How to Calculate Car Insurance Premium by Driver Age and Car Model

Two people can insure the same car for the same year and still pay very different amounts. Two of the biggest reasons are who drives the car and which car it is. A 20-year-old on a P licence and a 45-year-old with years of claim-free driving will usually see different quotes, and so will a Perodua Axia and an imported SUV.

This guide explains how Malaysian insurers use driver age and car model when they price your policy, and how to work out your own premium step by step. If you want a line-by-line look at every charge on your quote, read our car insurance premium breakdown as well.

Why Insurers Can Price by Age and Model

Malaysian car insurance used to follow a fixed motor tariff. Bank Negara Malaysia (BNM) changed this in phases. From 1 July 2016, insurers and takaful operators could price new motor products and add-ons more freely. From 1 July 2017, they were allowed to set their own premiums for comprehensive and third-party, fire and theft cover, as explained on BNM’s motor insurance liberalisation page.

Basic third-party cover is still sold at tariff rates, so the age and model effects described below matter most for comprehensive and third-party, fire and theft policies. According to Allianz Malaysia’s liberalisation FAQ, insurers still look at the sum insured, engine capacity, vehicle age and driver age, and may also consider factors such as safety and security features, where the car is kept and traffic offences on record. Each insurer groups these risks in its own way, which is why quotes differ.

How Driver Age Affects Your Premium

Insurers price risk, and driving experience is a big part of that risk. Product disclosure sheets from Malaysian insurers list your age as one of the factors that can change your premium. For example, a car insurance product disclosure sheet published on Maybank2u says the premium may vary with the sum insured, the make and model of your vehicle, your age and your past claims experience.

Young and newly licensed drivers

Younger drivers usually pay more in their first few years on the road. They have less driving experience, and most have not built up a No Claim Discount (NCD) yet. Our P licence car insurance guide covers this in more detail.

Age can also affect what you pay when you claim, not only the premium itself. Some policies deduct an extra compulsory excess if the driver is young or inexperienced. For example, the Zurich Z-Driver policy wording allows the insurer to deduct an additional RM400 from an own damage claim if the driver at the time is under 21, holds a P or L licence, or is not a named driver. Always check the excess terms in your own policy.

Experienced drivers

Drivers with a long, clean record tend to get the best prices, mainly because of NCD. The discount can reach 55% after five consecutive claim-free years, which often makes a bigger difference than age alone.

Older drivers

Each insurer decides how it prices senior drivers, so results vary. If you are older, compare several quotes rather than assuming one insurer’s price is typical.

How Your Car Model Affects Your Premium

The car itself shapes your premium in several ways:

• Sum insured and market value: a more expensive car needs a higher sum insured, and the premium for comprehensive cover rises with it.
• Engine capacity: larger engines generally sit in higher premium bands.
• Repair costs and parts: imported and luxury models often cost more to fix after an accident.
• Theft risk: insurers may consider how likely a car is to be stolen, including where it is usually kept.
• Vehicle age: vehicle age is a rating factor on its own, and older cars also have lower market values.

BJAK’s own quote data shows how much the model matters. In a snapshot dated 1 October 2026, the estimated average quote was about RM651 for a Perodua Axia, RM837 for a Perodua Bezza and RM995 for a Honda City. These are reference figures from BJAK quotes, not guaranteed prices. See the full list in our guide to the average car insurance price by car model.

Age and Model at a Glance

Factor	Usually lowers your premium	Usually raises your premium
Driving experience	Many years of claim-free driving	New licence or P licence
NCD	High NCD, up to 55%	No NCD or NCD lost after a claim
Car value	Lower market value	Higher market value
Engine capacity	Smaller engine	Larger engine
Repair costs	Local model with common parts	Imported or luxury model
Claims history	No recent claims	Several recent claims

How to Calculate Your Car Insurance Premium

Insurers do not publish their full rating formulas, so you cannot reproduce an exact quote at home. You can, however, follow the same order of steps that appears on every quote:

• Basic premium: set by the insurer from your sum insured, car, driver details and risk profile.
• Minus NCD: your NCD percentage is deducted from the basic premium.
• Plus add-ons: optional covers such as windscreen or special perils are added.
• Plus service tax: 8% on the premium after discounts, the rate for taxable general insurance policies since 1 March 2024, as noted by Berjaya Sompo.
• Plus stamp duty: a flat RM10, shown separately in insurers’ premium illustrations.

The NCD scale for private cars is 25% after one claim-free year, 30% after two, 38.33% after three, 45% after four and 55% after five years or more. Our NCD calculation guide explains how it works.

Worked example (illustrative only)

The table below uses made-up figures for the same car to show how experience and NCD change the final amount. Real basic premiums depend on the insurer and your full profile.

Item	New driver, 0% NCD	Experienced driver, 55% NCD
Basic premium	RM1,400.00	RM1,400.00
Less NCD	RM0.00	RM770.00
Add-ons	RM100.00	RM100.00
Premium after NCD and add-ons	RM1,500.00	RM730.00
Service tax (8%)	RM120.00	RM58.40
Stamp duty	RM10.00	RM10.00
Total payable	RM1,630.00	RM798.40

In practice, a younger driver may also see a higher basic premium or an extra excess, so the gap can be wider than this example suggests.

Ways to Lower Your Premium

• Keep a clean claims record to build up your NCD year by year.
• Insure your car at the right value. Our guide to market value in car insurance explains how to choose.
• Name only the drivers who will actually use the car, and declare young drivers honestly.
• Choose add-ons you really need instead of buying every option.
• Compare quotes from several insurers, because each one rates age and model differently.

For more ideas, read how to save up to 25% on your car insurance premium, or get a quick estimate with the BJAK car insurance calculator.

Conclusion

Since motor detariffication, your age, driving experience and car model all feed into what insurers charge. You cannot change your age or swap cars every renewal, but you can protect your NCD, set the right sum insured and compare insurers before you pay.

Ready to see real prices for your car? Compare car insurance quotes on BJAK from multiple insurers and takaful operators in a few minutes.