October 24, 2020
Many South Africans love their cars so much that they don’t want to part ways with them after they’ve paid them off. It may make sense to keep their current car to save some money. Alternatively, motorists bought a used car and may need to get car insurance for it.
Owning an old car has its benefits, whether it be for nostalgia or if you are no longer paying it off. There are other benefits too, which could include your car insurance cover.
There are several potential ways to rethink how you insure the old car that could save you money on monthly premiums:
Let’s explore some of your options for more 'everyday' type older cars like a 2010 Volkswagen Polo, not old cars like classic vehicles such as an E-Type Jaguar. Classic cars like your E Type Jaguar are unique when it comes to their car insurance requirements. Classic vehicles are usually 20 years old or older, are well sort after and are worth a significant amount of money.
Cars aren’t always cheap to buy. However, older, used vehicles may be more affordable to buy because vehicles lose their value through depreciation over time.
For example, a particular car may cost less to insure compared to a more expensive vehicle. Why? Car insurance premiums are often proportional to the value of the car. For example, should a 2010 VW Polo be written off, it would cost less for an insurance company to pay out an amount based on the vehicle's value compared to a more valuable 2020 VW Polo.
Financial institutions in South Africa require motorists who are paying off their cars to have comprehensive car insurance. Is your vehicle paid off? You could have the option to change your car insurance cover from comprehensive to third-party car insurance. Perhaps assess your car insurance needs before you find your ideal balance between coverage and what your monthly premium is.
How is your car insurance premium calculated for your older car? It depends on many factors that relate to the vehicle and motorist. The vehicle's value, age and model are possible factors. Other factors that relate to motorists could be their age.
There is a lot of choices available for car insurance products from a larger number of car insurance companies in South Africa. Some insurers have gone the extra mile to provide unique insurance products that go against the norms regarding the various ‘types’ of cover. Perhaps consider third-party car insurance, which comes with a growing cover for accidents and premiums that won’t increase?* How about comprehensive car insurance with premiums that won’t increase and a reduced to zero excess?*
Are you looking to insure your car? Perhaps consider getting affordable car insurance with PMD. T’s and C’s apply.
Please get financial advice from a certified financial adviser before you decide to buy any car insurance product. This article is for informational purposes only.