Car Insurance For Secondhand Cars: How To Find The Best Coverage

Buying a secondhand car is an economical practice preferred by many Filipinos as it allows them to get a new ride at a cheaper cost.

One question that many people thinking of or who buy a pre-loved vehicle is, do you still need to insure your secondhand car?

The answer is, definitely. A secondhand car is more prone to various mishaps due to the wear and tear with months or years of use.

Read this guide to learn how to get comprehensive car insurance for secondhand cars in the Philippines today.

What protection do I need for my secondhand car?

An automobile is at risk every day even if you’re driving on a familiar route or just parked somewhere you think is safe.

Below are the common scenarios that make your secondhand car vulnerable.

1. Calamities caused by humans

Rallies, riots, fires, and the likes may cause damage to your automobile’s exterior.

In addition, it’s hard to seek financial assistance with these types of disturbance as it is challenging to pinpoint who caused the damage.

2. Natural catastrophes

Massive floods, landslides, earthquakes, etc. are unavoidable and can cause minor to unrepairable damage to your motor vehicles. A good policy, especially one that has Acts of Nature coverage, can lessen your burden.

3. Third-party risks

If you get into an accident, a large amount of money might be needed to pay for any injuries or damages you cause to third-parties. If you have a prepared policy, everything will be settled financially.

4. Theft

If you think newer models are the target of carnappers, it’s surprising to know that Toyota Camrys and Honda Civics made in the 90s are often stolen for their parts.

In addition, these older models are usually not equipped with location tracking devices, making them easier to steal.

(Read: The Ultimate Guide To Getting Car Insurance In The Philippines)

Factors that affect the insurance premium of a secondhand car

A vehicle being previously owned doesn’t equal cheaper insurance as several other considerations that automobile insurers look for before they calculate the insurance premiums and decide to insure the vehicle.

For a better understanding, check out the list below.

1. Age of the vehicle

Insurance companies usually will only agree to insure used cars aged 10 years and below. They may approve older ones, but this will usually have a high-interest rate.

2. Condition of the car

The general state of your automobile affects your premium. Used cars are often checked more thoroughly by insurers.

3. The probability that it will be stolen

For reference, the following are the most carnapped vehicles in our country as of 2019 from a recent survey conducted by Top Gear Philippines:

  • Toyota Vios
  • Ford Ranger
  • Honda Civic
  • Isuzu Mu-x
  • Nissan Urvan
  • Toyota Camry
  • Toyota Fortuner
  • Ford Raptor

In addition, luxury cars, even if previously owned, pose a high risk of being stolen, which results in soaring premiums oftentimes amounting to the price of a new mid-market automobile.

4. Cost of repair

Whether its minor or total overhaul, the price of its repair should not exceed or equal the car’s market value as it will be rejected by insurance companies.

5. Availability of spare parts

If a vehicle’s major parts are only available overseas, the cost of fixing it will be higher. This, in turn, will affect its eligibility for coverage.

6. The automobile’s safety level

Crash-test scores are important even in used automobiles. Additionally, safe automobile guarantees that in case of an accident, fewer injuries will occur resulting in minimal claims and a better chance that an insurer will be willing to set a lesser premium.

7. The owner’s lifestyle

“How fast do you drive?”

“Is your area prone to flooding?”

These are just two of the common queries used by automotive insurers to check your lifestyle before granting your requested coverage.

Note that you must answer in full honesty as doing the opposite will void your application.

Companies offering insurance for secondhand cars

The following are the top car insurance companies in the Philippines that provide coverage for up to 10-year-old cars today.

Take note that the companies below insure cars aged 10 years old, they will also, however, consider older cars.

1. AXA Insurance (formerly Charter Ping An)

  • 10-year-old cars are welcome
  • Has 55 recognized auto repair shops
  • Offers free auto passenger accident insurance amounting to P50,000 each for five passengers

2. Standard Insurance

  • 12-year-old cars are welcome
  • Has 200 plus recognized repair shops
  • Offers complimentary 24/7 roadside aid nationwide
  • Offers free auto passenger accident insurance amounting to P50,000 each for five passengers

3. Western Guaranty

  • 10-year-old cars are welcome
  • Offers complimentary 24/7 roadside aid nationwide

4. QBE Seaboard

  • 10-year-old cars are welcome
  • Has 200 recognized repair shops
  • Offers free auto passenger accident insurance amounting to P50,000 each for five passengers
  • Offers free roadside aid for qualified cars

5. FPG Insurance

  • 10-year-old cars are welcome
  • Has 242 recognized repair shops
  • Offers complimentary 24/7 roadside aid
  • Offers free auto passenger accident insurance amounting to P50,000 each for five passengers

6. Etiqa

  • Has 147 recognized auto repair shops
  • Has free towing assistance amounting to P5,000
  • Offers free auto passenger accident insurance amounting to P50,000 each for five passengers

7. Stronghold

  • 10-year-old cars are welcome
  • Has 125 recognized auto repair shops

8. The Mercantile

  • 10-year-old cars are welcome
  • Has 11 recognized auto repair shops
  • Offers free auto passenger accident insurance amounting to P50,000 each for five passengers

9. Oriental

  • 10-year-old cars are welcome
  • Has 74 recognized auto repair shops
  • Offers a complimentary 24/7 roadside aid
  • Comes with free auto passenger accident insurance amounting to P50,000 each for five passengers

(Read: A Quick Guide To Available Non-Standard Car Insurance Inclusions)

Requirements when applying for secondhand car insurance

Listed are the documents that insurance companies generally ask for when you are applying for car insurance.

  1. Notarized Deed of Sale of the automobile with the buyer’s name
  2. Driver’s license of the applicant
  3. Certificate of Registration (CR) bearing the registered owner’s name
  4. Photocopy of the Official Receipt (OR)
  5. Government-issued identification like Philippine Passport, Social Security System (SSS) ID, Government Service Insurance System (GSIS), Senior Citizen ID, etc. Company, school and alumni IDs are also accepted.

How to get a car insurance for secondhand cars in the Philippines

  1. After choosing your provider, gather the requirements needed.
  2. Make a detailed list of your car’s specification including:
    • Brand of vehicle
    • Car model
    • The year it was released
    • Variant
    • Transmission
    • Color
    • Plate number
    • Car utilization (either for personal or commercial use)
    • Status of the vehicle’s ownership
  3. A visual inspection will be conducted by the insurance company to confirm the information you provided, they may:
    • Visit you to check the motor vehicle’s condition
    • Instruct you to proceed to their office for the automobile’s examination
  4. They may also request clear photos of your car that include:
    • Chassis number or Vehicle Identification Number (VIN)
    • Present odometer reading
    • Engine compartment
    • Front side
    • Left and right side
    • Rear
    • Interiors
    • Wheels and tires
    • Additional accessories installed
  5. Submit. The submission may be done by passing your documents to the insurance company’s office, delivering it through mail or sending clear photos through their email.

(Read: 5 Easy Ways To Reduce Your Car Insurance Premium)

Additional notes

Ask your chosen insurer if aftermarket parts and modifications can be insured as they can be added to the total insured value.

Double-check everything required and make sure no errors exist. Minor flaws, if not corrected before processing could be costly to fix.

(Read: Save On Car Insurance By Asking These Four Questions)

How to lower the premium of your secondhand car insurance

1. Pick the right coverage

You are required by law to acquire Compulsory Third-Party Liability (CPTL) insurance. CPTL gives compensation to people who got injured or killed in the motor vehicle accident.

Take note that a mandated P100,000 will be provided to cover for the expenses, beyond that you, as the driver who caused the losses and damages.

2. Increase the deductibles to lessen your premium amount

If you’re financially capable of paying more for the loss, you can increase your deductibles which will lessen your premium.

Presently, a private vehicle’s deductible amount starts at P2,000 but we suggest not to increase it too much as your future claim might be too expensive for you to handle.

3. Always practice safety on the road

Establishing a clean record enables you to get a no-claim bonus that may lessen your premium by up to 50%.

4. Compare insurers and choose the best

If you don’t have the luxury of time to personally visit each insurance companies, go online and use a car insurance comparison site. Easily get a comprehensive list of all the credible secondhand car insurers in our country and see which one provides a policy that suits your needs.

The measure of an ideal driver isn’t found in what they drive, be it new or second-hand. It’s seen in how prepared they are for unexpected situations. Make sure that you are covered for all eventualities.