Financed Vehicles Become Uninsured - 21 Dec 2009 16:00
Overwhelmed by the joy of having paid off their vehicle, many car owners don’t renew or take out new car insurance. The number of uninsured motorists on the road increases every year as the number of financed cars decrease.
Once a vehicle is no longer financed, that is: has been paid off, the financier no longer requires the car to be insured as they no longer have a vested interest in the vehicle. When a car is financed it’s compulsory for it to be comprehensively insured, as soon as the finance is settled the insurance is cancelled.
The rising costs of ownership and maintenance of new and previously owned cars sees more motorists continue driving their un-financed car instead of buying a new one. This means less insured vehicles on the road, which, given more than 14,000 fatal road accidents a year, is a high risk for everyone else on the road.
Unlike developed countries, South African law does not make car insurance compulsory, where it should be given the chance of a road accident with 9 million vehicles on SA roads. If a driver cannot afford comprehensive insurance, then third party is essential recommends Pavin Pather, risq specialist at Centriq Insurance.
Being unable to cover damages you’ve caused to a third party as a result of an accident, makes it impossible to apply for car finance.The risk to not insure, then, is higher than the amount you’ll pay in insurance premiums every month for an insured vehicle.
Overwhelmed by the joy of having paid off their vehicle, many car owners don’t renew or take out new car insurance. The number of uninsured motorists on the road increases every year as the number of financed cars decrease.
Once a vehicle is no longer financed, that is: has been paid off, the financier no longer requires the car to be insured as they no longer have a vested interest in the vehicle. When a car is financed it’s compulsory for it to be comprehensively insured, as soon as the finance is settled the insurance is cancelled.
The rising costs of ownership and maintenance of new and previously owned cars sees more motorists continue driving their un-financed car instead of buying a new one. This means less insured vehicles on the road, which, given more than 14,000 fatal road accidents a year, is a high risk for everyone else on the road.
Unlike developed countries, South African law does not make car insurance compulsory, where it should be given the chance of a road accident with 9 million vehicles on SA roads. If a driver cannot afford comprehensive insurance, then third party is essential recommends Pavin Pather, risq specialist at Centriq Insurance. Being unable to cover damages you’ve caused to a third party as a result of an accident, makes it impossible to apply for car finance.The risk to not insure, then, is higher than the amount you’ll pay in insurance premiums every month for an insured vehicle.