- 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.
This can be very easily understood if we consider the resale value of a car. You might choose to spend more on performance and luxury accessories, on pay a premium for a vehicle that just looks better than a standard model, but that won't halt the decline in the book value of your car.
Except for the very rare instance of collectible vehicles, buying a car is not like investing a fine art or vintage wine. It doesn't gain value over time and it certainly doesn't get better with age. (Rare vintage Jaguars and Ferraris are some of the most sought-after collectibles around, but I wouldn't bet the family fortune on selling your 30-year-old Daewoo to a Bahraini sheik.)
"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"
So why would anyone pay more for car? For the simple reason that, for most of us, a car is an indispensable tool. We use it every day to get to work or to take our kids to school. And like a trusty pair of hiking boots, we're willing, if not exactly happy, to spend more for reliability, safety, performance and comfort. Some of us are even willing to pay extra for a prestige brand.
However, no matter how much you may enjoy driving your car, no matter the looks people give you when they see your custom paint job or hear your 50 speaker Bluetooth surround sound system, your car, like almost every car, is worth a little less each and every day.
It's something to think carefully about when you consider the value you're getting from your car insurance. Sure, your car still looks good, the air con still cools you down on a hot day, but the plain fact is that its resale value is significantly lower now than it was even one year ago. And if your car is worth less on the market, why on earth would you pay the same amount to insure it as you did when you bought it? It's just a car, for goodness sake, not the Mona Lisa.
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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