You may be a responsible driver and car owner, but it’s impossible to predict the hazards of South African roads – whether it’s the state of those roads or the other people driving on them. Despite this reality, however, it may surprise you that about 70% of those cars you see on the road are uninsured. Car insurance brokers do ask applicants to jump through quite a few hoops and the policies themselves come with many caveats attached. It should come as no surprise then that some South African drivers would rather turn to a new breed of short-term car finance. This kind involves fewer hoops and pays-out very quickly.
So, is a car insurance policy still worth it if specialised short-term car finance can foot the bill for repairs? And can this new breed of car finance offer the same perks as a traditional comprehensive car insurance policy? Let’s find out.
What Is The Difference Between Car Insurance And Short-Term Car Finance?
Car insurance refers to long-term insurance policies that cover the costs of any damage to your car or any those of any other drivers in the event of an accident. Different policies will offer different levels of cover. Some policies cover everything from repairing and replacing damaged components to the flashy bodywork of your car. Others only cover the cost of repairing damage to other parties in the event of a car accident. You can also count on a car insurance policy to pay-out according to the resale or market value of your car if it is lost through theft or in an accident.
If you don’t have a car insurance policy, you can still get a financial shot-in-the-arm to cover the costs of making repairs to your car’s bodywork. Whether you’ve been caught in a car accident, a fender bender, or an unfortunate run-in with a stray trolley, you can afford to repair these damages even without a car insurance policy to your name. The process is very simple: you apply through a service provider, who negotiates a short-term loan on your behalf from a reputable bank, and then with this loan, you can cover the price-tag on your car’s bodywork repairs.
Which Car Finance Option Has More Benefits?
Depending on the policy you choose, car insurance covers a range of benefits for South African drivers:
- Financial cover to repair damages to your car after an accident
- Cover the replacement of your car if it is stolen or written off in an accident
- Cover the replacement of your car in the event of a natural disaster
- Third-party cover (i.e. cover for the damage of another driver’s car, if you caused the damage)
- 24-hour roadside and emergency assistance
Meanwhile, short-term car finance can cover the following damage:
- Hail damage
- Fender benders
- Scratches to the paintwork
- Tar flecks
What’s more (and again, this is still dependent on which provider you choose to rely on), any repairs made through these short-term finance agreements come with a lifetime warranty on the repairs to your car’s bodywork. However, the service provider has the final say on which panelbeater will make those repairs.
So, Should I Throw Out My Car Insurance Policy?
In short, no. Although short-term car finance is indeed a good alternative in a pinch and there are fewer conditions to meet when applying, it doesn’t cover the cost of every component of your car that was affected in an accident and restricts which panelbeater you can go to for repairs. Car insurance is still your best bet, since you are more likely to be able to afford a full repair of the car, on-the-scene, and if necessary, cover the cost to repair damage to any third parties. Instead of relying on a last-resort, once-off cover, rather look into getting a car insurance policy that you can afford. Get multiple quotes today!