The insurance space in South Africa has long ignored a few things that just don’t make sense. And people are starting to wake up to this reality. The biggest factor that’s being ignored is that, if your car’s value keeps going down, and its value is factored into creating the premium that you pay each month, then shouldn’t the cost of your insurance premium go down too?
It’s an indisputable fact that shouldn’t be ignored. After all, there are some things that get more valuable as they get older, like wine, cheese, properties, collector’s items, and art. And they cost more as a result. Unfortunately, a lot more things become less valuable over time… But it doesn’t work the other way around price-wise. You don’t pay less for something which becomes worth less.
Your car is the most obvious example of this.
The very minute you drive it off the dealer’s lot or showroom floor, it becomes worth significantly less, just because you paid money for it. The value plummets so hard that you can practically hear the downward spiral. You’ve probably heard this info before, but it’s worth repeating, because it’s true.
You also need to consider the inevitable wear and tear that depreciates your car’s value. After several years, plenty of usage, and perhaps a few bumps and scrapes later, your car won’t be worth what it was when you originally bought it. There’s no hard and fast rule telling you how quickly and by how much your car will depreciate. It tends to vary from car to car and from brand to brand. You’ll also need to include other factors, like which brand is launching new and more advanced models to the market. This alone contributes tremendously to the decrease in the value of cars.
What we can tell is that it generally decreases every month by an average of 8-20% per year. Oh, and before we stop harping on about this loss in value, we also think that you should add in the amount that you’ve probably spent on the odd round of repairs and maintenance.
Ultimately, it’s not surprising that while a car is considered a vital purchase in order to facilitate your life (you know, to get you to your job, pick up the kids, etc.), it has historically not been regarded as a good investment.
So, why don’t insurance premiums reflect this decrease in value?
Maybe it’s because the admin and possible related costs around changing every policyholder’s premium on a monthly basis isn’t worth it. But it’s certainly a point worth raising because it just isn’t fair and to us, it is worth it.
According to our research, there’s only 1 insurer who has gone to the trouble of automatically decreasing their clients’ premiums on a monthly basis to account for their cars’ depreciation in value. That’s King Price.
The royal insurer has been around for nearly 7 years and they haven’t fallen to pieces as a result of doing the right thing. If anything, they’ve taken an increasingly bigger share of the market and stood their ground, all the while paying out claims and maintaining a stable reputation for excellent service.
Maybe it’s time to show the insurance industry in our country that we demand action by joining King Price. Then, you can enjoy watching your premium go down every month and put your cash towards something much better. Take a second to hit them up for a commitment-free quote. Your wallet will thank you for it!