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What will affect your insurance when buying a used car?

2018-03-28 11:59

Apart from its license, insurance is the biggest grudge purchase car owners must make. But what has the biggest effect on the price of your premium when buying a used car and is there anything you can do to keep it as low as possible?

Almost daily there is a new upstart in the short-term insurance business, bombarding media consumers with flashy colours, catchy tunes and the promise of cash-backs, loyalty schemes, no-claim bonuses and all sorts of marketing fluff.

When you finance a car, it must be insured. How much your premium will cost is calculated through a highly complex matrix of circumstances and probabilities, which combined ultimately determine your risk profile.

Let’s take a closer look at the influencing factors.

1. The value of the car 

This is obvious. The more expensive a car, the more it needs to be insured for.

2. The cost of repairs

It’s easy to argue that an older car is cheaper to repair than a new one, but this isn’t always the case. The availability of parts – especially if it’s a rare model, the manufacturer’s level of representation in the country, the technologies employed in the car and the skills required to fix it – all play a part. Less common equals more expensive.


3. Safety features

Safer cars are seen to be less accident-prone. Most cars have been fitted with anti-lock brakes as standard for the past two decades, while newer systems such as park distance control, lane departure warnings and driver drowsiness alerts all contribute to the mitigation of the likelihood of accidents. The flip side is that once out of warranty, these very systems are also expensive to repair. Bear in mind, too, that on lower-value cars, the replacement of an airbag may cause the vehicle to be written off after a crash – even if it’s a minor one – as the cost of replacing the air bag sometimes exceeds the value of the vehicle.

4. Historical data

This pertains to the number of previous incidents recorded that the vehicle has been involved in. For example, certain SUVs have a history of rolling over or thieves having a certain preference for specific top-end models.

5. Performance

High-performance models inherently carry more risk since they will be driven faster, which mathematically increases the possibility of being involved in an accident due to driver error.

6. Enhancements

Is there anything you’ve added to make the vehicle more attractive to would-be thieves? An expensive sound system or easy-to-nick aftermarket wheels without sufficient nut locks?

7. Usage

How many kilometres does the car cover per year? Is it driven in risky rush-hour traffic or only on Sunday mornings? Is it used for work or play, or both?  

8. The driver

The demographics of the person piloting the car play a bigger role in determining the cost of insurance than the car itself. Your address (is it in a congested urban area or a quiet, secured rural one?), age (the younger the driver, the higher the rates), gender (males are more likely to crash), marital status (married couples are more risk-averse, especially as parents) are the key components, along with your driving history and claims record. The more often you have claimed before, the higher risk you are perceived to be as a driver.

Clearly there are things that can and cannot be done to keep your car insurance premium at a minimum. It may be impractical or unaffordable to move to a lower risk area or only drive when the roads are quieter, but being smart with your choice of vehicle and maintaining a good driving record can go a long way towards saving some of your hard-earned money.

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