At some point or another we’ve all experienced that awful knocking sound a car makes when something is about to pack up! It sounds like…, well it sounds like “cash”! Cash we don’t really have lying around, but which we’re going to need sort out the issue. But thankfully there is a way to avoid this anxiety altogether, and it’s not going to break the bank either.
Unless you are driving a new car, with a motor plan, there is always a chance that your car is going to break down at some point. Gradual wear and tear always leads to some type of part breaking or giving away eventually, right? It could be the gearbox, the electrics, or even the engine.
And so you are left with a decision to make:
Option A: Do you accept the risk, and if your car breaks down, you deal with it.
Option B: Or you decide to insure the risk.
But the problem with accepting the risk (Option A), is that if something does go wrong with the car, that unplanned cost could be as much as R50 000. The question then is, do you have the money to get the car fixed? Most of us don’t have that type of cash lying around, and if we do, we certainly don’t want to be spending it on a new engine.
A much smarter decision is to take out a Motor Warranty Insurance Policy.
A Motor Warranty Insurance Policy is designed to mitigate exactly the type of risk we are talking about – your car breaking down and costing you money you didn’t bargain on.
The cool thing is that it’s not an overly complicated type of insurance product. The parts of the car are grouped, and each group has a maximum amount that will be paid if a part listed in that group breaks down as a result of mechanical or electrical failure.
The premium is based on the age of your car, the mileage, and level of coverage you want.
However, you must have your car serviced on a regular basis – this is key, otherwise the insurer could argue that the mechanical or electrical failure could have been prevented had you serviced your car regularly.
Perhaps you’ve decided a new car isn’t a good idea at the moment and you are going to get as much mileage out of your current car as possible. If that is your decision, driving an older car will put you at risk of unforeseen expenses. For a couple of hundred bucks a month, wouldn’t it be a wiser decision to insure that risk?
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Until next time.
The InsuranceFundi Team