Does Owning a Manual or Automatic Car Affect Insurance Premium?

Posted on: Nov 15, 2022 | 3 mins | Written by: HDFC ERGO Team

Does Owning a Manual or Automatic Car Affect Insurance Premium?

Owning a car is no more a luxury; it is a necessity. The luxury factor kicks in when you go for a higher segment. The choice of a car and the segment you choose to be in depends on the features you want. One of the basic choices one needs to make is if they want an automatic or manual transmission. The choice of the gearbox now has become a crucial one though back in the day most everyone used a car with a manual transmission.

In urban areas especially those with a lot of traffic, an automatic car works well as they are more convenient. Irrespective of the car you take, insurance is necessary. But it is also important to understand how your transmission affects your insurance when buying a new policy or at the time of your car insurance renewal online.

There are different types of cars in both the options today and thus, understanding how either affect the insurance premium of your motor insurance is important. Let us know about manual versus automatic car insurance and its effect on the premium.

Difference Between Automatic and Manual Cars

1. Manual Cars:

As the name says, these cars require the driver to change the gears manually, both to move forward or reverse the car. The coordination is tough for people beginning to learn to drive and it gets inconvenient and tiring when driving in traffic or long distances. However, there are many who prefer to use manual cars versus an automatic ones.

2. Automatic Cars:

On the other hand, automatic cars do not need the driver to change gears. The car works on an ECU or an Electronic Control Unit which is based on the use of the accelerator pedal in the car. The car changes gears on its own depending on the speed the car is being driven at. For many, an automatic car is not as much fun to drive as a manual one but without the use of a clutch, it does reduce the hassle and stress.

This is the basic difference between the two car variants. Understanding the difference and ways to drive is important before you decide which one to buy. There can be other differences as well between the two cars like mileage, pricing, cost of maintenance and repairs etc. Taking all these factors into account is essential before you choose either.

How Does Transmission Affect Insurance?

Whether you are buying or doing your car insurance renewal online, or even trying to buy a new motor insurance policy, you should know that there are several factors which affect the pricing of car insurance. Some of these are the model of the car, year of manufacture, size of the engine, the market value of the car and also the location where it will be driven. Let us talk about the main ones here:

1. Model and variant:

When compared to a regular car, the insurance premium of a luxury car is higher. This is true when buying insurance or at the time of renewal. The capacity of the engine, a manufacturing company, type of car etc. all have an impact on the car premium.

2. Age of the car:

The age of the car is essential when calculating premium as with using the car depreciates due to wear and tear. Thus, the sum insured at the time of car insurance renewal online will change as a depreciated value is taken into account.

3. Location:

The insurance premiums are higher in a metro city when compared to tier 2 or 3 cities. Thus, the place where the car will be driven will affect the cost of insurance.

4. Coverage:

Third party car insurance is mandatory under the Motor Vehicles Act, 1988 but the own damage component is optional. You have the option to change coverage by adding add-on covers. When buying a policy, it is always good to compare car insurance so that you can see where the best coverage is available at the lowest premium.

5. Deductible:

When you compare car insurance you will realise each policy has a compulsory deductible and then there is a voluntary deductible. Both imply that a certain part of the claim amount will be paid by the insured. Thus, the deductible of a policy will determine the insurance premium.

When it comes to understanding the difference in insurance pricing based on the difference between the two transmissions, automatic car insurance pricing is more than that of manual. This is based on the factor that the two cars only have different transmissions and the rest of everything remains the same. The main reason behind this is that the cost of replacement or any repair of the gearbox of an automatic car is more expensive than that of a manual. This means, that at the time of an accident or if the car breaks down, the cost of repair that the insurance company will need to pay will be higher and thus, the insurance premium they charge will be higher.

This is the main reason why car insurance premium is more is for an automatic car. However, it is important to know that the difference is not substantial.

As the insurance premium for an automatic car is more, maintenance becomes crucial and thus, the following tips will help in taking care of the automatic car.

● Get the cooling system of the car serviced

● Ensure the car goes for regular services and maintenance checks

● Avoid putting pressure on breaks

● The engine of the car needs extra care

● Do not do drastic shifts in the gear

Conclusion

Buying a car comes with a cost and to add to it insurance also costs. As discussed, there are many factors which affect the premium of a car. When you are doing your car insurance renewal online , you will realise that different things will have an impact on your premium. Transmission of your car is one such factor and thus, before you choose a car, you should see it will affect the insurance cost.

Disclaimer: The above information is for illustrative purpose only. For more details, please refer to policy wordings and prospectus before concluding the sales.

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