Manual vs automatic: How your car’s transmission affects insurance premiums

A comprehensive motor insurance policy is a way to safeguard your vehicle. It protects policyholders against both Own Damages (OD) as well as third-party (TP) damages. An OD policy comes with multiple add-on options that can be opted out of based on individual needs.

The different add-ons available that one can look into are Zero Depreciation Cover, Return to Invoice Cover, Engine and Gearbox Protection Cover, Pay as You Drive Cover, and if you own an EV, then look at an EV Shield Add-On Cover.

Mayur Kacholiya, Head–Motor Product at Digit General Insurance, said, "Insurance premium-wise, in general, the discounts or add-on rates offered to manual vs automatic cars are similar. Automatic cars tend to be marginally expensive vis-à-vis equivalent manual transmission cars, and to that extent may have higher Insured Declared Value (IDV) and hence, higher landing premium."

There can be differences in insurance premiums between manual and automatic cars, but they are usually minor and depend on several factors:

1. Cost of repairs: Automatic cars often have more complex transmissions, making repairs more expensive. This can lead to slightly higher premiums. Manual cars are cheaper to repair, which may result in lower premiums.

2. Car value: Automatics usually cost more upfront, which increases their IDV, a key factor in premium calculation. Higher IDV is equal to a higher premium. The IDV represents the maximum sum that the insurance company will pay in the event of total loss or irreparable damage.

3. Driver risk profile: In some regions, insurers may assume manual car drivers are more experienced, while automatic cars are preferred by younger or newer drivers, who might be seen as riskier.

4. Driving habits: In urban areas with lots of traffic, automatics are common. If statistics show more claims involving automatics, this could reflect in premiums.

"It is important to note certain common exclusions within insurance policies. Damage arising as a consequential effect or due to contributory negligence is generally not covered. Therefore, a thorough review of the policy documentation is advisable to fully understand the scope of coverage and the applicable exclusions," said Kacholiya.