The second largest purchase that most people will make in their life time is their car, with the largest being their house. The main difference is that statistics show that whilst people might change their house two or three times in their lifetime, they will change their car at least ten times if not nearer twenty. For this reason, it is well in the interest of a car owner to understand the intricacies of car insurance and why you need car insurance in the first place. The law requires that every car on the road in South Africa be insured, at least in the most basic of formats. Basic insurance or compulsory insurance as it is known only covers any other cars for damage repair or people for injury insurance as well as damages who were involved in an accident that you were held responsible for. If your car was damaged in any way, or you sustained any form of injury, then you will need to cover any costs incurred from your own pocket. This is far from being an ideal situation, and one that most people will be prepared to pay out some money to avoid. Most people who have owned a car at one time or another will be well aware of the ins and outs of car insurance, yet for those buying a car for the first time, especially on a limited budget, might find it difficult to understand or appreciate why you need to take out comprehensive car insurance cover. Think about the fact that you are purchasing a vehicle that is a valuable asset. If the car is involved in any form of accident, it needs to be repaired. If it is totally destroyed or stolen, it needs to be replaced. If you have no comprehensive insurance when such a calamity occurred you would find yourself with a very simple choice. Either go out and buy a new car or do without. However if you had the good sense to take out comprehensive cover, the insurance company will provide you with the financial ability to go out and buy a replacement. Insurance premiums are not extortionate, calculated on an annual basis, and should run at around 6% of the replacement value of your car. There are many people in South Africa who would gladly pay out that type of money to get their car back, but for them it is too late. For someone like you who is buying their first car and contemplating the fact that their comprehensive car insurance policy seems like a lot of money, then you should bear these facts very much in mind. Also you should remember that comprehensive insurance generally includes providing a replacement vehicle while your own car is in the body shop for repairs or while you are on the lookout for a replacement if your car has been stolen or deemed "total loss" by your insurance company's valuators. Comprehensive cover also covers you against theft from your car, as well as damage to the car in the event of theft. Items such as radios, disc players, GPS systems, mobile computers and items of clothing being especially popular to car thieves. Not taking out comprehensive insurance for your car, its occupants and its contents is one of the worst forms of false economy. When you are buying your first car take up this rule and stick to it for all your motoring life, in the sincere hope that you will never need it.
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