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. Below I explain why, and how to save when you renew.
1) Risk-based pricing: insurers price expected cost, not just market value
Motor insurance pricing in Malaysia is risk-based: 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. Evidence and regulatory guidance on risk-based underwriting and claims handling are set out by the country’s central bank and industry rules.
2) Parts scarcity and repair costs push claims higher
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 jump — and insurers pass that expected cost into premiums for that model/age cohort. Recent industry analysis and market write-ups quantify spare-parts volatility as a top driver of rising premiums for older cars.
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; insurers therefore apply minimum pricing considerations to avoid selling at a loss. 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 driver-assist and crash-avoidance systems (ABS, airbags, advanced sensors). Older cars lacking these features typically show higher claim frequency/severity per kilometre driven — another input that can raise premiums for second-hand vehicles.
5) What you can do as a buyer/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 better repair-network guarantees or agreed value cover if valuations matter.
Shop across insurers and compare not only price but repair network, excess levels and claims handling speed. A digital broker/platform can make quick comparisons easier.
Limited-time saving + How to capture a renewal discount from PolicyStreet
Flash window offer (10% + RM10): renew during two daily sale windows to get 10% off the base premium (after your NCD) plus an additional RM10 at checkout. The promotion runs from January 2026 through April 2026 and is available only during the two one-hour slots each day: 10:00–11:00 AM and 10:00–11:00 PM (campaign days are 1st–24th each month).
Note: the provider pairs this time-window discount with other occasional offers — check the platform’s site for the exact activation calendar and more promos like Free Road Tax.
Bottom line
A second-hand car can sometimes cost more to insure because insurers price on expected claim cost (parts, repairs, third-party exposure, safety-feature gap), not just purchase price. Do targeted checks on parts and repairs before buying, compare policies (including repair-network terms), and consider timing renewals to capture short window promotions described above.
