This is becoming a very common question lately. Someone buys a car and a few months later, they realise that they cannot afford to pay the instalments. They then cancel the insurance on the car and often, they find that they still cannot afford the repayments.

Cancelling your car insurance is financial suicide! If that car gets stolen or in an accident – you would find yourself paying for a car that you no longer have. So if you are tempted to cancel your insurance this December so that you can spend your money on Christmas shopping, don’t.

Do some car makes cost more in insurance than others? The short and quick answer is YES. Certain cars will cost you more in monthly insurance than others. So if you want to buy a car, one of the first things you should do is to go on-line and find out what your monthly insurance premium is going to be. Never buy a car without first checking what your monthly insurance premiums are going to be.

The reason why some cars cost more in insurance than others is that some cars are a hijackers favourite while others are not. I remember reading in the newspapers a while back that there are cars which are targeted and once stolen, they are taken across the borders out of the country. So these cars would generally be more costly to insure. If a certain car make is not popular then chances of that car being stolen are low.

• What else affects your cost of car insurance?
  The older your driver’s licence, the cheaper your insurance tends to be. So young people have to be very careful what car they buy because insurance is generally more costly for them
• Your accident history also has an impact
• Does the colour of your car influence your insurance bill? Some say not but remember some colours are easier to spray paint than others so if you are accident prone, get a car you can tipex easily
• Where you stay – I discovered a long time ago that township residents generally pay higher for insurance than those who stay in suburbs. Do we still have apartheid? This requires investigation and must be abolished. You should not pay more to insure your car just because you stay in a township. There cannot be any logical explanation for this other than that apartheid practices still linger more than 20 years after democracy. I digress…What can you do if you can no longer afford your car? The sad thing is if you sell your car, there will almost always be a shortfall i.e. you might be able to sell the car but still find that after the car has been sold, you still have a balance to pay your bank. The newer the car and the bigger the balloon, the higher the shortfall generally is. Try and sell your car and take a personal loan to pay the shortfall. It is painful but the cheapest way to get out of a car you can no longer afford. Lingering longer might mean you risk having your credit record blemished.
  

  Complete the following budget BEFORE you buy your next car:

Do you want to buy a car and you want to save on your monthly instalments and get a preferential interest rate? Drop me an email info@thuthuka-sa.co.za. I have Ts & Cs which will minimise the risk of you buying a car you cannot afford.