myself!


What do we do with things that we don’t need? We get rid of them! This same idea should apply to coverage items within your insurance policy that don’t apply to you. So go over your policy line-by-line and remove items that you either don’t need or can live without.

If you don’t need a rental car while your car is being repaired, remove that from your policy. If you don’t need personal accident coverage, remove that too. By trimming down your coverage, you can save even more on your monthly auto insurance premium.


5. Add Age and Experience to Your Policy


If your policy premium goes up, just take it out of my diaper fund!


Adding a driver to your policy is a good way to save on your insurance premium. So what’s the secret? Reverse age discrimination. By adding an experienced driver to your policy, you’ll reduce the auto insurance premiums of both young and older, experienced drivers.

This is because according to insurers, the risk profiles of experienced drivers are much lower than those of new drivers. On the other hand, adding a young driver under the age of 26 with less than 3 years of road experience will raise your premium faster than it takes the US Navy to occupy Orchard Towers on shore leave.

Now that you know how to save some major money on your car insurance premium, use that knowledge to get the best auto insurance rates at MoneySmart’s Car Insurance section.


Image Credits:
Haley RedshawphoenixtowingradmeganJpl3k – Jipple28mindfrieze

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Jeff Cuellar

I'm known by many titles: copywriter, published author, literary connoisseur, ex- U.S. Army intelligence analyst, and Champion of Capua.