Cost of living crisis: The risks of skipping car services and insurance premium payments

A recent survey reveals that 1/3 of UK drivers admit to skipping an ‘essential car service’ on their car due to the cost of living crisis. With South Africa’s interest rates at a 14-year high, it’s fair to say that South African motorists are also looking for ways to cut back on living expenses. 

Research by Volkswagen Financial Services UK found that just over 40% of drivers, aged between 18 and 34, are choosing not to have routine car services carried out to save cash. The research also found that almost two-thirds of drivers would be keen to spread the cost of vehicle maintenance rather than pay in one lump sum.

This is where a product like the Service Plan or Maintenance Plan comes in handy. With these motoring plans, consumers pay a fixed installment every month, and all major services and maintenance are covered. If the interest rate rises, as it did recently in South Africa, or if parts and labour become more expensive, the monthly payment for the service plan and maintenance plan remains the same. This makes it so much easier to budget. 

There is also evidence of many South African motors skipping a monthly insurance payment, which is a financially risky decision. If you miss one or more of your monthly insurance premiums, you risk losing coverage, and that’s a mistake that could end up costing you a lot more in the future.

It is possible to protect your vehicle, and your finances, while at the same time lowering your insurance premiums. 

 How to lower your insurance premiums

• Change your insurance from a comprehensive policy to a policy with lower coverage. This is not possible if your car is financed and is only advisable for older cars that are already paid off.
• Update your details with your current insurer. If you have changed jobs or moved to a new house, your premiums might be lower. You could also ask them to give you a new quote – sometimes you might be pleasantly surprised with lower premiums.
• If you are struggling financially to pay your monthly premium, contact your insurer to explain the situation. This is a better approach than simply ignoring the problem, and your insurer will likely work with you to find a solution.

 Dangers of skipping a car service or essential vehicle maintenance

Avoiding car services as a way of saving money is a false saving plan. If routine maintenance is ignored, it could result in bigger problems. For example, engine oil protects the moving parts of the engine. If your car runs out of oil, or the oil becomes too old, this could cause major damage to the engine.

 Below are a few important reasons to maintain your car’s service schedule:

• Prolong the life of your car: Fresh fluids, like engine oil and brake fluid, and new components ensure the car is running at its best.
• Better resale value: Cars with a full-service history have a higher resale value because there is a proven track record of the vehicle’s overall health.
• Improved fuel economy: Engine efficiency is improved, saving on petrol costs.
• Identify any problems before they become major issues: Services help to flag any issues, so you can repair them before they become bigger problems.
• Increases safety: When all engine components are in good condition, the car can handle better.
• Improves vehicle performance: More stable steering, a reliable engine, and responsive brakes are all benefits of regular car servicing, which translate into improved vehicle performance.
• Maintain your vehicle’s warranty: If your car still has a manufacturer's warranty, regular car servicing is one of the conditions of this warranty.

 The benefits of a car Service Plan or Maintenance Plan

1. Better resale value

The most important reason to purchase a Service Plan or Maintenance Plan is to maintain your vehicle’s market value.  You can show the potential buyer that your car has been serviced regularly and keep up with the maintenance schedule.

2. Affordable option for car repairs

While the cost of auto repairs goes up, the monthly payments for your Service Plan do not. A Service Plan can often pay for itself after the first major repair.

3. Keeps you on the road

Repairs can cost you thousands of Rands.  Unless you have a savings account for such emergencies, it can be a significant disrupter in your life. Regular servicing of your vehicle also gives you increased fuel efficiency, better handling, improved braking, and a smoother running engine. 

Before buying a motoring plan, ask these questions

Not all plans are created equal, so you will want to ask a few questions when making your decision. First, you will want to determine how long you will keep the vehicle, how many kilometres you will drive on average, and what common repairs can cost down the road. 

Here are some questions to ask the provider to determine if the Service Plan is worth the investment:

• Is it a duplicate of your new vehicle warranty coverage?
• What is the cost and how long is the contract?
• What exactly does it cover?
• Where will I need to take my vehicle for the service?

In the end, you should feel that the Service Plan keeps you safe and gives you peace of mind. Contact MotorHappy to get a quick, obligation-free quote.