- Your car loses value every day
- Your insurance premiums shouldn't stay the same or get more expensive
- Only one insurance company's premiums get cheaper every month
Insurance companies have teams of brilliant actuaries and data analysts working out exactly how to price premiums and calculate risk. The problem for consumers is that we can't always tell when we're paying a fair price.
For example, consider the difference between insuring your house and insuring your car. Your home is an investment — in ten years time, it should be worth a lot more than it is now. You'd expect your home insurance premium to stay the same price or even increase over the years. And if the premium gets more expensive, you can choose to switch to a cheaper policy.
Car insurance is different. Your car is not an investment, it's a liability. Every month, your car is worth less. Unlike a house, it doesn't appreciate with time.
This lets insurance companies get away with a little trick: if your car insurance premium stays the same while your car loses value, you're effectively paying more for your car insurance each month.
Why does my car lose value?
On the one hand, the answer to this question is obvious: as you drive, your car experiences wear and tear and becomes liable to break down, which is both a hassle and can require expensive repairs. It's no surprise that something new and in pristine condition is worth more than something older and worn down. Besides, people always want the latest, flashiest model of any consumer item — think about how people queue to be the first to buy the latest smartphone one day before the rest of the public.
But if this depreciation is so obvious, why don't we think about it when we price vehicle insurance? It's because we think of cars for what they symbolise: even ordinary cars don't feel like workday tools. They mean freedom, adventure, the spirit of the open road. Even if we just drive our Hyundai to work and back, we know that at any moment we could veer off and drive to the beach.
"If your car loses value every month, but your premiums stay the same, you're effectively paying more for car insurance every month. That's not fair"
And sometimes the market feels the same way. The sheer beauty and mystique of a 1965 Aston Martin DB5 transcends any worries about a sticky clutch or poor fuel efficiency. You can be sure that car will be worth even more in 2027 than it's worth in 2017.
But however useful your family sedan is, however fun it is to drive, whatever freedom it gives you, as far as the market is concerned, it's just a tool that gets you from A to B, and it's wearing down every day. It's more likely to need expensive repairs every month, and each season, there's a newer, better, shinier model.
That's fine. We buy cars because we need them. We might even grow to love them. But when it comes to being a smart consumer, the market isn't sentimental, and neither should we be. Your car might mean more to you than its simple use value, but you can't sell memories.
One insurer has come up with an ingenious solution. King Price car insurance premiums get cheaper every month. That means that the price of your car insurance policy automatically adjusts to reflect the real value of your car.
In other words, only King Price assures you of a fair price for the lifetime of your car.
King Price are already one of South Africa's leading budget car insurance companies. As the only insurance company in the country whose premiums actually get cheaper every month, they're shaking up the car insurance industry.
Stop paying too much for car insurance and start getting real value from your car insurance company. Get a free quote now. There's no obligation whatsoever, just a chance to save on your car insurance premium every month.
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