The search for cheap car insurance often leaves South African motorists disappointed. While car insurance companies are constantly competing, it is rare to find a policy that is significantly cheaper than similar cover from its competitors. This is where you may be fooled by cheap car insurance. The benefits are often reduced in order to make the premiums cheaper.
You get what you pay for when you opt for cheap car insurance. It is important that you are cautious about signing up for cheaper cover until you investigate the policy terms and conditions. In many cases, cheaper car insurance means that you are buying lesser cover. It may save you money in the short term but compromise your claims at a later stage.
Affordable or Cheap Car Insurance?
Cheap car insurance is relative. What one person considers to be cheap may not be so for another. It is all about the individual affordability. Assess your budget carefully and consider what is affordable for you. If you were wise with your car purchase, you would have opted for a vehicle that does not strain your monthly budget with regards to finance repayments and maintenance. This gives you more leeway to buy better car insurance, which is affordable and offers maximum cover.
New Cars
Unfortunately car insurance for new cars is not cheap. There are various reasons for this but first and foremost is that the car has a higher value. Whether you insure the book value or replacement value, car insurance for new cars is almost always pricey. Remember that your finance company will not allow you to drive the vehicle off the sales floor unless you have comprehensive cover. It is not optional but mandatory.
Comprehensive car insurance is the most expensive cover when compared to third party car insurance. It covers your vehicles as well as other vehicles when the accident is your fault. As part of your finance agreement, you have to maintain comprehensive cover until the vehicle loan is paid off. Cheaper options like third party cover are not acceptable. Furthermore you may need top up cover to pay for a shortfall between the car insurance payout and loan amount.
Young Drivers
Younger drivers under the age of 25 years are considered to be higher risk drivers. This means that an insurance company has to bear more risk and therefore cheap car insurance is difficult to find. Unfortunately as a younger person, you may have a limited budget for comprehensive car insurance. You may be a student or just started your career where you can afford a car but the insurance is just an added financial strain.
Be careful about foregoing car insurance. You need cover and do not think that you will be the one lucky person never to have a car accident. It also should not matter whether you are driving the latest model or an old vintage car. At the very least you should have third party cover so you are not personally liable for accident damage to other vehicles.
For Women
The statistics confirm that women are lower risk drivers and have less accidents. Since gender is considered when calculating risk car insurance for women is naturally cheaper. Some companies even specialise in cheap car insurance just for women. It is therefore worthwhile that female drivers look at these options before signing up for cover. As a female driver you should take advantage of this saving on car insurance, although the saving may not be as significant for under 25’s.
Where to get cheap car insurance?
Rather than looking for cheap car insurance cover, investigate ways to save on your car insurance. Start with your current insurer and discuss ways to reduce premiums while maintaining the required cover. Do not be mislead about cheaper cover in ads and sales pitches. Read the fine print. You may find that cover being marketed as cheap car insurance is often inferior cover with lesser benefits. However, shopping around can help you find less expensive cover than is just as extensive.
Go back to the basics with your car insurance policy. There are many factors to consider when choosing car insurance and you may have not been as attentive at the outset. As a result, you may now have more expensive and extensive cover than you actually need. For example, you may be paying for cover with a higher value than your car is currently worth. Remember that your insurer will either pay the book value or replacement value but not necessarily the insured value. This is one way you could save money.