Should you insure your used vehicle?

Should you insure your used vehicle?

By | 2016-07-28T11:02:20+00:00 1 August 2016|Vehicle finance|

You’ve just signed the deal and are now the proud owner of a pre-loved vehicle. Your car may not be new – but it’s new to you, and you understandably want to take great care of it.

Taking care of your vehicle includes arranging car insurance. After all, what could be worse than suddenly finding yourself without a car if your ‘new’ baby is stolen or damaged in an accident? However, even with the best vehicle finance, monthly car payments are a large expense… and stretching the budget even further to include insurance makes many people think twice about insuring a new car.

Here’s what to consider:

Any car can be stolen or involved in an accident

It doesn’t matter whether your car is new, used, or an old jalopy – accidents happen. And although there are certain car models that pose a higher theft risk, having your car stolen is a real possibility. If your uninsured car is written off or stolen, you will have to pay out of your own pocket. Plus you will still be liable for your monthly car payments even though you no longer actually have a car.

Many vehicle finance companies insist on insurance

When it comes to vehicle finance in South Africa, most service providers make insurance a must. As the true ‘owners’ of the vehicle until you have completely paid your car off, vehicle financers have the most to lose if your car is damaged beyond repair or stolen.

Insurance premiums are generally lower on a pre-owned vehicle

Insurance premiums are worked out on the cost of replacing the vehicle being insured. Because used cars have a lower book value than new cars, your premiums on a used car will be lower. Even if your book value is low… if something happens to your vehicle, and you are insured, a small payout that can help you finance another car is better than nothing at all.

For information on arranging easy vehicle finance in South Africa, contact us today.