Getting car insurance is always a good idea because it can save you a lot of money if you are in an accident or your car breaks down. It’s always nerve wracking when you’re watching a mechanic look over your car, waiting for them to give you a price. You just know that it’s not going to be cheap and in your head, you’re running through all of the ways you could possibly find the money. But having insurance takes all of the stress out of it because the costs will be covered for you.
As long as you can afford the monthly payments and you get good coverage, you won’t get caught out by a big bill. However, a lot of people struggle to manage car insurance costs and that’s usually because they make a claim when they should have just paid for the repairs out of pocket.
Most people with insurance assume that it’s always cheaper to claim but that isn’t the case. In fact, there are a lot of factors at play and you need to weigh up all of your options before deciding whether to make a claim or not. These are some of the key things you should consider.
Is The Car Worth Repairing In The First Place?
Before you even think about how much the repairs are going to cost, you need to ask yourself if it’s worth fixing. Is your car still in good condition or is it on the way out already? In some cases, you would be better off getting a new car instead of making a claim or paying for repairs yourself. If you were planning to upgrade soon anyway, take this as a sign and do it sooner rather than later.
Take a look at how many miles are on the clock and how many times it’s been repaired in the past. If it’s starting to show its age, you might be better off just getting a new car. Then, you need to decide whether you make a claim on the insurance or not. If you have the money to pay for a new car already, it might be better to keep your no-claims bonus and pay for it yourself. However, if you need extra cash for the car, you could claim on your insurance and use the money to help you pay for an upgrade.
Do You Have A Warranty To Cover Breakdowns?
If your car is still under warranty, you have to wonder if claiming on the insurance is worth it. The warranty will cover any repairs until it expires, so you might as well use it for breakdowns and save your insurance for when something else happens. When you buy a new car, they’ll often ask if you want to pay for an extended warranty and it’s usually a good move because it saves you money and helps you keep on top of your insurance costs further down the line.
Even after the manufacturer’s warranty is up, you can still pay for third-party warranty services. Companies like endurance warranty will cover you against any breakdowns or mechanical failures. Although this is an added monthly cost, it can help you to keep your insurance premiums down because you only need to use your insurance policy when you are in an accident.
Sometimes, people will opt for a warranty instead of insurance and then just bank on the fact that they won’t get in an accident. This will make things cheaper but you can never predict what other drivers will do, so it’s always a big risk.
Will Your Insurance Premiums Go Up?
You have to think about the long-term consequences of making a claim because you should assume that it’s going to increase your premiums. If you’re lucky, all other aspects of your insurance policy will remain exactly the same but in some cases, insurers might take a look at your history and decide to raise your rates so they can offset any costs they incur from covering a major claim. People that have made a claim are more likely to do so again in the future. Insurers will increase premiums to cover themselves because you are considered a higher risk. It’s better not to make a claim if this is going to happen because you won’t want the extra costs on top of everything else.
However, if you have been in an accident, you still need to inform your insurance company, even if you are not making a claim. Depending on your policy, failing to inform them could be a breach of your contract and could mean that they refuse to pay out in the future.
How Expensive Are The Repairs?
When deciding whether to claim or not, you always need to consider how much the repairs will cost and whether you can afford them. In most cases, it might be worth getting your car repaired if you can afford to pay for it yourself. However, if the costs are going to lead to more serious financial problems down the line, you should consider whether claiming on your insurance would be a better option.
Before you decide anything, make sure that you see a few different mechanics and compare prices. You should always get at least three quotes so you can see how much it’s going to cost and whether the insurance option is actually worth it. If you need a new car, then this isn’t an issue because your policy will pay out for the full value. However, when repairing the damage, insurers will only reimburse you and won’t cover depreciation in your car’s value.
Overall, it’s about weighing the long term costs against the immediate costs. Your insurance premiums are likely to go up quite a bit if you make a claim, and that’s a cost you will continue to pay for at least a year or two before they come down. That cost is worth it if the cost of the repairs will be a lot. However, if the repairs are relatively cheap or you can claim on your warranty, it might be best to leave the insurance. Paying out of pocket will keep your insurance costs down and save you money in the long term.
Thanks for reading and y’all stay dandy.
-Diego
Follow me on Instagram and Pinterest for more menswear inspiration.
(Some of these links may contain affiliate links, so that means if you click and buy something, I get a cut. It helps keep the site going! Full Disclosure)