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Automatic vs manual car insurance: Effect on the premium cost

Team AckoMay 23, 2022

When shopping for a car, one of the primary features to consider is whether it is equipped with an automatic or manual gearbox. While some drivers prefer a manual car, automatic cars are becoming more popular, especially in urban areas, due to their convenience. But no matter what type of car you drive, you must insure your vehicle for financial protection against damages to the vehicle and third-party liabilities.

With different types of cars offered under both automatic and manual categories, it is worth knowing how choosing one or the other will affect your car insurance premium. In this article, learn about automatic vs manual car insurance and how it impacts the premium cost.

Automatic Vs Manual Car Insurance

Manual vs automatic insurance: How does car gearbox type affect car insurance?

Before you understand the effect of insurance cost on manual and automatic cars, let’s know the difference between manual and automatic gearbox.

Manual gearbox cars

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 manual gearbox makes for a more engaging driving experience.

Automatic gearbox cars

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.

Difference between manual and automatic cars

Suppose you plan to buy a car and are wondering whether you should opt for the manual or the automatic model. In that case, you need to understand the difference between manual and automatic transmission or gearbox before making the decision. Several factors differentiate the two types of gearbox in cars. It can be the pricing, mileage, maintenance costs, etc.

Impact of the manual and automatic gearbox on car insurance price

Motor insurance cost for cars is determined based on several important factors. It includes 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. 

Hence, the car insurance premium is slightly higher for an automatic car. However, the difference in cost is marginal and not substantial.

Factors affecting car insurance

As mentioned earlier, 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: The insurance cost for a luxury car is undoubtedly higher than a regular car. The vehicle manufacturer, engine cubic capacity, vehicle type, etc., 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: Apart from 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 are higher in metros than in tier 3 cities.

  • Deductible: There are two types of car insurance deductibles. They are Compulsory and Voluntary deductibles. Both means you must pay a portion of the claim amount.

Frequently asked questions

Here are some common questions about car insurance for automatic and manual cars.

Is it cheaper to insure a manual or an automatic car?

As mentioned before, the insurance or the premium cost depends on various factors of the vehicle. Usually, the price of the automatic variant compared to the manual variant of the car is higher. Hence, the cost of insurance for the automatic variant is higher.

What are the other ways to save on car insurance?

Other ways to reduce the car insurance premium are by opting for a digital insurance company such as ACKO offering direct-to-customer car insurance plans, looking out for discounts on special occasions and festivals, installing an anti-theft device to secure your car, etc. 

Which car is best for metro cities?

Because one needs to constantly shift gears manually while driving on urban roads, an automatic car could be a preferred choice. However, it may differ depending on someone’s tastes.

Does a driving licence affect car insurance price?

No. The Driving Licence (DL) does not affect the cost of the car insurance. However, it is mandatory to drive a car on public roads with a valid driving licence. It is also essential to hold a valid DL to avoid the rejection of car insurance claims.

Why is online car insurance cheaper?

Insurers such as ACKO offer insurance plans via the direct-to-customer model. Since no agents and no commission are involved, the savings are passed on via low-cost car insurance plans.

Why is an automatic car more expensive to insure?

The maintenance or the repair cost of an automatic gearbox is expensive compared to the manual transmission. Hence, the insurance cost for an automatic variant is higher than a manual variant of the same model.

Is the insurance cost for a used or a second-hand automatic car cheaper?

The insurance cost for a second-hand automatic or manual car is based on factors that impact first-hand or a new car insurance price. Hence, the insurance cost for a used car is lower compared to a new vehicle, the cost of insurance for a used automatic car is higher compared to the manual car.

Does a car’s gearbox type affect your car insurance?

If two cars are of the same type, but the only difference is the gearbox, then the cost of the vehicle differs. Typically, the automatic version is expensive compared to the manual version. The manual gearbox’s price is lower than that of the automatic transmission since the latter is a piece of complex machinery compared to the former. 

Additionally, the automatic transmission’s repair and replacement costs or maintenance are higher. Therefore, the insurance premium cost for automatic cars is slightly higher than manual cars. When shopping or deciding between the two gearbox types, ensure you understand your requirements to make an informed decision.

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