How to get the best rate for car insurance

How to get the best rate for car insurance

Last updated on 13th December, 2017 at 10:21 am

Most consumers are very good at insuring their vehicles as soon as they receive them – whether brand new or second hand. What they’re not so good at is making sure they get the best rate for car insurance.


It’s important to assess the value of your vehicle every year when it’s time for the yearly renewal of your car insurance policy. As your car gets older and the mileage on the speedometer increases, so the value of your car decreases. If you do a yearly valuation of your vehicle, you could save money on your insurance premiums as the value of your car will be adjusted downwards.

Retail vs market value

You can choose to insure your vehicle at either retail value or market value, which will play a significant role in the monthly premium you’ll pay. Retail value is the purchase price of your vehicle from the dealer – new or second hand. If your car is insured at retail value your monthly premium is higher, but you can replace your vehicle with a similar model and age. If you insure your vehicle at market value, which is the average of retail value and trade value (trade value is the price a second-hand car dealer is willing to pay when you trade in your vehicle) you will pay a lower premium, but you may not be able to replace your vehicle with a similar model and age.

Insurance package

If you combine your car, household and buildings insurance you cross three hurdles with one leap, but there’s an added benefit – a number of insurers offer a lower premium when you combine the three entities in an all-in-one insurance package. Other things that may affect your premium are:

  • Where you live and whether or not your car is locked securely in a garage. If this is the case, your premium may be lower.
  • If your car is fitted with an alarm or a tracking device your premiums are ordinarily lower.
  • The type of car you drive – if, for example, your vehicle is more expensive to repair (a 4×4 or a sports car), the insurance premiums will be higher.
  • What your car is used for – if you travel for business or delivery purposes, your premiums will most likely be higher.

Last, but not least, make sure you shop around for the best premium for the best possible coverage and make sure you read the fine print of your insurance contract.

By Liesl Peyper

Want to learn more?

We send out regular emails packed with useful advice, ideas and tips on everything from saving and investing to budgeting and tax. If you're a Sanlam Reality member and not receiving these emails, update your contact details now.

Update Now