Owning a car in Singapore is not the cheapest way to get around. That is why car ownership here is considered to be a luxury, rather than a necessity like in other countries. There are many aspects to consider when you’re deciding whether to own a car.
Maintain a no-claims record
It pays to maintain a no-claims record. No-claim Discount (NCD) is a discount given by insurers when you have not made any claims in a year. Considering that you have been a safe driver, you will be entitled to a discount on your insurance premium. With an NCD, you can save up to 50% on your car insurance policy as you renew it over the years.
Apart from your NCD, you will also qualify for a Certificate of Merit (COM) if you have not violated any traffic rules for over 3 years. This will also enable to enjoy discounts off the insurance premium. Adopt safe driving habits and qualify for both the NCD and COM to bring down your premium amount. When you apply for a car insurance, your insurer will check your eligibility for a COM so do ensure that you maintain a clean record. This certificate might offer you a further 5% discount on top of your NCD.
Check your excess on your auto insurance premiums
Your auto insurance policy excess is simply the amount of money you’re required to pay before you can receive the full amount of your claim. It also has direct impact on your auto insurance premiums – the higher your excess amount, the cheaper your premiums. Having a high excess means taking on more financial risk in the event of an accident. Here’s an example –
Let’s say you have an excess of $500 on your auto insurance policy.
Damages from an accident come up to $3,500.
So, this translates to mean that you’ll have to pay $500 to your insurer before they would pay for the remaining $3,000 on the $3,500 accident claim.
If you have an excess of $2,000 on your auto insurance policy, your insurer will pay $1,500 for your $3,500 accident claim while you fork out $2,000. So, beware!
However, this is not to say that you should not adjust your excess amount. Just ensure that you’re being prudent about it. After all, if you’re a driver with a fantastic safety record, it might be worth going for higher excess.