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Car insurance - should it affect your purchasing desicion?

02.11.2015

WHEN we purchase a car, we normally have a look at things like the interest rates, deposit, payment terms, financing schemes and other variables, before looking at - what many of us see as a necessary evil - vehicle insurance.

There was recently a very informative piece on www.hippo.co.za which provided information on the most stolen cars in South Africa as well as the cheapest cars to insure. These are two factors that we have to consider when buying a car as insurance can be as much as half of the vehicle’s repayments per month, versus other vehicles, which are a fraction of the price to insure.

Now, logic dictates, that in the pursuit for basic transportation, we purchase a vehicle that is well known, from a reputable brand, which has a proven track record in terms of reliability. There are a few issues with this… the volume sellers in the market place are often technically more basic vehicles, from large manufacturers; these vehicles become popular with criminals because of how common they are and of course  how easy they are to steal and therefore how in-demand the parts are.

Click here to view the most stolen cars. 

As we thought, the more basic vehicles, from manufacturers that produce large volumes such as Nissan, Toyota and Isuzu, are targeted by thieves.

Insurance

We prefer to buy used vehicles locally as we can effectively get more car for our money; this works in the insurance game too. For example, an Autodealer.co.za price comparison for various cars shows that a person wanting to buy a Chevy Spark will pay approximately R104 120; a Ford Figo retails for an average of R141 900 and a Toyota Etios is R130 950. That means, the information provided by Hippo has only made use of used cars to determine which vehicle is cheapest to insure as these used models are realistically what people can afford.

When buying a used car one must consider things such as model year, the newer the car the higher the premium as the more it will cost to replace. You’ll see that the excess is mentioned alongside the premium in these quotes. The problem with excesses is that insurance doesn't normally pay out until the portion of the bill for repairs or replacement, which is the excess, has been paid. So, if the excess amount is purposefully high but the premium per month is low, it means there’s a high chance that you may have hoops to jump through during your insurance claim. That being said, have a look at the guidelines here to follow when buying a car that will cost less to insure. 

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Article written by Sean Nurse
02.11.2015
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