All Singaporean drivers must have car insurance as a safeguard not only for themselves but other motorists as well. The amount of coverage varies, depending on what type of car insurance you opt for. Different policies may offer different things like medical bill coverage, legal fees, and repair costs.
A car warranty provides coverage for mechanical failures and flaws, which are specific forms of issues that your vehicle might face while in use. Although it is not mandatory to have a warranty for your car, it does lift a huge weight off your shoulders in terms of repair and replacement costs.
If you're still unclear about the differences between both forms of protection, read on!
Car insurance
Car insurance is mandatory for all motorists in Singapore. It is a contract between the car owner and the insurance company, in which a predetermined amount is paid annually in exchange for monetary coverage for accidents.
1. Types of car insurance available
There are three different kinds of car insurance plans available in Singapore – Third-Party Only (TPO), Third-Party Fire and Theft (TPFT) and Comprehensive.
For owners looking for a cheap insurance plan, TPO is the most basic plan as it only provides coverage for the damage costs and medical expenses incurred by an accident or collision in which the owner has inflicted damage onto another person's vehicle.
TPFT is a mid-tier plan that provides the same benefits as TPO with additional coverage of accidental fires and theft losses.
The top-tiered comprehensive insurance provides coverage for almost everything from the driver and other motorists' accidental damage and medical expenses. It also covers damages incurred by natural disasters such as floods/hail.
If your vehicle is still under financing, it is mandatory to purchase comprehensive insurance to protect the finance company if the car gets written off as a total loss after an incident.
2. Coverage available
Unlike car warranties, the coverage provided by car insurance does not extend to mechanical faults and failures. If you must send your vehicle for servicing due to a sudden breakdown (without an accident), you cannot claim any monetary coverage for such costs.
Claims involving aftermarket parts are claimable under car insurance plans, and these include damage costs of additional body kits and car accessories. However, it is important to first go through the details with your insurance company before making such claims.
3. Additional features
Lastly, instead of being transferable, car insurance plans stick with the owner instead of the vehicle. If you were to switch to a new car, you can enjoy the same benefits and coverage for your new vehicle as you did for your previous one.
However, if you intend to sell your car, your insurance benefits will not be transferable to the next owner.
Car Warranty
The primary purpose of a car warranty is to provide a financial buffer for sudden mechanical defects and failures. These include flaws that occur from vehicle deterioration or poor vehicle maintenance.
1. Types of car warranties available
There are two types of car warranties available to car owners in Singapore: New car warranty and Used car warranty.
New car warranties typically come from the car's manufacturer and provide coverage for a new vehicle for up to 3,5 or 10 years as standard after purchase.
Used car warranties usually come from third party workshops and provide coverage for used cars. This type of warranty is only available for owners who just purchased a used vehicle without a warranty and is dependent on the car's pre-inspection condition.
With used car warranties, workshops usually have a set of requirements that the vehicle must meet before being deemed eligible for coverage. There are also certain limits for mileage coverage and the amount of monetary coverage provided as well.
2. Coverage provided
One thing to note is that car warranties do not cover the costs of replaceable parts, oil changes and routine maintenance as these components naturally deteriorate over time with frequent usage. These include windshield wipers, brake pads and tires.
Mechanical costs incurred by human negligence are unfortunately not covered by car warranties either. These include general vehicle damages that the driver ignored.
Claims involving aftermarket parts are usually voided by warranty unless the parts were declared before the warranty purchase. However, this varies amongst different issuers and are only applicable to certain parts.
3. Additional features
Additionally, a car warranty is transferable, which means that new owners of a used car can enjoy the same warranty coverage and advantages as the previous owner. If you decide to sell your car, having a car warranty will boost its worth in the market. However, do note that warranties cannot be cancelled or refunded.
An essential point to note is that vehicles (new and used) bought from dealers come protected under the Lemon Law, allowing consumers to make claims for vehicle defects within six months of purchase in Singapore.
If your vehicle has a warranty period of fewer than six months, the Lemon Law overwrites it. This law automatically protects owners from big or small defects that were not highlighted at the time of purchase.
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