If you can pay cash for your desired car, yes, you can buy a car without insurance. It’s only when you have applied for finance (like most of us) that insurance is mandatory, just like when you buy property. Find out what the best car insurance companies are, here.
Insurance is vital because you will not be allowed to drive the car out of the showroom without proving to the bank that the vehicle is insured. In the extreme scenario that you are involved in an accident straight after taking delivery of your new car, you can rest safe knowing that your insurance policy will cover everything. Car insurance is seen as a grudge purchase, but it’s better to pay an affordable monthly insurance instalment than having to pay megabucks for expensive repairs or to keep paying for a car you no longer have (find out more about excess payments here).
Related: 10 Insurance myths, busted.
There are three types of car insurance: Comprehensive cover; third party, fire and theft cover; and third-party cover.
- Comprehensive cover is mandatory if your car is still financed. Comprehensive coverage covers your vehicle on and off the road. It covers damages to your own car if you were involved in an accident, including your excess payments. It also covers damages to the other person’s car (known as third-party cover) as well as damage or fire which destroys your car; theft; smashed windows, damage resulting from a fallen object, storms and even natural disasters. (Find out which cars are cheaper to insure.)
- With third party, fire and theft cover, your car is covered should one of these situations occur. However, this type of insurance does not extend coverage for accidental damage to your own vehicle. It’s usually slightly cheaper than comprehensive insurance but is it worth the risk? If your car isn’t financed, is cheap to repair and you don’t drive very often, it’s not a bad idea.
- Third-party cover is the most affordable, and only provides cover for the other party’s damage. It’s suitable for people who drive old or low-value cars that are fully paid up, and who don’t drive often. It most certainly is better than nothing! (Listen to the Insurance Episode on the AutoTrader Podcast here.)
Useful articles about car insurance
Still in the dark where insurance is concerned? These articles will help:
1. Everything you need to know about car insurance
2. Are older cars cheaper to insure?
3. Top tips to save on your car insurance
Also click here for some car insurance FAQs.
