Know The Impact Of Car Insurance Premiums On Manual And Automatic Cars


04 Aug 2023

Discover how manual vs automatic cars affect insurance premiums. Get a buying guide on gearboxes & compare car insurance policies with Kotak General Insurance.

Nowadays, automatic cars are more popular among car owners than manual cars because automatic cars are more convenient to drive. Both automatic and manual vehicles have several models and variants from which you can choose.

Whatever car model you choose, you must decide whether you want a car equipped with a manual or automatic gearbox as the insurance premium rates for both these types of vehicles are different. Let's delve into how manual and automatic gearboxes affect your car insurance premium.

Difference between the manual and automatic gearbox

Before understanding the difference in premium rates of automatic and manual gearboxes, it is paramount to know the difference between them.

A manual gearbox requires the driver to shift the gears manually. However, in cars with an automatic gearbox, the Electronic Control Unit (ECU) directs the vehicle to change the gear, making it more expensive to be replaced if damaged. So, an automatic gearbox is a higher liability for insurance companies than a manual gearbox.

There are other factors that differentiate the two gearboxes, such as maintenance costs, mileage, pricing of cars, etc.

Buying insurance for manual and automatic gearbox

Irrespective of the type of car you purchase, it is mandatory to at least have a third-party liability as per the Motor Vehicles Act. Also, as vehicles are quite expensive, paying for any damages or replacing any part becomes equally costly, making it necessary to buy an own damage insurance.

Today, most car owners prefer buying a comprehensive car insurance policy, which covers both third-party liability and own damage. The insurance premium for cars with an automatic gearbox is higher than those with a manual gearbox.

The difference in insurance premiums for automatic and manual gearboxes

Suppose two cars have all the same features, and the only difference is with the gearbox; a car equipped with an automatic gearbox would cost more than a car with a manual gearbox. The higher cost of an automated vehicle increases the IDV (Insured Declared Value). A higher IDV means a higher premium cost. Hence automatic gearboxes have a higher premium than manual gearboxes.

IDV is the maximum amount the insurance company pays if the car is damaged beyond repair. The IDV is fixed according to the market value of the vehicle. Apart from IDV, other factors affect the insurance premium, such as engine type, location, car model, etc.

Ways to decrease the insurance premium for automatic cars

One of the best ways to get a discount on the premium of your car insurance policy upon renewal is to redeem your NCB (No Claim Bonus). Typically, the insurance companies reward the policyholders with NCB for not filing a claim during the policy year.

As automatic cars have a higher IDV, maintaining these cars becomes mandatory to avoid unnecessary claims and losing on your No claim Bonus. Here are a few tips for maintaining automatic vehicles.

• Regular maintenance:

A regular check on the car's transmission fluid is necessary to avoid contaminated fluid from overheating or wearing down the gears.

• Service the cooling system:

The cooling system of the engines protects the car from overheating and cools down the transmission fluid flowing through the gearbox.

• Avoid changing gears when moving:

Try to shift the forward and reverse gears only when the car is brought to a complete stop.

Final word

Now that you know the difference in premium rates of cars with a manual and automatic gearbox, do not delay getting Comprehensive car insurance online. You can choose higher coverage with more add-ons by purchasing Kotak Car Secure comprehensive insurance policy from Kotak General Insurance and keep your vehicle protected at all times.

Team Kotak GIC

The content of this blog has been created and carefully reviewed by the esteemed team at Kotak General Insurance, with the sole purpose of providing valuable guidance and sharing insights on the importance of general insurance. Our objective is to assist users in making informed decisions when purchasing or renewing insurance policies for their cars, bikes, and health. Our expertly curated information aims to empower our readers with the knowledge they need to protect their valuable assets and financial interests.