Why Used Cars Sometimes Cost More to Insure

Older cars can look cheaper to buy but depending on make, model and parts availability, they can attract higher insurance costs than newer equivalents. Here’s why, and how to save when you renew.

1. Risk-based pricing

Comprehensive and Third Party, Fire & Theft insurance pricing in Malaysia is risk-based. This means insurers assess the likely cost of a claim (severity × probability) rather than simply the car’s market price. That means a low-value but hard-to-repair vehicle can attract premiums that look high relative to its age or sale price.

2. Parts scarcity and repair costs

For many imported or older models, spare parts are harder to find and more expensive.

When a vehicle needs replacement panels or electronic components that are discontinued or shipped from overseas, repair bills increase. This may cause insurers to pass that expected cost into premiums for that model/age cohort.

3. Minimum cost floors and third-party exposure

Some elements of motor cover (administration, third-party liability) don’t scale down with car value. A crash by an older small car can still cause large injury or third-party damage costs. This contributes to situations where a second-hand car’s insurance cost is not proportionally lower than a newer car’s.

4. Safety features and claim frequency

Modern cars often include safety features (ABS, airbags, advanced driver-assist sensors). Older cars lacking these features may be seen as higher risk, which can raise premiums for second-hand vehicles.

5. What you can do as a car buyer or owner

• Check parts availability and typical repair costs for the exact make/model before you buy (ask workshops or owners’ groups).
  

• Consider a policy with a wide panel of workshop network or agreed value cover if your insurer offers it for your car’s age.
  

• Shop across insurers and compare not only price but repair network, excess levels and claims handling speed. A car insurance comparison platform like PolicyStreet can make quick quote comparisons easier.

Save More with PolicyStreet

Choose the right time to make your car insurance and/or road tax renewals and save big with the ongoing campaigns at PolicyStreet:

• 10+10 Promotion: Renew from the 1st to 24th of the month, at 10:00AM - 11:00AM or 10:00PM - 11:00PM to enjoy up to 10% OFF your base premium (after NCD), along with cash vouchers based on their eligible tier, plus an additional RM10 discount.

• Save Kaw Kaw Promotion: Save on your car insurance renewal with eligible promo codes and cash vouchers.

For more details, explore our terms and conditions.

PolicyStreet also runs other promotions from time to time — check the Campaigns & Promotions page for current offers.

Bottom line

A second-hand car can sometimes cost more to insure because insurers price on expected claim costs, not just purchase price. Do targeted checks on parts and repairs before buying, compare insurance quotes through PolicyStreet, and consider timing renewals to enjoy limited-time promotions.