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File Image: IOL

Park any doubts: Insurance cover tips for second-hand cars

By Opinion Time of article published Mar 11, 2021

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By Bertus Visser

In recent months, second-hand car purchases have accelerated as the economic impact of Covid-19 and lockdowns have been felt and travel needs have changed. For some, second-hand cars are an attractive option, but they come with insurance considerations too.

Before you buy

There are various options when it comes to purchasing second-hand cars, including being able to check if a car has been in an accident. Make sure you buy from a reputable dealer, and be extra cautious when buying a vehicle online. Unfortunately, fraud is a reality. When buying from a dealer, you may be able to request an e-Natis document to determine if the car was stolen. Whichever method of due diligence you choose, it’s essential to consider the full cost of the purchase before you sign on the dotted line.

Second-hand cars may not be as costly as new cars, but keep in mind that they may require more frequent repairs or have different safety measures in place. A second-hand car may have had features added after the vehicle was bought. Make sure these added extras are included in your insurance, for example an above-standard sound system, as you may not be covered if these additions are not documented.

Do the sums

While it may be common to include a maintenance plan when buying a new car, maintenance won’t necessarily factor into your purchase price when you buy a second-hand car. However, you need to consider the cost of your car holistically, including services, new parts and licenses. You might think a second-hand family car would be less of a crime target (compared to a brand new, expensive sports car, for example) but you are at equal risk of getting into car accidents, which can be pricey without proper insurance. Older vehicles can be targets for crime as unfortunately, the tricks of the car break-in or hi-jacking trades become common knowledge. Upgrading security could be a prudent move, but it’s also worth checking what would be needed, or would impact your insurance premium.

The retail value of your vehicle is also worth discussing with your adviser, as you could qualify for a reduced premium based on your car being an older model. Your adviser will be able to advise on products worth considering for vehicle maintenance too.

All vehicles need to be maintained so that they run well and are likely to avoid a mechanical malfunction, so obtaining a service history on a second-hand car is helpful, if possible. Remember to service regularly (even if you don’t drive often – every 15 000 kms or once per year is a good guideline to follow), and to check that tyres are rotated and replaced as needed. It is up to you to ensure your vehicle license is kept up to date.

Don’t pass by these important updates

Your second-hand car will need to be properly added to your insurance policy. Be sure your adviser knows your routine and where your car will be, so that the correct information is carried over to your cover. Many of us have moved homes recently or are working from home and may have forgotten to update this information. So, it’s worth checking if your policy matches where you park.

Bertus Visser is the Chief Executive of Distribution at PSG Insure

PERSONAL FINANCE

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