Because car insurance is mandatory in Singapore, a large numbers of car owners consider it a necessary expense and do not give much thought to how much they are paying for it. This is especially the case because you cannot do much to reduce the annual car insurance premium that charged by insurance companies. Insurers use an extensive set of data about the claims and accidents to calculate how much they will have to pay for claims and what insurance premium they can charge. For example, people over the age of 30 have fewer accidents than younger individuals. Similarly, they are aware that women tend to be safer drivers than men. Therefore, men below the age of 30 fall into the highest risk category and are required to pay greater premiums.
Despite these classifications, there are still a number of ways to reduce your car insurance costs. Here are some of the ways in which you can save thousand dollars or more every year on your car insurance.
1. Shop around for the best rates
Most car buyers in Singapore choose to purchase a car insurance policy through their dealer. Since not doing so comes with a penalty fee, it may make some economic sense to do so for the first year. However, these policies sold by car dealers typically cost S$3,000 or more, compared to the average cost of around S$2,000 for most car insurance products in Singapore. Given this, you should always try to shop around for a cheaper car insurance policy online when it’s time to renew your car insurance. According to ValuePenguin’s calculations, you could save S$1,000 or more by switching to a cheaper option.
2. A private settlement could be preferable for a minor accident
If you get into an accident that does not result in much damage to your car, it may be better to opt for a “private settlement.” Let’s assume you just got in a collision with another car and both vehicles suffer damage that would cost just a few hundred dollars to repair. If you decide to mutually settle the matter, it could save both of you the trouble of approaching your insurance companies for compensation.
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