First time car buyer? Here's some insurance tips

Whether you are shopping around for a new car or you already have a car, one of the most important aspects you face as an owner is insurance. If your vehicle gets broken into, hijacked, stolen, or damaged in an accident, the unexpected costs for repairs or replacement can be extremely high. Insurance is there to have your back.

In some countries, the law does not require drivers to have insurance when they buy a car. However, if your car is under finance in South Africa, you must have full comprehensive car insurance.

“Any vehicle financed through Ford Credit must be insured,” explains Gerald Hong, Brand, Marketing and Sales Manager for Ford Credit South Africa. “Ford Credit can facilitate comprehensive insurance that covers your vehicle in full, as well as any damage to the property of a third party.”

Whether your car is under finance or paid, insurance is an important consideration. Taking out an insurance policy is a significant additional expense and there are many options to choose.

“Aside from shopping for the most cost effective insurance, it is important to understand exactly what your insurance covers,” says Hong. “Vehicle insurance is not a one-size-fits-all product and you need to make sure you get the right cover.”

When purchasing a policy for your new car, it is important to understand exactly what the policy covers. Ford customers that finance their vehicles through Ford Credit can opt for comprehensive insurance for their vehicles that includes:

When purchasing a policy for your new car, it is important to understand exactly what the policy covers.

How much does it cost?

Insurance companies determine individual premiums based on a number of factors. The two biggest factors involve you and your vehicle. Essentially, the insurer will consider your risk profile and the value of your vehicle – the higher the cost of repair or replacement, the higher the premium.

“Sports cars are generally more expensive to insure, and young drivers often pay higher monthly premiums than older, more experienced drivers with an established safety record,” explains Hong.

Insurers will look at the type and price of your vehicle, your personal information, your age, your driving history and your previous insurance record, if there is one. Your monthly premium is based on all this information.

However, paying your premium each month does not mean that you won’t need to pay anything in the event of a loss. You still need to pay for the excess or insurance deductibles. The excess is a fixed amount you are responsible for before the insurance reimbursement kicks in.

A higher excess means lower premiums, and vice versa. The more you pay up front, the less you will have to pay for any damages later. You can chose to pay the minimum premium possible, but further down the road it could cost you a lot more.

“Shop around and get to grips with the detail of different insurance policies,” says Hong. “If you regularly park your car on the street or outside office buildings, make sure you are covered for all types of theft. Policies differ and some will cover smash-and-grab while others will not. So decide what your risk areas are and shop for an insurance policy that best suits your needs.

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Papi Mabele

Papi Mabele has a marketing background, he is a digital marketing expert with extensive experience in launching and building global brands in the emerging markets. Papi is also an avid tech writer, enthusiast and all round tech junkie. As a freelance writer and analyst he has been numerously published in Popular Mechanics (SA), GQ South Africa, Premier Magazine, Driven Magazine, Bloem News, Courant, The Weekly, Enthooze Magazine and PiE magazine amongst others.