How much would it cost to insure a Grand Prix car?

Ever wondered about the risks involved in insuring a premium race car?

Aviva explains the factors that go into car insurance by comparing insurance for race cars with a common vehicle.

Mr Dare De Vil

Professional race car driver

Mr John Tan

Engineer

Age: 25

Driving experience: 7 years

Years since last accident: <1 year

(January 2015 at Ang Mo Kio Grand Prix)

Drives a McLaren MP4-27

Age: 38

Driving experience: 15 years

Years since last accident: 15 years

NCD: 50%

Drives a 1-year old Toyota Vios 1.5

Premium: $30,000/ year Premium: $678/ year

As in every race, experience matters

Different age groups are associated with different levels of accident risk. The more driving experience you have, the lower your premiums will be too.

Mr Dare De Vil, 25 years old, is considered young in car insurance terms which will cause his premiums to be higher than Mr Tan's. Statistically, Mr Tan, is older and has more years of driving experience, presents a lower risk to insurers than Mr De Vil. As such, his premiums will be lower.

Vigilance pays

The more accident-prone a driver, the higher the premiums, due to the statistical increased risk of getting into an accident again. On the other hand, safe drivers enjoy No Claims Discounts (NCD) that can translate into significant cost savings on insurance premiums.

Mr Dare De Vil's last crash was in January 2015 at the Ang Mo Kio Grand Prix. However, as it was proven that the accident was not his fault, with Aviva's car insurance, his NCD will not be reduced. Mr Tan is a careful driver and is currently enjoying 50% NCD. After staying with Aviva for 3 years, as part of his safe driver discount, even if he gets into an accident, his 50% NCD will automatically be protected.

Expensive parts make for higher premiums

Vehicles with expensive parts mean higher insurance premiums as there is a risk of a higher cost of repair in the event of an accident.

Customised orders have to be placed for replacement parts, and repairs have to be made at specialist workshops for Mr De Vil's race car, causing his premiums to be higher. Spare parts for Mr Tan's Vios are often in stock at most work. In this aspect, premiums will be cheaper for Mr Tan as the cost of repair is lower.

The number of hands behind the wheel

With fewer hands behind the wheel, car insurance premiums can be kept to a minimum. With Aviva's customisation features, you can insure specific individuals such as "named driver" or "named driver & spouse", so you can only pay for what you need.

Each team has three named drivers who are able to take the wheel in case of any unfortunate incidents. Because of the extra drivers, Mr. De Vil's team has to pay an additional 10% compared to a policy that solely insures one driver. There is only one named driver for Mr. Tan – himself – so in this aspect his premium is kept at a minimum.

Occupation

Some insurers will also ask if the vehicle is used for day-to-day transportation such as getting to and from work, or if it's a necessity in the course of your work, for example, an outdoor sales job.

For Mr De Vil, his car is a necessity for his job. Insurers typically see this as a higher risk as he's on the road more often thus exposed to a higher likelihood of an accident. Mr Tan's job is desk-bound and he uses his car only to get to and from work. In this aspect, his premiums will be lower than Mr De Vil's.

Figures and information used in this article are for illustrative purposes only. Please visit www.aviva.com.sg to obtain an accurate quote for your car insurance.

Do you know how much your car insurance premiums cost in comparison? Click here to find out!

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About the author: Aviva

We're one of the leading providers of retirement, investment, insurance and health solutions in Singapore. We're a provider of Medisave-approved Integrated Shield plans, an appointed insurer for the national ElderShield scheme, and have protected SAF servicemen since 1983. In the general insurance space, we were the pioneer insurer in Singapore to offer car insurance online, changing the market landscape. To find out more about the solutions we offer, please visit www.aviva.com.sg

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