4 Benefits of Getting Auto-Top-Up Plus Shortfall Cover For Your New Car

South Africa's budget for 2023 has recently been announced, and its contents aren't particularly surprising. Finance minister Enoch Godongwana has confirmed that while South Africa won't see any major tax proposals passing, taxable income for businesses and individuals will still increase according to inflation. When you add this to the rising cost of living and fuel prices, you'll probably be looking for financial relief where you can find it. While this usually means cutting back on your expenses, you could save money by spending money by investing in shortfall cover (also known as auto-top-up insurance) from Auto & General.

Here are four benefits you can look forward to from making this investment.

Benefit #1 - It gives you more choice

Shortfall cover complements your primary car insurance to cover any gaps in what you owe or want to buy. If you have comprehensive car insurance and you need to replace your written-off or stolen car, you may find that your commercial insurance can only compensate you for that car's current market value. This might not be enough to replace your car with an identical model or allow you to get a newer one that better meets your needs. 

You could also want to replace your car with a more expensive model, only to find out that the amount you owe the bank should it get written off or stolen will be more than the car's actual value. Shortfall cover will ensure you won't end up owing the seller thousands if this happens.

Benefit #2 — It's cost-effective

Many people view insurance as a grudge purchase, even though shortfall cover is usually markedly lower than other forms of insurance. They usually change their mind when they see how much coverage it can offer them and how this can far exceed what they've collectively paid towards their car shortfall insurance over time. 

As the exact amount you pay towards shortfall cover will differ from person to person (based on your car's value and your personal risk profile), it’s a cost-effective way to ensure that you have adequate coverage without having to constantly adjust your coverage limits as the value of your car changes. It's always best to speak to an insurance specialist to make sure you're adequately covered before committing to a shortfall cover car insurance provider.

Benefit #3 — It outpaces depreciation

The moment you take ownership of your car, it starts depreciating in value, even if it's brand new. If you need to replace it for whatever reason, your shortfall cover will make up for the difference between the car's value and your primary insurance payout. It also means that you won't have to constantly recalculate and adjust your coverage limits as your car's value changes. Failing to take out vehicle shortfall insurance also means that should you need to repair or replace a part, you will be able to pay it in full and use original equipment manufacturer parts.

Benefit #4 — It's easy to obtain

Entering into an arrangement with a business can feel like a chore requiring you to spend hours on the phone, making dozens of copies of documents and signing form after form. It can take longer than needed to finalise these agreements, making it seem not worth your while when you finally do get the product or service you initially requested. Auto top-up coverage is easy to obtain as you get it in addition to your existing insurance policy. If you have a valid driver's licence, registered vehicle and car finance agreement, you could get auto top-up coverage in a few days. And unlike car insurance, you may not have to contend with age, mileage or vehicle restrictions. 

To illustrate how all these benefits can come together to benefit you, consider the following example.

Shelley is a parent of four who often volunteers at her children's school. With each child having extra-murals and hobby lessons throughout the week, she decides to purchase a family van capable of ferrying her children, their friends and their equipment and bags around town. She contacts Auto & General to arrange for auto top-up coverage and purchases a new van a few days later. — By this time, the coverage has kicked in without requiring her to spend hours finalising it via email.

A few years pass, and Shelley has a nasty driving accident in poor weather. While she isn't seriously injured, she will require time to recover and has to write off her van. Because she has the foresight to purchase shortfall cover, Shelley is able to replace the van with a model better suited to driving in rough conditions without having to pay a cent extra. Instead of having to scramble to arrange for transport for her kids or worry about how she will afford to replace her car, she can focus on her recovery.

Get Auto-Top-Up Plus Shortfall Cover For Your New Car

If given the choice, most people would prefer to be given the opportunity to prepare for their future instead of being surprised by it. Auto top-up lets you do just that, and unlike saving the money yourself, you can enjoy benefits far exceeding your actual spending. With a streamlined application process and so many established benefits, there's no reason to delay any further. Contact Auto & General to request a quote today.