Make a plan

Looking to Cancel Your Comprehensive Car Insurance?

car vehicle home

Consider carefully before cancelling comprehensive car insurance

When money’s tight people look to reduce expenses, but when considering which costs to cut be careful you don’t make rash decisions with long-term consequences.

It’s always better to try and limit unnecessary lifestyle expenditure rather than costs which could give you some financial security.

Comprehensive car insurance is an example. It’s often considered a grudge purchase, which people are forced to take out when they finance a vehicle. Consequently it’s a cost that they feel justified in cutting, particularly when money’s tight.

It may be tempting to save some money on something you didn’t really want to buy and don’t think you need, but cancelling or not paying the policy because you have a short-term problem could put you in a much worse long-term financial situation.

The reason banks and finance companies insist on you having comprehensive vehicle insurance is that until you’ve paid off the loan, the car belongs to them. This means that if it’s badly damaged, written off in an accident or stolen not only are you without a car, but you still have to pay them whatever is still owing on the finance agreement.

Comprehensive car insurance will cover the cost of repairs or replacing the vehicle. While you’ll still have to pay any outstanding amount on the loan, at least you’ll still have a car to drive. Without it, the cost of repairs or replacement plus the outstanding finance costs could be a major setback, particularly if you need the car to earn an income or get to work.

What’s more, in most cases, cancelling or defaulting on the insurance puts you in breach of the finance contract.

If the finance company discovers what you’ve done, it will enact the asset protection clause that is included in most finance contracts. It can enforce payment to make sure the debt is covered if anything happens to the car. This is not comprehensive insurance and only covers the outstanding debt, so although you will be debt-free you will still not have a car.

Imagine having to pay for accident damage which can run into tens of thousands of rands and still have to pay off your car. Will your budget handle that? Do you have the savings to cover such expenses?

In South Africa we have one of the highest accident rates in the world and a car gets stolen every nine minutes. Consider that before making any hasty decisions which could put your financial future at risk. 

Insurance

Considered insuring your car and home with the same insurer? You could save on your monthly insurance premiums.

Find Out More
Consolidation Loan

A Debt Consolidation Loan can be an effective way to manage your finances and increase your monthly cash flow.

Find Out More
Funeral Cover

When you have funeral cover, you and your loved ones will receive financial support after the loss of a family member.

Find Out More
Medical Aid

Find medical aid cover that best suits you and your family’s needs. Be prepared for unforeseen medical costs.

Find Out More
Personal Loan

A Personal Loan is a convenient way to take care of your personal and family needs and goals.

Find Out More
24%

of customers use loans for consolidation

24%

of customers use loans for renovations

12%

of customers use loans for education

Our Sponsorships

Read more about how we support grassroots Rugby through our Currie Cup Sponsorship.

Read More
Job Opportunities

Thinking of working for DirectAxis? Why not explore what it means to work at DirectAxis.

Read More
Customer Care

We pride ourselves on delivering the best possible customer service. Get in touch today.

Read More
Social Initiatives

Find out more about the corporate social initiatives we're undertaking to deliver positive change.

Read More

Your direct connection to Financial Services. Direct Axis SA (Pty) Ltd (Registration no 1995/006077/07) is an authorised Financial Services Provider (FSP 5 and FSP 7249) © Copyright 2017
Privacy Policy - Legal Documents - Sitemap

Loan repayment terms range from 24 to 72 months. The maximum interest rate with regards to a DirectAxis Personal Loan is 27.75% per annum (compounded monthly). Your rate and initiation fee will be determined according to your personal risk profile.
An illustrative example of a loan at an interest rate of 27.75% per annum would be: Loan amount R50 000 plus a once-off initiation fee of R1 197.00 and a monthly admin fee of R68.40, over 72 months.
The total cost of the loan will be R 110 529.68 which is an Annual Percentage Rate (APR) of 30.95%.