Vehicle owners drive their cars for much longer as tough times set in
June 1, 2020
Decline in new car sales and driving cars for longer, even until the vehicle is paid off, makes extended warranty insurance a financial planning essential
Your car is a great asset that gets you where you need to be. There’s also nothing quite like having a car that’s still in great condition AND it’s paid off, especially when times are as tough as they are. As reliable and trustworthy as your chariot is though, one of the things that owners of older vehicles could face is the cost of a major component breakdown which is no longer covered under a manufacturer’s warranty.
“Typically, a new vehicle will come with a basic manufacturer warranty – this manufacturer warranty covers mechanical and electrical parts for repair or replacement should they fail within a certain mileage or age – usually under 100 000km or anywhere between two to four years, but this varies from manufacturer to manufacturer. With consumers facing major financial stress for months to come, they are delaying new vehicle purchases and instead driving their vehicles for much longer, usually until they are paid off. this exposes them to the risks of ‘out of manufacturer warranty’ breakdowns,” explains Carl Moodley, Chief Underwriting & Claims Officer at GENRIC Insurance Company Limited. GENRIC is an authorised Financial Services Provider (FSP 43638) and registered Short-term insurer.
Warranty Insurance for Paid Off Cars
In such circumstances, a Mechanical Warranty Insurance policy is an invaluable financial planning tool that covers the repair of your car due to mechanical failures or breakdown once it falls outside of its factory warranty period. On GENRIC’s mechanical warranty product, your car will be covered for mechanical or electrical failures up to 220 000 kilometres or as long as the car is younger than 12 years old. Over 30 components are covered such as the engine, transmission, gearbox, turbochargers, bearings, cooling system and electrical components. In the event that your car breaks down as a result of mechanical or electrical failure, the warranty will take care of repairing or replacing the parts subject to the policy limits defined per component, and subject to the benefit option you choose.
Popular Vehicle Policies
“These policies remain very popular despite the tough economic environment, and this is attributed to the important lifeline these policies provide. There are an increasing number of older vehicles on the road, and consumers are delaying new car purchases as they look to pay off and consolidate their debt. For a relatively low premium starting from around R150 per month, a major mechanical breakdown such as an engine, cambelt or turbocharger failure – which can easily top R25k or more in costs – will be taken care of and you won’t have to fork out the full repair cost from your own pocket. If you don’t have the means to finance such repairs, and you don’t have mechanical warranty insurance, you may very well end up with a car that you cannot drive, and you won’t be able to sell it, at least not for what it’s really worth to you, if in a state of disrepair. It’s an invaluable cover at a time when a big financial knock could set you back for years, or force you to write you car off,” explains Carl.
It’s important to know that a mechanical warranty product is not a service plan, so you cannot claim for parts that fail due to wear and tear such as brakes, batteries, tyres and so on. Your mechanical warranty policy will also require that you service your vehicle at the required service intervals by an authorised service provider to ensure that it is maintained and in good working order. The policy covers you for unforeseen mechanical failures and breakdowns, and not for neglect or lack of maintenance – valid service records will be required at the time of a claim.
For more information visit https://www.genric.co.za/mechanical-warranty-insurance/
T’s and C’s apply.
GENRIC is an authorised Financial Services Provider (FSP 43638) and registered Short-term insurer.
All info was correct at time of publishing