My Money Matters | Written by Absa Staff Writer
Owning a vehicle comes with certain considerations and responsibilities, such as maintenance, services and insurance. In this article, which forms part of our Street Smart series, we provide vehicle owners with important tips to consider.
Insurance and shortfall cover
Find a good, comprehensive insurance provider and make sure that your car is sufficiently covered. Insurers will give you the option to either insure your vehicle at market or retail value. Know the difference and choose what is most suitable.
Market value: The value of your car based on its condition, such as mileage and age, plus the retail value.
Retail value: The average price that your vehicle can be sold for.
Comprehensive insurance provides cover for accidental damage or loss, with some policies providing additional value-adds, such as emergency roadside assistance, cover for hail damage, window shield and glass repairs and damage in cases of strikes. There are several exclusions that are then indicated in the policy schedule, such as the wear and tear of vehicle components.
The difference between your car value and the remaining outstanding finance amount, including the balloon amount, may cause a shortfall if you are involved in an accident before you reach the break-even position. Credit shortfall cover does not usually form part of the comprehensive insurance product, although it does in some cases. Credit shortfall cover insures the difference between the value of the vehicle and the outstanding amount owed to the bank. Other factors resulting in further shortfalls include exorbitant excess amounts or rejected claims due to an unintentional violation of the terms and conditions.
It is advisable to shop around, find an insurance policy that works for you and understand your policy schedule. Most insurers provide a reasonable discount when household contents are included in the policy. One can take advantage of this added benefit.
Service and maintenance
This should be done regularly at accredited dealers or workshops. You may have heard this before and it cannot be stressed enough – regular servicing of the car is crucial. This will help avoid unnecessary damage, which will cost you dearly and cause a situation where you end up out of pocket. "A reputable dealership or professional accredited workshop should be used to service your vehicle, to give you a sense of security and available channels when you want to return the vehicle in the event that you are dissatisfied with the quality of the work that was carried out," says Sbu Dlamini, Head of Compliance at Absa Vehicle and Asset Finance.
A typical service includes an oil change, filter changes, checking all components of the car, etc. Service intervals differ and either a major or basic service will be completed, depending on the mileage. “Servicing at a manufacturer-approved service centre or dealer will also give you the assurance that your warranty will not be cancelled and guarantees you quality service,” Dlamini adds.
The maintenance plan that can be bought separately will cover the wear and tear of specific components in the car. Instead of paying cash for all these items or finding the money to replace worn components, this plan proves to be very useful. An accredited service centre or dealer will ensure that the replacement parts are up to the manufacturer’s standard, as their quality is often guaranteed.
