Insurance requirements for buying a used car in South Africa

Keep your assets safe

It is already well documented that many South Africans are either under or not insured at all. This is quite a dangerous situation to put one's self in as the very nature of our society means that at some point you are going to need that insurance cover.

Related: Tips to get the best car insurance price

When it comes to used cars, many South African consumers are also unaware of the legal requirements surrounding insurance cover. We spoke with a number of insurance providers to find out what those requirements are.

Financed assets

With high-value assets that are subject to a finance agreement such as houses, cars, and leisure equipment, you are not only going to want insurance cover but the finance agreement may also require insurance coverage. In these instances, although you may have physical ownership, the finance house still owns the asset until it is paid for in full. This means that if anything happens to that asset and you are not insured you will still be required to finish the finance agreement and you will have nothing to show for it.

Before taking physical ownership of your financed used car, you will need to show proof of insurance before the vehicle will be released to you and you should definitely not let your insurance coverage lapse during the finance period or you will be in breach of contract.

Non-Financed

If you find yourself in the fortunate position to buy a used car for cash you are not legally required to have insurance, but just because you aren't required to have it doesn't mean that you shouldn't. You should at the very least have a third party, fire, and theft policy to protect yourself.

If you have taken out a personal loan to buy the car for cash we highly advise you get a comprehensive policy to protect yourself if something goes awry.

How to get covered

Getting covered is very easy, you can take your pick of providers out of a hat or use an insurance originator to find you the best deal. Most insurance policies can be done right over the phone and once you've had the car inspected by an approved provider your policy will kick in and you will be covered.

Before making the call you should have the following information on hand:

• ID Number
• Banking information
• Vehicle information - make, year, model, kilometres, etc

The agent may ask you a lot of questions so be prepared for a lengthy call to get everything ironed out.