Auto insurance 

Cheapest car rental in Singapore

Singapore is a small country. The limited space means the Government needs to control the number of cars on the road or else the roads will be crowded. This is why Singapore has the highest cost of car ownership in the world.

The public transport system is highly developed: the MRT (subway) and public buses reach almost all parts of the island. That’s why some residents only rent a car when necessary, such as a family outing to multiple places on the same day or a day trip to neighboring Malaysia.

Car rental in Singapore can be cheap and affordable. A regular sedan like Toyota Altis, Toyota Vios, Honda City or Mitsubishi Lancer can cost as little as $68 a day, the same applies to hatchbacks like Honda Fit or Jazz. A minivan like the Mazda Premacy or Hyundai Trajet can cost as little as $78/day, compared to the usual range of $100-$120/day.

Over the past 10 years, there are many wayward car rental companies that rent out cars that do not belong to the company, but to private car owners who cannot afford to pay the car loan installments. “So what?” you ask. There is a great hidden danger.

A proper car rental company owns its fleet of vehicles, and the fleet is insured by an insurance company that covers “rental and reward.” Normal private car insurance will not cover ‘contract and reward’, exposing you to unlimited liability.

What does this mean? Example:

You have rented a car from a wandering car rental company where you are not adequately covered by “rental and reward” in the insurance policy and then got into a traffic accident in which you caused injuries to a pedestrian. The pedestrian sues for $100,000 in damages, but the insurance company refuses to pay for breach of contract. The judge subsequently ruled that you were, say, 70% responsible for the victim’s injuries, and the claim amount (quantum) is adjusted to $70,000 instead of the original $100,000. This means you have to compensate $49,000 (70% of $70,000) to the victim, otherwise you will declare bankruptcy. Additionally, you may be prosecuted for driving without valid insurance, which carries a fine of not more than $1,000 or imprisonment of not more than 3 months, or both.

This is a very big risk! Why would you want to risk going broke just by renting a car? What’s more, errant car rental companies may not necessarily charge lower rates than properly insured companies.

How do you know if the car is properly insured for “rental and reward”? The easiest way is to check the vehicle’s road tax disc. A vehicle registered with LTA (Land Transport Authority, Singapore) for rental purposes with valid rental insurance coverage will bear the word “MOTORCAR” below the expiration date, instead of “PASSENGER(PRIVATE)” or “PASSENGER( CO)”. You can dial 1800-CALL-LTA to verify.

Generally, proper car rental insurance would not cover “P plates” (drivers with less than one year of driving experience). Most may not even cover drivers under 23, regardless of their driving experience. Therefore, if you are young (< 23 years old) or inexperienced (P plate), you would be taking a very big risk if you drive a rental car because, regardless of whether it is a suitable car rental company or not, you will not be covered . !

We have a recommended dealer here who has a fleet of vehicles in good condition and adequate insurance coverage. The company is legally incorporated and registered with LTA as a vehicle rental company. It also has a “LOWEST PRICE GUARANTEE”, which guarantees that you won’t be able to find a cheaper deal anywhere else.

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