Get the Latest Tips on How to Save on Car Insurance
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Buying a car is already a heavy financial commitment for most people, and ensuring your ride is properly covered does not always come cheap. Finding an insurance policy that aligns with your budget yet still takes care of all your vehicle needs can be confusing, as you may choose the lowest premiums without always knowing what this entails.
Find out what risk factors are used to determine your premium
Get tips on how to lower your insurance premiums
Discover a modern-day insurance policy for those who work from home
Unpack Cartrack solutions that will work in your favour to give you car insurance savings
The foundations of how to save on car insurance
Let’s start by answering a few Insurance 101 questions so you know how it works and don’t get confused along the way:
Is insurance mandatory?
Car insurance is not a legal requirement in South Africa, but when a vehicle is purchased through a loan from a financial institution such as a bank, then they will require you to have one because they will use the vehicle as collateral if the loan is not paid.
The importance of car insurance
The Automobile Association (AA) revealed that less than 35% of vehicles in the country are insured, meaning roughly 65% of South African motorists are not registered for vehicle insurance. The fact that most people do not have car insurance means if someone bumps into their car, they probably won’t be able to pay for the damage, meaning you’ll have to cough up money for something that was not your fault.
Car insurance can help give you financial protection in the event of an accident, a fire, if your car gets stolen, or when you need roadside assistance. For example, if you are responsible for the accident, you will be liable for the costs of repairing your vehicle and the other person’s vehicle. The list of possible expenses does not just end at repairs. It can include medical bills, legal fees, and property damage. If you own a vehicle that is not insured, you will have to pay a lump sum for things you didn’t plan. This is why it is important to have car insurance.
Latest Tips on lowering your car insurance premiums
Now let’s get into how you can get them to cut you some slack:
Improve your driving skills Inexperienced drivers are more of a risk. Take an accredited defensive driving course if you can. Although these courses are a bit on the pricier side, you’ll probably be paying car insurance your whole life for every car you’ll ever own, so improving your driving skills will reduce the risks of accidents, meaning you’ll have a clear record, helping you lower your premiums.
Compare quotes First, do your research and determine the type of insurance that best suits you and your budget, then shop around. Prices differ, and sometimes, you may even come across limited-time deals. Get at least three different quotes from different insurance companies, and ask some friends and relatives for recommendations based on their experience. Do everything you can to make sure you know exactly what you’re getting yourself into.
Buy a car with lower insurance premiums If possible, compare the insurance premiums before you buy the car. Vehicles that are cheaper to repair tend to have lower insurance premiums, so consider the cost of repairs and replacements when choosing which car to buy. Insurers are also more likely to offer lower premiums if the vehicle make and model you’re looking to purchase is known to be safer or less of a risk. Top tip: Once you already have the vehicle, compare prices again every year or two, just in case there’s a lower rate available for you plus, you’ll keep the insurance companies on their toes.
Choose a higher voluntary excess Go.Compare revealed in an article that less than half (47%) of people fully understand what excess is and didn’t realise they have to pay it as part of the claim. Excess is the amount of money you agree to pay out of your own pocket when you make a claim—the more excess, the smaller your premium. Once you increase the excess, you take more risk away from the insurance provider. This is an excellent option for experienced drivers with a clean driving history. However, you need to have funds readily available as there will be a higher once-off expense that you will pay out of your own pocket if you need to claim.
Maintaining an uninterrupted insurance history Cancelling your insurance will cause gaps in your coverage history. This is also likely to raise your premiums because insurers will lose trust in you as a customer.
Bundle your policies Putting your home, car and all other policies under one cover might give you multiple-policy discounts that could save you up to 5% a year. If you have more than one vehicle, say a car and a motorbike or a boat, depending on your insurance provider, you could save up to 10% or more on your premium by bundling them up.
Maintain a good credit record A good credit record shows that you are financially responsible and can, therefore, be trusted by insurers, which can lead to lower premiums.
Keep your mileage low We’re not saying don’t go anywhere because the whole purpose of having a car is to move around with it, but just know that the more you are on the road, the higher the chances of you being involved in an accident, and the more your insurer will charge. So, by reducing your road travel time, you can get lower premiums. A higher mileage also indicates more vehicle wear and tear, decreasing the resale value.
Choose a secure parking Where you park your car during the day and at night is also essential. You will pay more if it is not in a safe area or inside a locked garage. So when looking for a place to stay, consider the parking and how it will save you from paying more.
Avoid claims due to negligence According to Prime South Africa, some of the most common insurance claims are for crashes at an intersection, rear-end accidents, unroadworthy vehicles, pothole damage, vehicle theft, and accidents due to bad weather. These can happen to anyone, but there are ways to avoid them. Always double-check for cars entering the intersection even if you have the right of way, and keep a safe following distance of at least three seconds from the vehicle in front of you, stay on the lookout for potholes and poorly maintained roads, check weather conditions ahead of time so you can avoid flooded or other dangerous areas, and lastly, install additional security features that will help prevent your car from being stolen or make it easier to recover. Check out our next section on the importance of vehicle security.
Prioritise vehicle security If not pre-installed, consider getting anti-car theft devices such as an alarm and, most importantly, get a GPS tracking unit. It’s no secret that vehicle theft numbers in South Africa are high, so if you want to be less of a risk to the insurer, then a vehicle tracking device such as Cartrack’s is your best bet. It increases the chances of your car being found if stolen and reduces the chances of theft. Some insurance companies will not cover you for theft if you don't have a vehicle tracking unit.
A deeper understanding of how insurance works
There are still some details about car insurance that can help you make an informed choice, so let’s take another deep dive into the inner workings of car insurance, how it is calculated, and the types of insurance available:
How car insurance is calculated
Insurance is based on your risk profile, which assesses how likely you are to experience a loss. It includes things like your age. The higher the risk, the higher the premium. It is done through a process called underwriting, where your risk profile is used to determine how much you’ll pay each month.
What is a risk profile?
Many things can be included in your risk profile; here are a few common ones:
Type of vehicle: The make, model and year of the car you drive also help determine how much you should pay. High-risk cars, such as high-performance sports cars, popular brands for car thieves, and high-end luxury vehicles, will cost more to cover.
Driving history: Insurers check the number of claims you’ve filed before and whether or not you’re a new driver who’s never had insurance. Multiple claims or no record at all will equate to a high premium.
Credit history: A poor credit score means you might have problems making payments, so the insurer might charge you more for being a high-risk borrower.
Driver’s licence: Much like your age and driving history, how long you’ve had your driver's license and the license code you did also count. New drivers are more likely to make mistakes along the way and claim, making them a high risk. If your license is new, you are probably an inexperienced driver who has perhaps never had car insurance before and, therefore, has no record of your driving history, making you a high-risk driver. Additionally, drivers with a Code 10 license are more likely to be charged higher premiums than Code 8 drivers because a Code 8-yard test is more thorough.
The three main insurance types
Third-Party Only Third-party insurance is the most basic and tends to be the least expensive insurance option. It covers accident damage caused by you, as the driver, to another person's property. It includes the costs of injury or death to the third-party passengers or individuals involved in the accident you caused. For example, if you bumped someone’s car and the person in the car ended up in the hospital, the insurance will pay for the damage to the car, the hospital bills and anything else of theirs that was damaged in the accident, such as a cellphone or laptop. Or, let’s say you drive into someone’s wall; insurance will take care of that, too. This kind of insurance works best if you have an older car that has been paid off and is affordable to repair, and you don’t want to take out loans to cover the cost of accidents.
Third-Party Fire and Theft This option offers the same type of coverage you’ll get from a standard third-party insurance policy but with added protection against fire and theft. It will cover the costs of damaging someone else's property and the costs of replacing your vehicle if it ever gets stolen or caught in a fire.
Comprehensive cover As the name suggests, this type of car insurance covers your car against accidents, fires, theft, claims from a third party, and nearly all other incidents that could occur, such as natural disasters, a break-in, vandalism, certain parts of the car being stolen, broken windshields, objects falling on to your car—the list goes on.
Additional car insurance information that you might not know about
There are other car insurance options or services you can add to your cover. Here are a few that might not be so obvious to many:
Gap cover
As we all know, cars depreciate the moment they leave the dealership. Insurance policies cover the car's depreciated value, meaning the car's current market value at the time of the claim. However, if you buy a vehicle on finance and only put down a small deposit, the loan amount might exceed the vehicle’s market value in the early years of purchase. So, in the event of a bad accident where your car gets written off, gap insurance can help cover the difference between the market value your insurance will pay off and the amount you owe to your financial provider.
Have you heard of usage-based insurance?
This is still a relatively new concept, and vehicle owners now have a choice of being charged based on accurate daily mileage readings. For this to happen, vehicle owners need to already have a telematics device installed in their cars so the data collected can be used to calculate their premiums. The data collected also includes a report of your driving habits, such as speeding and braking patterns, sharp turns, and harsh acceleration. This type of car insurance can benefit the modern-day work-from-home crew as they don’t frequently use their vehicles and will get more accurate pricing or safe drivers who believe they should be discounted for their good driving habits. For now, only a few companies offer this type of insurance.
What about electronic vehicle insurance?
Insurance for electric vehicles or EVs is not so different from traditional car insurance. The only thing is that comprehensive coverage tends to cost more. This is because:
The concept and prevalence of electric vehicles are still new in South Africa, but once insurers get more exposure to their technology and repair costs, they’ll be able to better assess the risk and set fair premiums.
These vehicles can only be fixed by specially trained mechanics with the right tools, so insurance companies will most likely charge higher prices because of this.
The roadside assistance required for an EV is very specific. For example, if your car runs out of battery, the insurance will need to tow it to the nearest charging station, unlike a petrol car, which would need to be taken to any fuel station for a quick refill. This then makes the cost of covering an EV slightly higher than a “normal” vehicle.
Let Cartrack’s solutions help you lower your car insurance premiums
This is how we help you make premium savings:
Cartrack Insurance Agency Let our insurance team shop for you so you won’t have to go through the hassle. The Cartrack Insurance Agency quickly narrows down the search to get your vehicle covered with a reputable insurance company that will work best for you.
Stolen Vehicle Recovery Our GPS tracking unit gives you the exact location of your vehicle at all times, which will help you keep your eye on it, and it will help reduce your insurance premiums because our skilled air and ground teams are always on standby waiting for your call in the case of the unfortunate happening. This device also provides you with reports on driving behaviour, which you can check out to see what driving habits you need to improve and show the insurer that you’re a good driver who deserves to pay less premiums.
Cross-border SVR Our advanced tracking unit supports international roaming, so if your car gets stolen and somehow goes over one of our bordering countries, do not worry; Cartrack will still be able to locate your vehicle. You can rest assured knowing that we’ve got eyes and ears everywhere.
Protector We offer this value-added service to ensure the safety of you, your family and your car. You’ll have access to 24-hour roadside assistance, emergency medical assistance, and legal advice at the touch of a button.
CarWatch Get a virtual card guard to alert you whenever your parked car moves without your permission. All you have to do is switch on the Carwatch feature, which can be accessed on our mobile phone app, and we’ll notify you of any suspicious movements while you're busy running your errands.
Road Vision This is a road-facing dashcam equipped with GPS tracking technology. It can enhance your safety, document accidents, prevent theft, and give you footage with live location as well as risk reports of your driving habits. You can also use this camera solution to prove your innocence in an accident so you don’t end up being the one paying.
Limited Recovery Warranty* In the unlikely event that your vehicle is not found, Cartrack has a limited recovery warranty, which allows you to claim up to R150 000 cash-back. Ts&Cs apply*
GPS tracking — the one thing that will greatly impact your insurance premium
Cartrack is a reputable vehicle tracking company with a recovery rate of over 90% and advanced vehicle tracking solutions like no other. Your insurer will be delighted to know that you’re with us, and your pocket will be saved. Join Cartrack Kenya today!
Get to know why they are making your pay more for your car insurance and see how you can take the price down.
