Vehicle Age Loading is additional loading imposed by insurance companies on your vehicle exceeding certain age.
Thus, driving a old car with lower sum insured may not be cheaper due to this vehicle age loading. Generally, a vehicle more than 4 year old will be subject to 5% loading, and vehicle with age 7 and above will be loaded with extra 10%. Vehicle age above 10 years will be subject to the maximum of 15% by Allianz.
While some other insurance companies may impose vehicle age loading to as high as 30%.
Vehicle age above 15 are usually not be accepted by most insurance companies. You will need to insured with MMIP (Malaysia Motor Insurance Pool), unless you have been renewing your car insurance with the same insurer for many years. In such case, it may still be possible to get your insurance renewed without having to go to MMIP.
Vehicle Age Loading is with the assumption that older vehicle is more likely to get involve in accident due to parts wear and tear as well as general car condition. Thus, if you are buying a used vehicle with more than 10 years and you do not have any NCD (Non Claim Discount), you will have to pay heavily for your car insurance.