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Usage-Based Car Insurance vs Mileage-Based (Pay-Per-Mile)

SingSaver team

SingSaver team

Last updated 03 January, 2023

Get the best protection for your vehicle at the best possible price.

Do you know which type of car insurance is right for you? There are a few different types, but one that is growing in popularity is usage-based car insurance. This type of policy bases your premiums on how often and how far you drive. But there is another option available – mileage-based car insurance. Which is right for you? We’ll compare the two so you can evaluate which is better for you. 

Factors to consider when choosing auto insurance

There are several factors to consider when selecting an auto insurance package. It should be affordable and provide you with the coverage you need. In this section, we look at the most important factors to consider.


The most important factor to consider is whether a package provides you with the coverage you require. Coverage types include:

  • Comprehensive
  • Fire and theft
  • Third-party only

Comprehensive cover provides you with complete coverage against accidents and other dangers you are likely to face. Comprehensive coverage also protects you from incidents such as falling trees, floods and other natural disasters.

On the other hand, third party covers damage to other people’s cars but not yours. It’s a minimum auto insurance requirement. Third-party fire and theft cover extends the coverage to cover fire and theft.

Model and year of the car

The age of the car affects the premium you will pay for insurance. The older the car, the lower the premiums. You will pay a higher premium for new cars.

Another factor that affects the cost of insurance premiums is the model. Models manufactured in Asia typically pay lower insurance premiums as compared to those from Europe. In addition, if your car's engine has a smaller capacity, your insurance premium will be lower.

Driving history

People with less driving experience will pay a higher premium than those who are experienced. This varies from one insurance company to the next. Insurers may keep track of your driving history and use that to determine the premium you need to pay.

No-Claims Discount

If you drive carefully and have no claims for a long time, you are likely to benefit from the no-claims discount. A driver who has not made claims before is likely to enjoy a lower insurance cost.

Vehicle modification

Alterations you make to your car can result in higher insurance premiums. In Singapore, any motor vehicle alterations should be compliant with the Land Transport Authority regulations. It’s important to be sure about the guidelines before you make any modifications.

Other factors to consider

Listing additional driver/s

Listing an additional driver increases the insurance premium, as it extends the coverage so the additional driver is insured while driving the car.

Roadside assistance

With roadside assistance added to your cover, you can be sure that you will receive help any time of the day in case there is an accident. Roadside assistance is important, especially for younger drivers.

How to get cheaper insurance premiums

 The cost of auto insurance depends on how risky the insurer considers you. Here are tips to help secure the cheapest insurance premiums.

  • Use the authorised car repair workshops.
  • List one driver per car. Additional drivers can result in a higher premium.
  • Shop around for the best insurance rates.
  • Forego other services such as car rentals while your vehicle is in the workshop.
  • Older drivers are likely to get cheaper premiums rates as compared to younger ones.

What is usage-based insurance?

Usage-based insurance, or UBI, is a type of insurance coverage that is based on an individual's driving behaviour. Rather than charging customers the same rate regardless of their actual driving habits, UBI charges customers based on specific factors. UBI considers factors such as mileage, time of day, and frequency of hard braking.

By tracking and analysing these behaviours, providers can better assess the risks associated with each customer and adjust premiums accordingly. Usage-based insurance can enable drivers to be billed more fairly. And as mobile technology continues to evolve, UBI is likely to become an even more practical and popular form of insurance in the future.

How does usage-based insurance work?

Usage-based insurance is an auto insurance policy that tracks the telematics of a driver using a wireless device that is installed in the car. The device collects information and transmits the data to the insurer. The cost of usage-based insurance depends on the risk factor.

The device installed collects information such as:

  • Speed
  • Acceleration
  • Hard braking
  • Hard cornering
  • Miles driven
  • Time of day when the drive is undertaken
  • Whether a cell phone is used while driving

Insurance companies may offer you a choice on how you want the data collected. Whether it’s through plugging a device into your car or through an app, based on the data collected over a period, the insurer determines the kind of package that suits you.

What is mileage-based insurance?

Mileage-based insurance is a type of insurance that charges customers based on the number of miles they drive. This type of insurance can be beneficial for people who don't drive very often, as they save money on their premiums. Mileage-based insurance is less expensive, and it's a great way for people who don't drive much to save money.

The main downside of mileage-based insurance is that it can be expensive if you drive a lot. In addition, it may not be possible to accurately estimate your mileage.

How does mileage-based insurance work?

Paying per mile uses a base rate plus a monthly mileage rate to determine your auto insurance premium. The premium will change as your mileage changes. Drivers with more mileage typically pay a higher insurance premium.

To determine the pay base, the insurer considers factors such as age, gender, and the model and make of the car. Mileage-based insurance offers you the same liability car insurance, collision coverage, comprehensive coverage, and medical coverage as the traditional types of insurance.

The best car insurance plans in Singapore

While usage-based and mileage-based plans may help you to save money, ultimately you’ll have to compare them against other reliable plans to check that the coverage and price deliver you the best possible deal. Here are some of the top car insurance plans in Singapore that you can consider. 

Covered (by Carro and NTUC Income)

Carro provides one of the few usage-based plans for car insurance in Singapore. All members start with an upfront fee of $150, then pay for their usage monthly. A telematic device transmits information on your driving details; the shorter a distance you drive, the more you will save. Covered provides Third Party, Third Party Fire and Theft, and Comprehensive (termed as Classic) plans. Depending on the plan you get, you could also access minor or major servicing. Towing and 24/7 emergency assistance are provided regardless of the plan you are on. 

MSIG Car Insurance


MSIG insurance provides affordable auto insurance coverage. MSIG offers two comprehensive covers and has over 30 authorised workshops, making it a convenient insurance partner. Here are the details of what you can expect.

Coverage Description  MotorMax MotorMax Plus
Comprehensive coverage  Covers the vehicle against accidental loss or damage. In case of liability, the insurer will pay the market value of the car at the time of loss and damage. In case of liability, the insurer will pay the market value of the car at the time of loss and damage.
Liabilities to the third party Death or bodily injury to a person Unlimited Unlimited
Damage to property S$5,000,000 S$5,000,000
Personal accidents benefits Policyholder S$20,000 S$100,000
Authorised driver /passenger (up to legal seating capacity) S$10,000 each S$50,000 each
Medical Expenses Policyholder S$10,000 S$10,000
Authorised driver /passenger (up to legal seating capacity Up to S$1,000 each Up to S$1,000 each
Choice of workshop   MSIG-authorised workshop Any workshop
Transport allowance While the car is under approved repairs Not covered S$50 per day. Max 10 days. 
New for old replacement Replaces old with new of the same make, model and engine capacity Not covered Covered
Loan protection benefits Pays the outstanding  loan amount  Not covered Up to S$10,000
Windscreen   Auto reinstatement  Auto reinstatement
24-hour automobile and medical assistance services Emergency towing, roadside assistance, vehicle repatriation, accident, and police report notification. Available Available
Emergency medical evacuation and repatriation  For policyholders during the accidents within the geographical area S$50,000 S$50,000

AIG Car Insurance


AIG is a renown insurance company that offers the best collision coverage insurance. It also allows you to customise your coverage based on your predicted mileage over the next 12 months. AIG offers both car insurance collision-only and comprehensive car insurance plans. These are the benefits of the two plans.

Benefits Collision-Only Plan Complete Plan
Damage to own vehicle due to accident In the event of a collision with another vehicle Covered
Damage due to fire Covered in the event of a collision that results in a fire Covered
Authorised driver Covers drivers within your household only Covers drivers within your household only
Bodily injury Unlimited cover for third party bodily injury Unlimited cover for third party bodily injury
Property damage Covers third-party damage of up to S$5,000,000 Covers third-party damage of up to S$5,000,000
Authorised workshops Vehicle repairs must be done at authorised AIG workshops Vehicle repairs must be done at authorised AIG workshops
Accidental towing Towing services for up to S$500 Towing services for up to S$500
Excess waiver if you share your in car camera footage  Receive a waiver of up to S$1,000 Receive a waiver of up to S$1,000
Cover against theft Not covered Covered
Cover against natural disaster Not covered Covered
Cover against a strike, riots, and civil commotions Not covered Covered
Windscreen/window cover with automatic reinstatement of the benefits (S$100 excesses before GST applies) Not covered Covered

Allianz Motor Protect


Allianz insurance offers great value for money. They have one of the cheapest insurance policies in the market. Here are the benefits you can expect from Allianz Motor Protect.

Coverage Third-party only Third-party fire and theft only Comprehensive
Damage by accident or loss of the car by theft Not covered Not covered Covered
Damage by fire or loss of the car by theft Not covered Covers Covers
Tax reimbursement Not covered Not covered Covers
Towing cost Not part of the cover Not in the plan Part of the plan
Authorised repair Limited Limited Unlimited
Damage to third party Covered Covered Covered
Death or  injury to a third party Covered Covered Covered
Legal representation and defense Covered Covered Covered
New for old replacement Not covered Not covered Not covered
Courtesy car No Car  No Car Provided
Daily transport allowance No transport No transport Provided
24/7 roadside assistance  The cover does not provide roadside assistance The cover does not provide roadside assistance Covers roadside assistance
Unlimited windscreen cover Not covered Not covered Covered
No-claim discount (NCD) You qualify for an NCD You qualify for an NCD You qualify for an NCD
Repairs at any workshop Not allowed Not allowed Allowed
Personal accident and medical expenses Not covered Not covered Covered

Singlife Car Insurance

Singlife Logo - Red on White - Horizontal

Young drivers face a dilemma because they are considered risky – but not when it comes to Aviva. Aviva offers three plans: lite, standard, and prestige. Aviva has one of the lowest minimum age requirements at 24 years. Here are the benefits of Aviva insurance.

Plans Lite Standard Prestige
Car repairs Only approved repairer  Any repairer Any repairer
Car replacement Replacement done for cars less than 12 months old Replacement done for cars less than 12 months old Replacement done for cars less than 12 months old
Additional excess for young and inexperienced drivers S$2,500 $S2,500 S$0
Windscreen excess payment S$100 S$100 S$0
Medical expenses Covers the passenger and the driver up to  S$500 Covers the passenger and the driver up to  S$2,500 Covers the passenger and the driver up to  S$5,000
Damage to 3rd party property Up to S$5,000,000 Up to S$5,000,000 Up to S$5,000,000
Damage to personal belonging S$0 Up to S$1,000 Up to S$1,000
Transport allowance S$0 S$0 Transport allowance of up to S$80 for up to 10 days

SingSaver Exclusive Promotion: Get 23% off premiums when you use the promo code CAR23 (for new businesses and annual plan only). Valid till 31 Oct 2023. T&Cs apply.


The ultimate decision between usage-based and mileage-based car insurance is up to you, but we hope this article makes your selection easier. Compare the different options available and choose the auto insurance that suits your needs.

Save on your car insurance by comparing the different options available. Sign up to get the best car insurance cover.

Read these next: 
Car Sharing Options In Singapore
How Much Does It Truly Cost To Maintain A Car In Singapore?
7 Facts You Need to Know About Car Rental Insurance in Singapore
What You Need To Know And How These 5 Factors Determine Your Car Insurance Premium
Best Car Loans in Singapore

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