3 Things Which Help Reduce Your Monthly Insurance Premiums
Car insurance is an investment that provides peace-of-mind in the event of accidental damage or loss to your vehicle; however, it can be pricey.
Car insurance is an investment that provides peace-of-mind in the event of accidental damage or loss to your vehicle; however, it can be pricey.
It’s all very well to find a car that you both like and can afford, but you also need to understand all the financial jargon that comes with making the purchase.
There is no shame in admitting you don’t know about the warranty, total cost of ownership or service plan. While all these terms can be intimidating the first-time round, asking questions will ensure you become vehicle finance savvy.
Here’s the second installment of our 2-part guide to understanding vehicle finance jargon which will help you make the right choices:
“There isn’t a one-size-fits-all solution to structuring a car finance deal. By being totally honest with yourself and knowing how much you can realistically afford on the vehicle repayment, you are on the best-informed path to owning a car. As a responsible lender, WesBank will only provide credit for an amount that you can afford to pay back.”
– Kutlwano Mogatusi, WesBank Motor’s Communication Specialist
“Now that you understand the jargon and consider yourself to be vehicle finance savvy, all that’s left is to check the vehicle finance agreement, including the small print, and sign on the dotted line – but, only once you’re satisfied with all the terms and conditions. Then, you are ready to safely take to the open road in your very own car,” says Mogatusi.
Motor vehicle insurance has been described as a necessary evil – but necessary it is!
There are just over 11 million registered vehicles in South Africa (excluding caravans and trailers). According to statistics, the majority of these vehicles – around 60-70% are uninsured. This means that to keep you on the road, insurance is not a luxury, but a necessity.
Motorists who are opt to have insurance, often choose insurance products based on the lowest available premiums, rather than from a point of understanding the benefits and disadvantages of the products they are consider buying.
Granted, it is sometimes difficult to find insurance which matches your pocket, and which gives you the cover you need or want. For this reason, it is necessary for motorists to read their policies carefully, so as to understand all the aspects of the insurance they are planning on taking. Too often, low premiums sound good but fall short when claims are made.
A good example is an excess fee which may be payable when a claim is made. An excess is a fee you pay towards a claim for loss or damage to your car, regardless of who is to blame.
A company offering a low monthly premium, for instance, may require a substantial excess in the case of loss or damage. When this happens some people are shocked to discover that the costs of repair to a vehicle may be carried entirely, or in part, through the excess fee, with little or no money being paid-out by the insurer. In this case lower monthly premiums, will not count for much as the motorist still has to pay a big portion of the costs out of their own pocket.
Equally important, is an understanding of the terminology of used in insurance contracts. Motorists must ask for clarification of any unclear clauses before committing to a specific insurance policy.
Critical questions to ask when considering insurance are:
Consumer education is vitally important for motorists. It is not enough to merely rely on one’s countless years of driving experience, vehicle safety features or lucky charms. By virtue of being on the road you are at great physical, mental and financial rise if you drive an uninsured car.