Motor Plans Explained – Every Type of Cover Out There
Motor plans can be confusing at the best of times; understanding the ins and outs of the cover you have elected to take out, over and above your comprehensive insurance, can sometimes overlap in benefits, sometimes you might choose the “wrong” product for your needs and other times, you simply haven’t learned what your cover includes or excludes.
We briefly outline every type of warranty, motor plan or VAP available on the South African market, as well as what they include.
What Warranty Should I Take Out for My Car?
- Extended Warranties
The older a vehicle is the higher the probability for mechanical or electrical failure. The cost to repair out-of-warranty vehicles can be huge, with repairs ranging from R5000 to R10000, sometimes even more.
Warranties conform to the requirements of the Short-Term Insurance Act and cover a vehicle for mechanical and electrical breakdown of components. Often roadside assistance, car rental and other benefits may also be included in the package.
Good to know: The remainder of your motor warranty is normally transferable when selling you vehicle, provided the right documentation is approved and confirmed with the motor plan provider or institute before handover.
- Service Plans
These plans do not extend coverage to the any sort of mechanical or electrical device, in the event that it should out of order or broken. The typical service plan will not cover components such as brakes, clutch and cam belts.
- Add-On Services
In addition to these three fundamental motor plans, additional value added products are also becoming increasingly popular in bolstering standard insurance cover.
Add-on services can include top-up service plans, tyre and rim warranties and scratch and dent cover.
Perhaps the most important thing to remember when taking out motor plans of any kind is that you may only do so if you are covered by an authorised insurance house, and have taken out comprehensive insurance on the vehicle. There are many reasons for this,. But this rule is enforced in large part due to the misconception that any type of motor plan will cover your damage in the event of an accident.
Comprehensive insurance – the non-negotiable factor – will be insurance that covers you for the full amount owed on your vehicle, as well as a credit shortfall option.