Whether you are a seasoned driver or just got your first car, finding the right car insurance is crucial. Unfortunately, car insurance can be notoriously expensive.

For instance, a single male or female driving a 2020 Toyota Corolla Altis 1.6 (0 per cent NCD, five years driving experience) could spend an average of $2,165 on car insurance annually. What’s more, the benefits offered by different car insurance plans vary significantly, along with their cost.

That’s why the last thing you want to do is to purchase a plan that doesn't fit your needs. So what should you consider when choosing the right car insurance? And is it worth considering cheap car insurance?

Cheap car insurance does not mean low coverage

According to a 2019 Worldwide Cost of Living Survey carried out by the Economist Intelligence Unit (EIU), Singapore remains the most expensive place in the world to buy a car.

Everything from the purchase price to registration fees and taxes adds up. As a result, many drivers may think twice before purchasing cheap car insurance coverage with the belief that cheap coverage equates to low coverage.

However, this is not always the case as lower-tier comprehensive policies cover the basics of what you actually need such as damage to third party's property and medical expense coverage.

On the other hand, while higher-tier policies come with a steep price tag and extra coverage, you may seldom use all the additional features that you pay for.

Let’s say that you’re a safe driver who works from home on most days and only drives to pick up your children from school and to the grocery store which is a few blocks away. Given your limited time behind the wheel, you are naturally less likely to need features such as eCall assistance.

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So, safe drivers who use their car for short, need-based trips can opt for a budget-friendly policy like Aviva Motor Lite which includes $500 of medical expense coverage for you and your passengers, unlimited towing, and new for old replacement cover for cars less than 12 months old.

This plan also offers policyholders child seat coverage which is a necessity for families on a budget. Additionally, you also receive unlimited car accessory coverage if they are originally fitted by the manufacturer.

Despite this, you are paying approximately 35 per cent below average compared to other comprehensive policies on the market!

Cheap car insurance lets you customise the policy

Cheap car insurance can come at the expense of a loss of benefits, but this is not always the case. Some insurers let you start with a basic plan that allows for customisation based on your budget, needs, and lifestyle. This can be useful during times when you are less likely to take to the road.

For example, as many of us continue to work from home and attend online classes or virtual events, we are spending less time behind the wheel.

As a result, we may benefit from a car insurance policy that allows for customisation when we need limited coverage.

Another convenience of choosing a cheap car insurance plan that allows for customisation is that you’ll be able to purchase certain benefits while still staying within your budget.

More specifically, with Aviva Motor Lite, you can buy add-on personal accident coverage for around $53.50, key replacement for $26.75, and loss of use for $80.25.

Upgrade to a higher tier as your budget changes over time

Despite popular belief, you don’t always have to pay a premium to get the coverage that you want. If you carefully compare comprehensive car insurance plans, you'll be able to find options that cost below market average and still offer a wide array of useful benefits.

For example, Aviva Motor Lite is 35 per cent below comprehensive plan average and 19 per cent below average for similar basic comprehensive plans for the average married male driver with 50 per cent NCD.

Additionally, the average cost for safe drivers across different car types is below average for all comprehensive plans, as shown in the table below.

Average Cost For Comprehensive Car Insurance Plans

When car insurance companies offer different tiers of coverage, choosing a basic and cheap option can be a good way to get your foot in the door if you are eyeing an insurer's more expensive options.

Provided that the price is competitive enough, you don't have to worry about switching insurers and can easily upgrade to a higher tier option with the same insurer once your budget makes room for it.

Consider a cheap car insurance plan if you have a limited budget in the short-term and plan to allocate room in your budget for a higher tier of coverage in the future.

Buying a car insurance policy can be a lengthy, complex, and an expensive undertaking. However, that doesn't mean you have to overspend to get the right amount of coverage.

Remember to compare car insurance quotes to find the one that fits your budget, caters to your needs, and also offers the flexibility to customise the plan or update to a higher tier in the future.

If you’re looking to buy a cheap car insurance plan in Singapore, consider Aviva Motor Lite which offers $500 medical coverage, unlimited towing, unlimited car accessory coverage, 12 months cover, and child seat coverage.

It doesn't hurt that consumers end up enjoying significant savings. With Aviva Motor Lite’s current promotion, you’ll receive up to 36 per cent off (new customer only). Use promo code WFH25 to enjoy 25 per cent off.

Also, MINDEF & MHA or POGIS policyholders enjoy an additional 15 per cent off on top of any ongoing promotion. Valid until July 15, 2021. Regardless of the car insurance plan that you choose, be sure to find the right policy for your budget, lifestyle, and needs.

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Disclaimer: Policy promotion terms and conditions apply. The policy is underwritten by Aviva Ltd. The information here is for general information only. For more details, click here.

This policy is protected under the Policy Owners’ Protection Scheme which is administered by the Singapore Deposit Insurance Corporation (SDIC). Coverage for your policy is automatic and no further action is required from you.

For more information on the types of benefits that are covered under the scheme as well as the limits of coverage, where applicable, please contact Aviva Ltd or visit the GIA or SDIC websites.

This article was first published in ValueChampion.