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3 things to look out for when renting a car in Singapore

As the festive season of Chinese New Year (CNY) is approaching, some of you may be pondering whether to rent a car for the CNY week given the high cost of owning a car in Singapore. Car rental companies are aggressively promoting their CNY rental packages and you may be busy scouring car rental rates on comparison websites. Other than the $ sign figure beside the car model that you are interested to rent, here is the most important thing to look for –

 

Yes, the insurance coverage that the car has. Nobody likes the idea of getting into accidents and most would assume “Choy! I wouldn’t be that unlucky one!”

But when shit happens, it happens. Other than destroying your festive mood, its going to burn a really big hole in your pocket and you would have wished you have endured the waiting time for a cab.

How much daily car rental depends heavily on the insurance coverage provided.

Let’s say an industry average of renting a Toyota Vios 1.5L is $60 a day before discounts that may be given.

And let’s assume the cost of the

Insurance type A (Third Party with Fire and Theft)  – $15 a day

Insurance type B (Comprehensive) – $30 a day

 

 

Company A uses type A insurance, and the cost of renting that Vios is $75, and Company B uses type B insurance which equates to $90 a day. On car rental comparison sites, company A would rank above company B. You might say “wow, this is the cheapest @$75 a day. I should get this”. Think again.

Now, let’s look at Insurance type A (Third Party with Fire and Theft). As the name implies, it only covers the 3rd party and fire/theft to the insured vehicle. In a scenario where Robert unfortunately kissed the backside of the car in front, Robert is assumed to be at 100% fault (unless Robert can prove that you are stationary and the car in front reversed in you, i have seen cases where there is video proof provided, the fault is assumed to be 50% each). Sadly the car kissing happened, Robert is assumed to be at 100% fault.

The cost of repairing Robert’s rental car works out to be $1,000 and repairing the front car is $2,000. Car Insurance has this co-insurance thingy called Excess to discourage minor and excessive attempts to claim against the insurer. Let’s assume the Excess to be $3,000 (Came across 1 company which quoted this excess amount). To “allow” the front car to claim Robert’s car insurance, Robert has to pay his insurer $3000 first. In the above case, simple maths would tell Robert that he is better off paying for the damages directly instead of getting the front car to claim his insurance. In this case, Robert total damage is $1,000 + $2,000 = $3,000.

If in a more serious accident, the cost of repairing Robert’s rental car is $3,000 whilst the front car is $6000.  Robert is better off letting the front car claim his insurance. Total damage to Robert is $3,000 for the rental car repair and $3,000 for the insurance excess = $6,000 and the insurance policy will pay the balance.

Insurance type B (Comprehensive) would cover both the rental car and the third party damages, and yes there will also have an Excess levied. Let’s say this excess is $2000 for the comprehensive insurance. In Robert’s car kissing accident, Robert would just need to pay $2000 for the damages to the rental car and the third party. If unlucky Robert strikes a wall while reversing into a parking lot and the car bumper came off, cost to repair is $400, Robert is better off paying that $400 instead of claiming the comprehensive policy which has an excess of $2000.

Insurance Excess is mainly dependent on these few factors

  1. Driving experience (if you have just passed your driving test, excess will be increased)
  2. Age (some insurers may increase excess due to age related stuff like poorer eye sight etc)
  3. Make and type of insured car (costs to repair a Toyota vs a BMW is way different)
  4. Your driving track record (in some car rental forms, they may ask you to declare if you have any demerit points, or involved in accidents recently, if you falsely declare, the insurer will use it against you in any claims)

Looking at the insurance provided is more important than going for the cheapest rental! Here are the tips for renting a car

  1. Visit or at least call the rental company for details of the insurance provided. Ask all the “what if” questions like, car break down, punctured tyre, who to call etc.. If they are not interested to answer you, it shows what kind of service you are going to get when shit happens. My preference would be to visit the shop.
  2. Look at insurance cover note (they usually put in the car compartment) and the road tax disc, make sure they are valid
  3. Check carefully for any scratches or damages during the vehicle inspection (before the car is handed over to you), the rental guy will note it down on the forms so that the company cant turn around say the damage is done by you. (you can take photos of the damages)
  4. Start the engine and make sure there is no funny noise, check signal lights, headlights, air-con etc. Most people will miss out checking the spare tyre.
  5. If there is any personal items that is already in the car before takeover, get the guy to remove it.
  6. Most rental cars are fitted with immobilizer, the car engine will be dead the moment you reached Singapore Check points. Car rental companies will charge you $$ to re-initiate the car  immobilizer. So don’t ever try to pull a fast one on the car rental company. Get a car that is allowed to be driven to Malaysia if you intend to drive there.
  7. Invest in a recording camera for car if you can.

 

If “suay suay” (unlucky) you got into an accident, here are the things you should do

1.Stop the car and call the car rental company immediately. If the rental company people is un-contactable  during the festive period, call the insurance company. The rental company should have briefed you on who to call.

2.Call the police if there is any injury (even if there is only a small cut on the fingertip on any of the passengers or drivers)

3. Do not move the vehicle unless police tells you so.

4.Exchange particulars

5.Take photos of both your rental car and the other party.

6.Do not go for any “private settlement” even if you are willing to pay for the damages. You can always inform the insurer you do not intend to claim and you are willing to pay for it. In any disputes in the private settlement, its always your word against his word. The other party may pull a fast one on you.

 

Stay Safe! Don’t drink and drive nor touch your mobile devices while driving (Traffic Police has upped their prices in case you are not aware about it!)

Here is a simple summary of the new rules

  1. no touching or holding any mobile devices or handheld even at traffic lights
  2. no surfing web or looking at your FB posts etc or texting

If you are caught doing these, you are going to contribute to Uncle Sam’s state coffers, or worse receive a court summon for the offense. The new rules allowed the devices usage provided it is mounted, but the definition is pretty vague, I would not suggest you to test the water.

 

MyMortgage Team would like to wish you a Happy and

Prosperous Chinese New Year!

Huat Ah!

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