Making Smart Moves: Key Factors for Car Insurance & Pre-owned Vehicles

When safely navigating South Africa’s diverse roads and terrain, making informed decisions regarding your Car Insurance and pre-owned vehicles is essential. Finding the right insurance solution is paramount for South Africans, especially those prioritising family security. As a well-known and trusted name in insurance, Auto & General understands your unique needs. From protecting your loved ones to securing your assets, we’re here to guide you through the key factors influencing your insurance choices.

The prevalence of pre-owned vehicles in South Africa

Over the last few years, South Africa has seen a significant shift in the car market, with an increasing number of people opting for pre-owned vehicles from reputable dealerships. This trend indicates a departure from the traditional approach towards brand-new cars, as more consumers recognise the affordability and value offered by second-hand options.

The rise in popularity of pre-owned vehicles has been accompanied by a rise in second-hand dealerships nationwide. These dealerships often offer a wide range of certified pre-owned vehicles backed by warranties and thorough inspections, which dispel the myth that second-hand vehicles are inferior to new cars.

According to Group1 Cars, South Africa’s second-hand market saw a significant rise, with total sales reaching R12,932,363,057 in 2023, marking a 7.3% increase from the previous year’s total. The influx of top-tier used vehicles into the local pre-owned market was particularly noteworthy. This suggests consumers' growing confidence in the affordability and reliability of pre-owned vehicles from credible sources.

One common question from prospective buyers of pre-owned vehicles is whether they should invest in Car Insurance for their purchase. The answer is a definitive yes. Car Insurance is essential for protecting your assets and providing financial security in the event of theft, accidents, or damage. Insurance is highly advisable regardless of whether the vehicle is brand new or second-hand. With comprehensive coverage, drivers can enjoy peace of mind knowing they are sufficiently protected on the road.

Benefits of buying a second-hand car

When considering the purchase of a pre-owned vehicle, being aware of the factors contributing to its value is important. The following elements can influence the valuation of a used vehicle:

• Age

• Mileage

• Condition of the vehicle

• Service history

• Market demand

• Depreciation rate

By carefully evaluating these factors, prospective buyers can make informed decisions to find the best value for their investment. Discover what to look for when purchasing a second-hand car.

Despite the common misconception that new cars are superior, there are numerous benefits to buying a second-hand car.

• The cost savings. Pre-owned cars typically come with a cheaper price tag compared to newer models, making them more accessible to a wider demographic of buyers.

• Avoiding depreciation hit. Because new cars experience the most significant depreciation within the first few years of ownership, purchasing a used vehicle means buyers avoid this initial depreciation hit.

• Modern features without extra expense. Many used cars still offer modern features and technologies, so buyers can find well-maintained pre-owned vehicles equipped with entertainment systems, advanced safety features, and comfort amenities at a fraction of the cost of a new model.

Choosing the right Car Insurance for a used car 

When it comes to insuring a pre-owned vehicle, there’s no one-size-fits-all Car Insurance solution. However, various insurance options are available, each catering to different requirements and preferences. Understanding these different options is necessary to choose the right cover for your second-hand car:

• Comprehensive Insurance: This offers the widest coverage possible, protecting your vehicle against various risks, including theft, fire, accidents, and natural disasters. This policy is ideal for owners of second-hand vehicles who want to know that their car is fully protected. For example, take Jarryd, who recently purchased a second-hand luxury sedan. He chooses Comprehensive Insurance to safeguard his investments. Several months later, while parked on the street, his car is damaged by a hit-and-run driver. Luckily, thanks to his Comprehensive Insurance policy, Jarryd’s insurer covers the cost of the repairs, allowing him to get back on track without worrying about the financial burden.

• Third-Party, Fire & Theft Insurance: This type of insurance covers third-party liabilities, such as property damage or bodily injury, and protects against theft and fire. While it’s not as robust as a fully comprehensive policy, it offers valuable protection for pre-owned vehicles. Take Mbali, who owns a second-hand SUV and decides to opt for Third-Party Fire and Theft Insurance, as she predominantly wants coverage for any injuries or damage she may cause to others while driving and protection against fire and theft. So, when Mbali’s car is stolen from her driveway, her policy covers the theft, resulting in her receiving compensation for the loss of her vehicle.

• Third-Party Only Insurance: This policy provides the most basic level of coverage, protecting against third-party liabilities arising from accidents where the insured driver is at fault. It doesn’t cover any damage to the policyholder’s vehicle. Third-party insurance may suit more budget-conscious owners of less valuable or older pre-owned vehicles. Ashwin owns a second-hand hatchback. He takes out Third-Party Insurance to his insurance costs low. While out driving, he rear-ends another car at the robot. His insurance policy covers the cost of repairs to the other vehicle, but his own car repairs are not covered.

Get used Car Insurance from Auto & General

Get a pre-owned Car Insurance quote from Auto & General tailored to your requirements. Our team is ready to help you find the perfect coverage for your second-hand car.