Buy your car and insurance together

Unlike the US and UK, it’s not illegal to drive on South African roads without car insurance. But that doesn’t make it a smart idea. When purchasing a vehicle, buy your car and insurance at the same time, otherwise you run the risk of losing it. If you purchase a vehicle (even secondhand) and only insure it once it’s in your possession, anything that might happen to the vehicle between the car lot and your garage is your own risk.

Even though the chances of accident may be slim, it’s not a chance you should be prepared to take given the value of your car and smaller cost of car insurance.  In fact, financiers who lend you the money to pay for the car will only begin processing payment once they receive a letter from your insurer indicating that the car is comprehensively insured to protect their interest in the asset.

Type of car and insurance

So what type of insurance should you take out if you purchase a new car? Even if it’s not financed, only comprehensive insurance covers your vehicle for accidental damage. Third party car insurance and third party fire and theft do not protect your vehicle from accidental damage that you cause. They cover third party property in the event that you cause an accident.

Comprehensive car insurance covers your vehicle for accidental damage, whether you are responsible for it or not, which makes it the best cover for new cars. When purchasing a car and insurance, you may cover the vehicle from the day on which you take possession of it.

You can (and should) get quotes for your new car and take out a policy before you collect it. You will only begin paying for premiums once it is in your possession. All you will pay beforehand is a pro-rata or administration fee once you enter into a contract with the insurer.

When you buy a car and insurance, you do not have to purchase insurance from the organization lending you the money for it. They may offer you a quote, but it’s best to compare car insurance before you buy a new car to see who covers you more comprehensively and offers the best benefits. As you do not want to pay two pro-rata fees, it’s best to find the right insurer before you purchase the car.

The insurer will then give you a letter stipulating the type of car and cover, the date of inception of insurance and the amount for which it is insured.