Automatic vs Manual: How The Gear Type Affects Car Insurance Premium

Whenever we plan to buy a car, one significant debate that arises is when choosing between manual and automatic gear. And more often than not, the debate turns out to be a never-ending one, considering both options come with their own benefits.

Interestingly, amidst the discussion, many car buyers are unaware that the type of gearbox chosen for their car goes a long way in determining their car insurance premium as well. Yes, you read that right. Your gearbox is among the important factors that determine the amount of motor insurance premium you¡¯ll have to pay.

Moreover, as the Indian Motor Vehicles Act makes car insurance mandatory for all vehicles operating in any public space, making the right choice of gearbox can come in handy when making the decision.

What Is The Difference Between Manual & Automatic Gear?

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Before you understand the effect of car insurance cost (premium) on manual and automatic cars, let¡¯s know the difference between manual and automatic gearbox.

Manual gearbox

As the name suggests, a manual gearbox car requires the driver to manually shift gears to propel the vehicle forward or to reverse it. Some drivers may find the additional coordination challenging, while others may find that the manual gearbox makes for a more engaging driving experience.

Automatic gearbox

A car with an automatic gearbox is the opposite of a manual car. Instead of the driver manually shifting the gears to propel the vehicle, an onboard Electronic Control Unit (ECU) guides the gearbox based on how the accelerator pedal is operated. Hence, an automatic gearbox changes gears on its own and does not require manual intervention. While it may not be fun to ride, it offers a hassle-free driving experience, especially in crowded urban areas.

How Does Gearbox Type Affect Car Insurance?

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Motor insurance cost for cars is determined based on many important factors, including the size of the engine, model, year of manufacture, location and the approximate market value of the vehicle.

Assuming that the only difference between the two cars is their gearbox, an automatic car usually costs more than the manual to insure. The reason is that the cost of repair or replacement of an automatic gearbox is higher than a manual gearbox or transmission, as per Acko. Hence, the car insurance premium is slightly higher for an automatic car. However, the difference in cost is marginal and not substantial.

Also Read: Why Life Insurance Premiums Are Cheaper For Women

Which Other Factors Affect Car Insurance Cost?

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The car insurance premium is based on different and vital factors, but also several others. Here are the primary factors impacting the car insurance cost.

Make/model/variant: Motor insurance cost for a luxury car will undoubtedly be higher than a regular car like a hatchback. The vehicle manufacturer, engine cubic capacity, vehicle type, etc., also affect the premium cost of car insurance.

Age: Over time, the vehicle value depreciates due to wear and tear. Hence, the car¡¯s age is essential for calculating the insurance cost.

Coverage: Besides the mandatory third-party car insurance, ensure you also opt for the Own Damage cover for wholesome insurance coverage for your vehicle.

Location: Location is essential since insurance costs tend to be higher in metros than in tier 3 cities.

Also Read: Inclusion Of Mental Illness In Health Insurance Made Mandatory

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