A new car loan would carry with it an interest rate, which is only one of the three basic considerations when taking out a car loan.  Loan principal is the original amount that you borrowed.  Loan period is the time you have to pay back the loan principal plus the incurred interests.  These three factors are important because these specifically determine the total value of the loan.  The higher the principal, the longer the loan period, the higher the interest rate, the more expensive it would be to repay the car loan you took out.

More about the Interest Rate
A car loan interest rate is normally seen in percentage terms.  As mentioned before, this is the charges outside the principal amount of the loan.  There are actually two types of interest schemes being use now: flat and the monthly rest.

Take note that one bank will charge a different interest rate from another.  They will have a varying floating rate, while having a uniform flat rate.  As the name indicates, flat interest is fixed throughout the loan period and as such needs only the simplest of interest calculations.   Most car loans in Singapore have a flat interest rate.

The monthly rest scheme makes use of floating interest rates that are dependent on a benchmark rate.  The principal amount gets reduced every month as a portion of it is repaid.

If you want to pay less for a car loan, you can be very flexible with the loan period and the car loan interest rate.  Scout for a bank that can give you the loan with a shorter loan period, or perhaps a lower the car loan interest rate.

Calculating your car loan is a major activity in your decision to take out a car loan to cover for your new purchase.  You should know just how much your loan is costing you every month in the future.  In order to arrive to an accurate figure, you must also know what the loan period, loan principal and the car loan interest rate is.

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The good news is that, there are some companies that offer a car insurance comparison service that can get you the cheapest insurance premium quotes as well as the best features and add-ons for your car.  You can avail of these services whether you are looking for a personal vehicle, a commercial car, or even motorcycles. Further, these services offer fast and reliable quotes in less than 2 working days.

If you decide to do it yourself, then here are the things you should know about.

How come quotes from different insurance companies vary?

Insurance companies determine your premiums from standard criteria, but may have different benefits or risk tolerance.  You should also check on the insurer’s customer service, particularly how long it usually takes them to process a claim.

From this standpoint, you are well advised not to take the cheapest insurance coverage there is, because you might not be adequately protected or might run into problems in the future.

Take note that there are also factors being considered when it comes to pricing.  These factors relate directly to risk, which is determined by historical claims as well as statistical claims data.  The truth is, you are more likely to get cheaper insurance if you are female, or if you are older and have more driving experience.  On the other side of the coin, young male drivers have been known to get into more accidents while on the road and are thus viewed as being riskier than any other group and are charged higher premiums.

Keep your driving record clean.

If you have no driving tickets or have not filed an insurance claim, then you are up for bigger discounts from your potential insurer.

Stay away from sports cars. If you are in the stage where you are just buying a car, then keep this in mind, the make and model as well as the age of your car matters to insurance companies.  This means that sports cars with their fast acceleration and high speed are deemed more dangerous and riskier than the family sedan, and thus may be charge more premium by the insurer.

Getting the cheapest motor insurance can be easy once you know what to look for or avoid.

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DRIVERS who make false statements on a vehicle accident to insurance companies, take note.

The Motor Insurance Taskforce, set up last September to address the issue of rising motor- insurance premiums, said yesterday that it is proposing to criminalise false accident reporting to insurers.

The taskforce’s members include the Consumers Association of Singapore (Case), the Automobile Association of Singapore, the Land Transport Authority and the General Insurance Association of Singapore.

The taskforce added that it has put up the recommendation as there could be cases of dishonest accident reporting when drivers try to shift the responsibility for an accident onto another party.

By doing so, they would not have to make a claim with their motor-insurance company.

Drivers who do not make claims for a year enjoy a discount on their motor-insurance premiums for the following year.

However, a false report could result in the aggrieved party hiring a lawyer to defend him, and these legal costs would be included in one of the accident claims.

Read full news report HERE.

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…from 2008′s record loss of $214 million. This is due to better underwriting discipline and an initiative to improve claims reporting, according to General Insurance Association (GIA) yesterday.

Although the motor insurance’s losses has shrank, the sector is still in the red and personal injuries claims on the rise. Therefore the motor insurance premiums are unlikely to fall, said GIA president Derek Teo.

The Motor Claims Framework, launched in 2008 to guide motorists in reporting claims promptly, has helped to cut the number of disputes over claims, to the benefit of both insurers and motorists. However, motor insurance continues to be the biggest loss-making account for the general insurance industry…

Read full news report HERE.

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In this article, you will learn what an excess is and how it works, why insurers want to implement it and how can you use it to your advantage.

What is An Excess?
An excess is the first portion of any claim that the insured person must pay for before claiming the rest from the insurer. If the cost of the total claim does not exceed the excess, the insurer does not have to pay at all. Putting it simply, the higher the risk the insurer carries, the higher the excess will be in the insurance policy.

How Does an Excess Work?
For example in Figure 1, the excess of your car insurance is $500 and the total amount of your claim is $1,500. You as the insured person have to pay the first $500 and the other $1,000 is paid by your insurer.

However, in Figure 2, the excess of your car insurance is $500 and the total amount of your claims is only $400, the insurer will pay nothing.

Why do insurers want to implement it? There are a numerous reasons for insurers to impose an excess for a car insurance policy.

• To reduce the number of small claims from car owners and to encourage greater responsibility in car owners for their part of the loss.
• To reduce accountability of the insurer in larger claims through the excess amount. Also, with lower liability of the insurer, the insurance premium is also lowered.
• To reduce the costs incurred to service claims as there are fixed costs incurred to service each claim and it doesn’t make economic sense for the insurers to attend to each and every small claim.
• Higher excess may be offered to car owners with bad claims experience in order to make car insurance viable and in force.

How can you use the Excess to your advantage when buying a car insurance policy?

• Opt for higher excess as this reduces your car insurance premiums.
• The higher the excess, the lower the liability of the insurer, and thus the lower the car insurance premium costs.
• Different insurers offer different excess amounts depending on the type of the driver insured (age and experience). Look for one that benefits your profile most.

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A. Maintain a clean driving record.

Having no driving ticket or having no traffic violations on your record can help you reduce your car insurance premiums by as much as 50%.  Apart from proving yourself a careful and responsible driver, and therefore a low risk one, insurance companies would not hesitate to cover you at a discount.  You can also get as much as 50% in terms of a no claim discount or no claim bonus when you renew your policy.

Some insurance companies also give your added incentives for having a good record, helping you save more.

Meanwhile, a clean traffic record earns you a certificate of merit which equals to a 5% discount.

B. Opt for a higher excess.

Each insurance company will impose a certain amount as your policy’s excess amount.  The excess is the amount you would have to shoulder in any claim against your policy before the insurance company would be liable for anything.  This means that the higher the excess amount, the lower your premiums would be.  If your insurer allows you to set your own excess amount, then opt for a higher excess to reduce your premiums.

C. Choose only benefits that you need.

Study your policy before buying it and make sure that all the add-ons and benefits in there are of use to you.  Removing add-ons and benefits that you do not need means that you do not pay for it, thereby reducing your premiums.

D. Do not name inexperienced or young drivers unless it is absolutely necessary.

While definitions differ from one insurance company to another, a young driver is usually one who is less than 26 years old, while an inexperienced driver will have less than three years driving experience.  Naming somebody who falls under these categories can cause your car insurance premiums to shoot through the roof!  Check to see how often an offspring, or a brother or a friend drives your car and gauge if the frequency they drive your car would justify the added premiums.

E. Choose to have “age restricted cover”.

You can choose to limit the age of people who can drive your car.  Say you opted for an age restricted cover that only allows people above 30 years old to drive your car, you can get as much as 15% discount on your car insurance premiums because of that.  The downside is if somebody younger than 30 years old drives your car and gets into an accident, your insurer might not be liable to pay for the damages.

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The Motor Claims Framework which was introduced by the General Insurance Association of Singapore took effect on June 1, 2008, requiring traffic accident reporting and laying out the procedures to follow in case of an accident.

Under this law, you are required to report all accidents to your insurance within 24 hours or within the next working day.  This applies to even the most minor of damages, even those that are not readily visible.

This rule applies regardless of whether you want to file a claim from your insurer or from people who caused the accident and even when you have already reached a settlement with the other party; you must report the accident to your insurers.  And because of this, all insurance companies now have a hotline to operate around the clock.

Under the Motor Claims Framework, failure to report an accident within the specified time allotted will result in:

- Having your claims declined or prejudiced later on by insurers, or
- The possible loss of your policy’s no claim discount when you renew your policy.

Do not be at a disadvantage by being lazy or not knowing the regulations.  Especially if you are filing a claim with your insurer, you will be penalized for not reporting any accident at once.

There are certain documents and information that you should bring with you for filing.  To file a report, you must be ready with:

- Your NRIC or other means of identification,
- Driving licence,
- Original Vehicle Insurance Certificate,
- Information on the other parties involved in the accident, such as their name, NRIC, telephone or mobile number, address and the name of their insurance companies,
- Information on the vehicles, including the registration numbers, the make, the model and the colour of the vehicles involved, and
- Photographs of the accident, even digital ones,
- Particulars of the accident like the date, place and time of the accident, the extent of damage, the positions of the vehicles, road and weather conditions,
- Information on witnesses, if any.

Following the new traffic accident reporting procedures can help you save money and will help you enforce the insurance benefits you paid for.  Make sure to remember these guidelines just in case they become handy in the future.

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Not to worry as this article gives you an idea on how insurance companies in Singapore price their car insurance premiums.

Car insurance premium in Singapore is based on a point system that follows 2 categories of factors. Firstly, the Characteristics of the Driver insured, and secondly, the Characteristics of the Vehicle.

Now here are the contributing factors that affect your car insurance premium:

Category #1: Characteristics of Driver (Insured)

a) Age of Driver:

• The older you are, the less your premium costs.
• Major factor that affects the price of your Car Insurance Premium.
  • 18 to 21 yrs old — Most Expensive
  • 22 to 25 yrs old — Expensive
  • 26 to 30 yrs old — Moderate
  • 31 to 65 yrs old — Least Expensive

b) Gender & Marital Status:

• Cheaper for Females than Males
• Cheaper for  a Married person as compared to a single

c) Driving Experience:

• The more Experienced you are, the less your premium costs.
  (Calculated from the time you got your driving license)
  • 0 to 1 yrs experience — Most Expensive
  • 1 to 2 yrs experience — Expensive
  • 2 to 4 yrs experience — Moderate
  • > 4 yrs experience — Least Expensive

d) Job Nature (Indoor/Outdoor):

• Cost more if job nature is Outdoor, and less if Indoor

e) No Claims Discount (NCD):

• If you have not made any claims with your insurance company for a year, you will receive a 10% NCD to reduce your Car Insurance Premium the following year.
• You will receive an additional 10% NCD every year and your NCD can be accumulated up to a maximum of 50%.
• If a claim is made during a policy year while you are still enjoying NCD, the NCD will be reduced the next time you renew your motor insurance.

f) Certificate of Merit Discount:

• If you have NO traffic offense or accumulated demerit point(s) in the past 3 years, a 5% discount is awarded to you on top of the deduction of your NCD.

Category #2: Characteristics of Vehicle

g) Body Type:

• Types of cars – Sedan, MPV, SUV, Sports Car, Station Wagon, etc.
• Costs more to insure unusual types of vehicle.

h) Engine Capacity (cc):

• The higher the engine capacity, the more your premium costs.

i) Engine type:

• Types of Engines -  Normal or Turbo engine
• Costs more to insure a car with turbo engine

j) Year of Manufacture:

• Year in which your car was made/registered
• The older the car, the less you pay.
• Some insurers refuse to offer comprehensive coverage for cars beyond 7 years old

k) Vehicle Scheme (Normal/Off-peak)

• Some insurers offer a  15% discount  for Off-peak cars

With the large number of contributing factors to price a car insurance premium, inconsistencies are never far away. Nonetheless this presents us a chance to get the cheapest prices for your car insurance.

An easy yet effective way to save on your Singapore car insurance is to compare quotes from at least 8 to 10 different insurers. This will be sufficient to surface the insurance company that is in favour of your vehicle or driver profile.

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Motor Premiums
Car insurance premiums, or the amount you shell out to insure your car, are determined by a number of factors.  These factors include the car’s make and model, how old the car is, the driver’s gender, age, occupation, and the history of claims of the one applying for the insurance.  Knowing how your motor premiums are determined can help you save money and ensure that you are not paying too much for your coverage.

Excess amount
The excess amount, which is also known as the deductible, is the amount that the insured would have to shoulder when you make a claim against your insurance policy.  For example, if you opt for a $500 deductible and you have a claim for $3,000, you would have to pay for the $500 and the insurance company will take care of the remaining $2,500.

The excess amount may be determined by a number of factors depending on the insurance company.  Usually, inexperienced drivers who have just learned how to drive or younger drivers may be expected to pay for a higher excess.  An insurance company, for instance, that normally requires a $500 excess amount will want to charge $2,000 for inexperienced drivers under 26.  Either that or charge an extra $1,000 for drivers who have been driving for less than two years.

Other insurance companies may let you dictate the excess amount.  If you opt for a higher excess, you will pay for a lower premium.

No Claim Discount
The no claim discount is also known as no claim entitlement or no claim bonus.  This is an incentive wherein people who have not made any claims against their car insurance can get a discount on their premiums.

If you have not been in an accident or have not made a claim on your existing policy, you can significantly reduce you car insurance premiums.  For instance, if your insurance company gives you a 20% no claims discount, you can reduce your premiums payment by the same percentage when you renew your policy.  What is more, the longer you go without any claims, the higher your discount will be - as high as up to 50%.  

No Claim Discount (NCD) Protector
The no claim discount protector allows you to retain your NCD even if you make a claim within the year.

Windscreen Damage
Most insurance companies give you windscreen cover for free, but may charge $100 for each claim made.

Personal Accident Cover
Personal accident cover may be applied for you or your passengers as a component of your insurance package.

Repair Options
Some insurance companies limit the shops where you could take your car repaired.  While most allow you to have your car repaired at your preferred shops, you could save money by allowing them to have repair restrictions put into your plan.

Courtesy Car (Replacement car or Loss of Use)
There are insurance companies that allow you to have a courtesy car while your car in under repair.  This is especially useful when you use your car daily or for business, and usually have some provisions to help you save money just in case you have to do without your car.

Towing and Roadside Assistance
Check if your insurance company includes roadside assistance or towing services with your car insurance policy.

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