KUALA LUMPUR: The decision by Bank Negara to allow owners of cars of more than 10 years to insure their vehicles with all insurance companies at normal rates was welcomed by the Malaysian Automotive Association (MAA).
Previously, old cars were only covered by the Malaysian Motor Insurance Pool (MMIP) which charged higher premiums.
MAA president Datuk Aishah Ahmad said owners of older cars had been raising this issue for a long time.
"They say their car is in good condition, but they still have to pay so much just to have their vehicles on the road."
MMIP is an insurance pool that is run collectively by several insurance companies under the orders of the regulators.
Old car owners have for years argued that their vehicles were not dangerous because of frequent servicing and checks on brakes and tyres. They claimed that they should not be penalised for driving old cars.
This prompted Bank Negara to allow owners of old cars to insure their cars at normal rates while those with cars that have been rejected by insurance companies because of the high risk involved will undergo road worthiness checks at Puspakom.
It is learnt that 100,000 cars out of 300,000 vehicles are categorised as high risk.
An industry source said old car owners had been paying up to three times the normal insurance rates for years.
"If the normal rate is RM70 to RM80, these people pay RM250 to RM300. The new move will finally end the arm-twisting method used by insurance companies."
The source said it was unfair to charge exorbitantly as not all old cars were dangerous on the road.
Malaysians Institute of Road Safety director-general Professor Dr Ahmad Farhan Sadullah said: "While we do not want old cars on the road because of the older technology used, the move will see high-risk cars being checked every year."
He said the high-risk cars might pass the Puspakom test for tyres and brakes and other safety aspects.
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