Having comprehensive car insurance as a driver in this day and age is as much a necessity as the vehicle itself.
Having comprehensive car insurance as a driver in this day and age is as much a necessity as the vehicle itself. Responsible vehicle owners understand that car insurance is as important as having a valid driver's license. The need for comprehensive car insurance has grown exponentially over the years. While having great car insurance in place does give you the necessary peace of mind, it may not be enough to cover all the financial implications that come along with owning a car. For the first-time vehicle owner, this statement may be confusing - you are most likely wondering what that statement means and how it impacts you financially? Well, let’s start with the basics.
It is important for any person accepting an insurance policy to fully understand the agreement between themselves and their insurers. While your car insurance does cover your vehicle in the event of theft, accidental damage, or loss, Reading the fine print on your insurance agreement will save you money and headaches. With that said, here is the lowdown on service and maintenance plans for vehicles. To better understand the difference between maintenance and service plans, it is important to know what your car insurance covers. Here is a list of typical insurance types and what it covers.
The purpose of car insurance is to provide financial cover in the event of loss, theft or damage to either your car or another person’s car. Car insurance does not cover routine repair checks, wear and tear maintenance or even mechanical breakdowns, making car repair warranty plans a necessary added feature to vehicle insurance.
Now that you have a basic understanding of what insurance covers, the types of cover, and the general maintenance and service exclusions, it will be easier to understand what a car maintenance plan is and why it is needed.
A car maintenance plan is more comprehensive than a service plan. It covers both the labour and expenses of parts while also providing cover for wear and tear replacement items such as fuses, wiper blades, and brake pads. A vehicle maintenance plan also covers mechanical components such as the gearbox, engine, and exhaust system. Windscreens, alignment, and tyres are not covered in maintenance plans.
A maintenance plan differs from a service plan in that it provides cover for the more important and costly replacement parts of the vehicle. A service plan, on the other hand, is somewhat different.
A service plan covers the cost of regular services on your car as specified by the vehicle manufacturer. In essence, a service plan pays for the servicing of your car - either on an annual basis or according to the vehicle manufacturer's mileage requirements. Service plan lengths are generally stipulated by the manufacturer and the cost of the plan is affected by the make and model of the vehicle, with luxury and sports vehicle owners paying more for service plans. Replaceable items on your car that are predetermined by the manufacturer to keep your car running perfectly such as oil, air filters, and spark plugs form part of the service plan. Other items included in the service plan are cam belts, brake fluid, and coolant. Labour is also covered in a service plan.
While many perceive a service plan to be comprehensive, the reality is that a service plan is not enough to safeguard you against the financial strain that comes with owning and maintaining a vehicle. For example, here is a list of general service plan exclusions.
These are only a few exclusions and service plans should be read through carefully for a thorough understanding of how the plan works, what it covers, and what the general exclusions are.
Service plans are a good addition to comprehensive car insurance as it allows for a broader range of financial cover for your vehicle. With the basics of service and maintenance plans for vehicles covered, here are a few more terms as well as their explanations that will serve you, the driver well and possibly save you some money by providing you with the necessary information to make the best motor plan decision.
Because of certain restrictions placed on vehicle owners by car manufacturers in terms of service plan agreements that limit scheduled services to approved centres and the many complaints received thereof, the Competition Commission has announced a new set of guidelines. These guidelines will have a major effect on vehicle manufacturers and car owners alike. These changes are set to take place as of 1st July 2021.
The new stipulations put in place by the Competition Commission can be considered a win for the motor insurance industry, the client as well as the car manufacturer by allowing each of them to make the best possible decision regarding cover, service centres, and motor plans.
That brings us to our next topic of discussion, prepaid maintenance plans. While the term is not unfamiliar, there are a few subtle differences. Let’s have a look at prepaid maintenance plans, how they work, and what they cover.
Generally, a prepaid maintenance plan is offered by the vehicle manufacturer and provides cover for routinely planned vehicle services as stipulated by the manufacturer manual. A prepaid car maintenance plan is usually offered by dealerships selling second-hand cars or for new cars that do not have factory-backed maintenance plans. Here are a few benefits as well as a few disadvantages of having a prepaid maintenance plan.
Prepaid maintenance plans may not suit the needs of all vehicles and it is therefore recommended that car owners do the necessary research and ask relevant questions before purchasing any form of motor plan insurance.
With all these options available to vehicle owners, it is important to note that although they all seem rather similar, there are key differences that separate the plans in terms of what each one covers. Making an ill-informed decision when purchasing a motor plan can cost you more money in the long run and perhaps also leave you vulnerable to unnecessary breakdowns and car troubles.
One way to avoid such troubles is to purchase an extended warranty. Let’s break down what an extended warranty covers, no pun intended, of course.
An extended car warranty is an additional form of insurance that cover the electrical and mechanical components of a vehicle in the event of damage or mechanical failure. The value of the plan taken directly affects the level of cover of the vehicle. While some people choose to purchase an extended warranty when purchasing a new car, others prefer waiting just until their service or maintenance agreement is up.
Extended motor plans generally provide cover for expensive and unforeseen repairs such as mechanical breakdowns or electrical failures should they occur during the extended warranty agreement.
Extended warranties generally do not cover scheduled service or maintenance components such as tune-ups, timing belt replacements, and oil changes. The majority of extended warranties also do not cover wear and tear items such as wiper blades and brake pads.
As with any warranty cover, it is vital to read through and understand the fine print before deciding to purchase. Here are a few tips on extended warranties to help vehicle owners along the way.
With all this information, it can be easy to get lost. The key to gaining a deeper understanding of maintenance plans and service plans is to conduct as much research as possible and speak with industry professionals who will help you choose the best-suited motor plan insurance for your vehicle.
Get in touch today with a Miway consultant to discuss your car insurance and warranty plan options or get an online quote right in the comfort of your home. At Miway we take care of your insurance needs, leaving you to live your way, spectacularly so!
