Higher Automotive Insurance Policy in 2015

I meant to share this last week, but it kinda slipped my mind. Anyway, the gist of it is the title itself, one of our minister made a statement about this.

3 Questions for Awang Adek for the statement which was captured by the Star.

1. Why benchmark with our neighbours? Yes, we love to do that, compare with neighbours. Just like real life, how we wonder our neighbours has 4 Mercedes, had major renovation, 3 bibiks.. it seems to be a benchmark that we have to beat. So if our car premium is cheap, we should increase it. We cannot afford to lose to our ‘lowly’ neighbours.

2. What is the car price in Malaysia? The stupid thing is, we are paying 300% more than anyone in this world. A Volkwagon is perceived as luxury car while others only see it as no-frill, only Malaysian would drool over VW Polo. It’s just like kancil in other countries! If you really want to increase the insurance, you should remove import duty which have been preventing us from obtaining vehicles with REAL world safety standard.

3. Who would benefit from this? Motorist, insurance companies or government. If increased, motorist bleeds money, insurance gained more and more tax for the government. But does that mean you’ll invest in the betterment of our public transport and roads? You privatized busses and trains, funded using rakyat’s money but still trying hard to be in the red. Look at our roads. We’ve been building it for the past 100 years, we still couldn’t figure out what causes pot holes or how to make a road that lasts for tropical country.

Let’s just say you abolish import duty and impose higher insurance, what would happen to older car’s policy? Would it increase? Then what is the value of second hand cars? What is the impact on the automotive industry? Increasing price is a very sensitive issue. Or is this just for new cars with no import tax? If that’s the case, time to sell off my national pride.

To you Mr Minister, insuring a Gen2 for RM 900 is cheap, but to us, it means another call to our banker to increase credit limit.

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