Nickita Bevan
The cost of car ownership is rapidly rising.
New car prices have jumped by 5%, while used vehicles are up just over 2%. Financing these purchases is also becoming more expensive with higher loan values. However, the biggest challenge to SA vehicle owners' is the increasing cost of maintenance.
“Maintaining a new car valued at around R350,000 can incur total expenditures exceeding the average monthly repayment by 55% - putting strain on already cash-strapped consumers contending with the cost-of-living crisis,” says Nickita Bevan representative from Motor Plan Direct*, citing a recent study.
Expect the unexpected
Year-on-year the average cost of the household food basket increased by 6,2% and new car sales have increased by 5% since last year. While motorists can’t predict what could happen to their vehicles, they can make sure that they are prepared for it. “Value-added products and services from insurance providers and vehicle dealerships can help motorists save money in both the short- and long-term,” she explains.
“Car insurance is essential for protecting motorists in the case of major accidents. However, insurance doesn’t cover items such as mechanical or electrical failures, regular services, roadside assistance, or tyre and rim protection. This is where value-added products and services come into play by ensuring vehicle owners are covered with protection and support for all eventualities. These products and services can help bridge the financial gap, provide preventative maintenance and make financial planning simpler,” notes Bevan.
Below she outlines some of the products and services motorists can apply for:
• Motor Warranties – A motor warranty differs from a maintenance plan as it is specifically designed to cover the cost of mechanical or electrical breakdowns, and not damages caused by everyday wear and tear. If a vehicle part malfunctions, the repair cost can be extensive which is why a motor plan makes financial sense.
• Service Plans – Preventative maintenance is crucial to keep cars running. A service plan covers the regular services a vehicle needs such as oil changes, filter replacements and basic vehicle servicing. Maintaining these fundamentals is a proactive approach to avoiding escalating costs as vehicles age.
• Tyre Cover – This is an add-on product that gives coverage for the repair and replacement of tyres. If drivers accidentally damage a tyre or rim in a pothole for example, they won’t be left with the unexpected cost of replacing this.
• Scratch & Dent Cover – Keeping a vehicle’s bodywork pristine can add tremendous resale value, but repairing scratches and dents can become costly. This type of cover allows drivers to claim for the repair of chips, minor dents and light scratches.
• Excess Waiver – If a vehicle is involved in an accident there is often an amount over and above what insurance pays out called an excess. By paying a monthly fee, owners can waive this excess so that they are fully covered if they have an accident claim.
• Credit Shortfall – Should a vehicle be written off in an accident, stolen or hijacked, a credit shortfall pays the financial gap between what is paid out by the insurer and the outstanding amount still owed on a finance agreement.
• Roadside Assistance – Breaking down on the side of the road is not only stressful, but can also be dangerous. Roadside assistance provides rapid emergency assistance – usually 24/7 – to ensure the safety of the driver and passengers.
“Yes, motorists will have to pay for these products on a monthly basis,” elaborates Bevan, “but when weighed up against the devastating costs they could be facing for major mechanical breakdowns, unexpected services, and even road accidents caused by faulty or worn parts, these costs are nominal.”
“Getting your house in order when it comes to things like value-added products and services not only ensures that you can keep a financial handle on your vehicle’s maintenance costs without being out of pocket, but also goes a long way to securing your personal safety, and that of your passengers. With the cost of daily living already threatening to overwhelm so many of us, can you really put a price on peace of mind?” she concludes.
* Motor Plan Direct is a brand of Moving Capital (Pty) Ltd. Administered by MVIA (Pty) Ltd, an authorised financial service provider (FSP 45790). Intermediary Services provided by MVIA Services (Pty) Ltd, (FSP 46967) and authorised intermediaries. Insurance products are underwritten by Mutual & Federal Risk Financing Limited (FSP49551). Non-financial products are not regulated by the Financial Sector Conduct Authority (FSCA).
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