This festive season may be the best time to cost compare
More than half (57%) of South Africans are earning less now than they were before the start of the Covid-19 pandemic and the national lockdown, while 58% (up by 20% since 2019) say they feel highly stressed about their financial situation.
Those findings, published by Old Mutual in its latest Savings & Investment Monitor, paint a picture of a South Africa where household budgets are tight, and the need for savings is greater than ever.
South Africa’s short-term economic outlook remains challenging, with the lingering effects of the Covid-19 pandemic expected to last well into 2021. At times like this, it pays to shop around for the best deal.
“People should be doing more comparative shopping – and not just for big-ticket items, but even for their daily groceries,” says Prem Govender, Chair, South African Savings Institute (SASI). “The old saying still holds true: if you take care of the cents, the rands will take care of themselves.”
“On one hand, consumers are looking to cut costs; while on the other, they’re looking to get as much value as possible out of every financial decision. By using a cost comparison platform, you can compare deals from multiple providers at once, saving you time and money,” Hippo.co.za CEO Bradley Du Chenne said.
The best way to explain this, says Du Chenne, is to show it.
“Let’s say you drive a 2015 Volkswagen Polo 1.6 Comfortline,” he says. “That’s one of the most popular cars on our roads. Now, if you use a comparison platform to compare comprehensive car insurance options on that vehicle – bearing in mind certain variables like where it’s parked overnight and your personal insurance history – you’ll find monthly premium quotes from a number of leading local insurance providers ranging from R632 (R6 500 excess) to R767 (R4 500 excess). That’s a difference of R135 a month, or 17%, on the premium.”
The potential savings in other insurances are even more pronounced. When it comes to life insurance quotes, life cover of R3 million for a 40-year-old male produces 12 quotes on Hippo.co.za’s comparison platform, ranging from premiums of R463 to R961 per month. That’s a significant difference of about R500 a month, or R6 000 a year.
Those savings are significant. The R135 a month the first individual could save on car insurance may not sound like much, but it all adds up over time; while the R6 000 in annual savings in that second case study is a big deal. Those savings could pay for a good laptop or a local holiday – or they could be the difference between the individual being able to pay their rent or not during times of financial stress.