If you’ve been driving without making any insurance claims for several years, you’re sitting on a discount worth real money. At 55% NCD, a car with a RM2,000 base premium costs you RM900 instead. That’s RM1,100 saved every single year, just for driving carefully.
The problem is that a lot of Malaysians let that discount disappear when they sell their old car or buy a new one, simply because they didn’t know it could be transferred or didn’t do it in time.
Here’s everything you need to know to keep your NCD intact.
What Is NCD and How Does It Build Up?
NCD stands for No Claim Discount. It’s a reward from your insurer for not making any claims against your car insurance policy during the year. NCD is applied every time you renew your motor insurance, so the longer you go without claiming against your motor insurance, the more you save on your premium.
The rates are set by Persatuan Insurans Am Malaysia (PIAM) and apply across all licensed insurers in the country. For private cars, the schedule looks like this:
After your first claim-free renewal year: 25%. After the second: 30%. After the third: 38.33%. After the fourth: 45%. After the fifth and every year beyond that: 55%.
You can enjoy this discount for the rest of your life, as long as there are no claims against your policy.
The Key Rule Most People Miss
Your NCD belongs to you as the policyholder, not to your car. This is the most important thing to understand. When you sell your car, the NCD doesn’t stay with the vehicle. It stays with you.
This means you can carry it forward to a new car. But there are conditions.
If you own multiple private cars, you can have multiple NCD. If you sell your old vehicle and decide to purchase a new one, the NCD from the old vehicle can be transferred to the new vehicle.
The transfer must be between vehicles registered under the same NRIC. You cannot transfer your NCD to a family member, a friend, or a company. NCD is tied to the person. It cannot be transferred to other people.
Why You Should Always Transfer to the New Car, Not Keep It on the Old One
A lot of people assume it’s smarter to keep the NCD on their existing car because it’s already set up. In most cases, that’s the wrong move.
This is a recommended tip because typically you are paying a higher premium for new cars due to higher vehicle insured value. Transferring NCD from the old car to the new car would be a smart thing to do because you will get a higher monetary discount than keeping NCD with the old car.
If your NCD is 55% and your new car’s base premium is RM3,000, applying that discount saves you RM1,650. On a cheaper old car with a RM1,000 base premium, the same 55% only saves you RM550. The discount percentage stays the same. But the actual ringgit value is much higher on the more expensive vehicle.
How the Transfer Actually Works
The process is straightforward. Here’s what to do:
First, check your current NCD status. You can do this through JPJ’s MyCarInfo portal using your NRIC and vehicle plate number. The NCD can only be transferred if the existing policy has been active for at least 12 months and no claims have been made.
Second, contact your new insurer when purchasing insurance for your new vehicle. Inform them that you want to transfer your NCD from your old car. Provide the registration number of the old vehicle and they will handle the verification.
Third, settle any outstanding premium adjustments. Once the NCD has been transferred, your old car will no longer have an NCD, so the insurance premium balance will need to be paid off. Similarly, if you already paid the full insurance premium on your new car before transferring the NCD, you will get a refund equal to the NCD.
You don’t need to wait for your old policy to expire before doing the transfer. It can be done at any point once the conditions are met.
What Happens After the Transfer
Your new car gets your full NCD percentage immediately. Your old car resets to 0%. If no claims are made against it, it will have 25% NCD in the next insurance renewal.
If you have already sold the car before initiating the transfer, don’t panic. If you have already sold your car, you can still transfer your NCD from your old car to your new car. The NCD is tied to you, not the vehicle, so it remains valid even after the old car changes hands.
The Time Limit You Cannot Ignore
This is where people lose their NCD without realising it. Your NCD is tied to you as the car owner, not the car. If you sell your car and buy a new one, you can transfer your NCD to the new car. But if your NCD is not used within 12 months, it expires.
So if you sell your car in January 2025 and don’t buy a new one until March 2026, your NCD is gone. You start from zero. Transfer it to a new vehicle as soon as you purchase one. Don’t leave it sitting unused.
What Resets Your NCD to Zero
Understanding this helps you make smarter decisions about when to file a claim and when to pay out of pocket.
You could drive carefully but still lose NCD if you file claims for scratches or dents. You could also have minor accidents but pay for repairs yourself without claiming, and your NCD continues to grow.
For small repairs, the maths often favours paying out of pocket. For a minor accident causing RM1,200 in damage when you’re at maximum NCD, claiming through insurance could cost you the repair plus RM1,100 or more on next year’s premium. Higher premiums continue for several years as you gradually rebuild your NCD. Because of this, many drivers choose to pay for small repairs out of pocket to preserve their discount and keep long-term insurance costs lower.
There are situations where a claim won’t affect your NCD. If someone hits you and their insurance pays for your repairs through a third-party claim, your NCD stays intact. You can also make an Own Damage Knock-for-Knock (ODKFK) claim with your own insurer if the other party is clearly at fault and this is verified by a police report. This allows you to repair your car using your own insurance without losing your NCD.
One more thing worth knowing: if you add named drivers to your policy and they are involved in an accident that results in a claim, your NCD will reset to 0% even if you were not driving at the time. Be careful about who you add as a named driver, especially if they are less experienced on the road.
Switching Insurers Doesn’t Affect Your NCD
A common misconception is that moving from one insurer to another resets your discount. It doesn’t. Switching insurers doesn’t affect your discount either, as companies verify your NCD through their systems. Your NCD is recognised across all licensed insurers in Malaysia. You’re free to compare and switch providers at every renewal without losing anything you’ve built up.
Final Thought
Your NCD is one of the most financially valuable parts of your car insurance. It belongs to you, not your car. You can transfer it when you buy a new vehicle, but only if both cars are under your own NRIC and you act within 12 months of your old policy lapsing.
Check your NCD status before buying a new car. Tell your new insurer about the transfer upfront. And think twice before filing a claim for minor damage because the long-term cost of losing your NCD almost always outweighs the short-term convenience of claiming.