Vehicle Insurance Premiums - What You Need to Know

If you are purchasing your second-hand car on instalment, it is mandatory that your vehicle be insured before it leaves the dealership. This is to protect the bank’s asset, which is the vehicle. If you’ve found an insurer, it is time to ask the tough questions, how much will your vehicle insurance premium be, how will it be calculated and what does it cover? Let’s take a look at what it covers and what you should be mindful of:

Factors Contributing To The Price Of Your Vehicle Insurance Premium:

  • Credit Profile 

This will be assessed to determine your relationship with debt and how you pay it off.

  • Location and Vehicle Security

Areas tracked as high zone areas of interest. i.e. accidents, high jacking, theft. Installing an approved alarm system or tracking device is a great way to reduce your premiums. If a vehicle is without any security installed, it will be dependent on the vehicle model and make, the terms and conditions of your insurer and where (location) your car is parked during the day and overnight e.g off-street parking or secure locked gate.

  • Vehicle Model

Vehicles that are slightly more expensive or in high demand or prone to theft tend to contribute to one’s premium increase. This is because vehicle repair costs and recovery are considered in cases of incidents. 

  • Risk Profile

Many insurers will require a regular driver, their age, gender, and other details. These are all determining factors that look at previous driving history, license issued and any prior accidents—all these combined estimate whether your premium will be high or low. Your vehicle insurance premiums will increase in the way the vehicle is driven, stored, and taken care of. If you’re constantly claiming, your premiums will go up because of the risk profile you’re displaying.

  • Inflation 

The knock-on effects of the Covid-pandemic have left financial impactions resulting in increased supplies, repairs, and stock in general. Whether a vehicle is the latest model or a used one, the cost of repairing it bears no warrant to its age. 

5 Tips To Help You Keep Your Insurance Premium:

  1. Increase security features for vehicles as your insurance premium is based on location, vehicle model, and where it's parked.

  2. Don’t claim all the time, excessive claims against your profile negatively impact your risk profile.

  3. Increase your excess when you claim. While the lowest one might be the preferred choice, it calls for expensive premiums which could result in unaffordability. 

  4. Review your cover for any updates which could be beneficial to lowering your premiums.

  5. Always update your details should there be any changes such as your address and main driver information.

Use one of our Auto Pedigree insurance brokers to negotiate the best and most affordable premium. Click here to get started