How to Transfer Your NCD When Buying a New Car in Malaysia

Buying a new car in Malaysia? Before you collect the keys, one financial decision affects both your new vehicle and the one you’re leaving behind: the NCD transfer.

Your NCD Is a Financial Asset

The No Claim Discount (NCD) rewards you for every claim-free year you drive. The NCD schedule for private cars accumulates as follows:

At the maximum No Claim Discount (NCD), eligible car owners/policyholders enjoy a 55% reduction on their base motor insurance premium. This means that maintaining a claim-free driving record can result in substantial premium savings over time. The accumulated NCD can also be transferred to a new vehicle, allowing policyholders to continue benefiting from the discount when purchasing another car, subject to the applicable terms and conditions.  

For more information on the factors that influence motor insurance premiums, readers may refer to PIAM’s guide on the eight factors that influence your motor insurance premium. 

How to Transfer Your NCD to a New Car

When you purchase a new car, your accumulated No Claim Discount (NCD) can be transferred from your existing car, making it an effective way to reduce the cost of insuring a higher-value car. 

The transfer is not automatic. Inform your insurer that you wish to withdraw the NCD from your old vehicle. Once the withdrawal has been processed, including payment of any additional premium for the remaining period of coverage on the old vehicle (if you still own and continue to insure it), your insurer will update the NCD status in the centralised NCD database system and issue an NCD withdrawal confirmation letter. The NCD may then be transferred and applied to your new vehicle. Submit the NCD withdrawal confirmation letter at the point of purchasing the new policy to request utilisation of the NCD for the new c continue to own the vehicle and maintain the policy, you will be required to pay the additional premium arising from the removal of the NCD for the remaining policy per ar. The exact premium saving depends on your new car’s insured value, the coverage type you choose and which insurer you go with. Review the quotation and confirm the coverage and the applicable NCD before purchasing the policy. 

What Your Old Car Loses When You Transfer the NCD

In summary, once you withdraw the NCD from your old vehicle, the NCD on that policy will revert to 0%. If you iod. 

However, if you have sold the vehicle, you may cancel the policy and request the insurer to process the cancellation as an NCD withdrawal. The insurer will then issue an NCD withdrawal confirmation letter or form, which can be used to transfer the NCD to your new vehicle. As the policy has been cancelled, no additional premium is payable on the old policy. 

Add-Ons to Check for Both Vehicles After the Transfer

Once you have sorted the base coverage for both cars, review the add-ons. These extensions determine whether your policy covers the situations you are most likely to face.

• Special Perils: covers flood, landslide, and other natural disasters, which are typically excluded under standard comprehensive motor insurance policies. Flood-related repair costs for vehicles in Malaysia can be significant, often exceeding RM5,000 depending on the make, model, and severity of the damage. In severe cases particularly when a vehicle is fully submerged, the damage may result in a “Beyond Economic Repair” (BER) situation, where the cost of repairs exceeds the vehicle’s market value or its insured sum, leading the insurer to declare it as a BER vehicle. If a car is parked or driven in a flood-prone area, this is the gap that carries the highest financial consequence. For guidance on flood risk and vehicle protection, you may refer to PIAM’s article on avoiding flood damage to your vehicle.
• Windscreen cover: a cracked windscreen is one of the most common repair needs on Malaysian roads. Without this add-on, fixing it means paying out of pocket or making a claim against your main comprehensive motor insurance policy that resets your NCD. The add-on may cost less than the NCD amount you would lose.
• Accessories cover: under standard tariff motor insurance policies in Malaysia, coverage typically applies only to factory-standard specifications. Aftermarket modifications and non-factory fitted accessories are generally not automatically covered, unless they are specifically declared to and accepted by the insurer, included as “accessories” with an agreed insured value and endorsed in the policy (with additional premium).
• Coverage while under repair: Some motor insurance policies continue to provide protection while the vehicle is undergoing repairs at an authorised workshop. Policyholders should review the terms carefully, as coverage during the repair period may vary between insurers.

For a full list of available add-ons, refer to PIAM’s guide to essential motor services.

One More Add-On Worth Knowing: NCD Relief

Even the cleanest driving record offers no protection against a claims incident that is not your fault. In situations where fault cannot be established by the government authorities i.e. PDRM,; and you need to claim from your own insurer under Own Damage claim, your NCD resets to zero at renewal.

For more on how NCD works, you may refer to PIAM’s article A Handy Buffer in Road Mishaps or directly to the insurers offering this add-on cover.

Before You Drive Away, Confirm Both Policies

The moment your new car leaves the showroom, your responsibility on the road increases. If you're keeping both your old and new vehicles, make sure each has adequate insurance coverage.

Each requires a deliberate insurance decision rather than relying on default arrangements. With two vehicles’ protection to consider, it is important to make deliberate coverage decisions for each rather than relying on default policy arrangements.

Next, review the add-ons for both vehicles based on your actual risk exposure and requirements. This includes assessing whether optional benefits (such as windscreen, flood cover, or NCD-related protection) are necessary for each policy.

A coverage gap identified after a claim cannot be rectified retrospectively. It is therefore important to review both policies carefully before the vehicle is put to use.

Frequently Asked Questions

Can I transfer my NCD to someone else’s car?

No. NCD is tied to the named policyholder. It can only move to a new vehicle registered under the same policyholder’s name

Does transferring my NCD reset my discount level?

Yes. Your NCD percentage carries over to the new vehicle. Your old car’s NCD will reset to 0% and will accumulate in next few years if no claims are made against your policy.

Does a windscreen claim affect my NCD?

A claim made under a windscreen add-on does not affect your NCD. A windscreen repair claimed under your main comprehensive motor insurance policy without the add-on will reset your NCD to 0% at renewal.