What Are The Differences Between Car Insurance and Roadtax

Learn the differences between car insurance and roadtax in this article.

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Car owners are obliged to renew their vehicle insurance and road tax every year.

Can we choose to renew any insurance or road tax to enable us to drive on highways legally? What are the differences between them? Read this article to learn more about the topic.

Definition and function of car insurance & roadtax

Roadtax

Roadtax adalah sejenis cukai yang dikenakan terhadap setiap pemilik kenderaan bermotor di Malaysia

Road tax is a form of tax imposed on all motor vehicle owners in Malaysia to drive on the road legally. It is compulsory to renew road tax annually, according to the Road Transport Act 1987.

Vehicle owners can choose to renew the roadtax: i) 6 months or ii) 1 year. The price remains the same according to your car model.

The road taxes that the Road Transport Department (JPJ) collects fund many purposes. Examples: the Public Works Department of Malaysia (JKR) uses the fund to repair, build and upgrade the highways.

The prices differ based on the engine capacity, geographical location, vehicle types, and vehicle ownership. You may learn more regarding the road tax prices for all vehicles here.

Car insurance

Tanpa insurans, pemilik kenderaan tidak akan boleh memperbaharui roadtax

Unlike road tax, insurance is a means of protection from financial loss. It is a policy designed to protect the insured against the actions or claims of a third party.

Insurance will protect your vehicle from untoward incidents like theft, fire, damage, and compensation for vehicle damage. Please note that this is eligible for comprehensive policy only. The insurance coverage lasts for a year. Renewal is compulsory every year.

The premium will be pooled with other policyholders under one insurance company fund. The fund will be used as compensation to you in the event of an accident.

Unlike road tax, the insurance premium is different and changes every year. There is usually a reduction in the premium rate if the policyholder has an NCD entitlement during the year.

Differences between car insurance & roadtax

Please refer to the table below to further understand the differences.

Car insuranceRoadtax
Prices vary according to the market price of the vehicle and the owner’s NCDPrices remain the same on the same vehicle
Required to protect the vehicle and third party’s claim from any untoward incidentsMandatory as regulated under the Road Transport Act 1987
Mandatory renewal for a period of 1 yearRenewable for a period of 6 months or 1 year
Has various plans/ benefits provided by insurance & Takaful companiesNo plans available
Prices are subject to change (depending on the policy)Price is fixed
Able to get additional discounts offered by insurance companiesNo usual discounts
May have additional chargesNo additional charges

Can you renew road tax without insurance?

The answer is no!

You need valid insurance to renew an expired road tax. Failing to renew insurance beforehand will hinder your road taxes renewal.

When should you renew insurance and roadtax?

You may renew insurance 60 days, equivalent to 2 months before the expiry date. For road tax, you may renew it after renewing your insurance.

Do you need to compare prices for roadtax?

No. You do not have to compare the prices for roadtax because it is a fixed price. The price remains the same as long as it remains on the same vehicle.

Do you need to compare insurance?

The answer is yes! We recommend you shop around first.

Comparison will allow you to compare and get the best policy at an affordable price. It is not a complicated task to compare insurance. You do not have to check one by one with insurers to compare prices and benefits.

Use the biggest insurance-comparison site in Malaysia, Bjak, to renew your insurance.

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