What’s the best insurance for your second-hand car?
When buying a car, you often look for the right insurance compromise. The question is this: “Do I take out fully-comprehensive cover for my car even though the premium is high? Or do I only choose the statutory insurance, at the risk of regretting it when an accident happens? ” Between these two approaches, there is a third way to optimise the cost of your car insurance while protecting yourself when disaster strikes. Find out how to choose the best approach based on your profile.
The recent used car and the smart buyer
Profile: You know how to spot a deal. Rather than buy a new car, you'd rather buy a used car that's only a few months old and has a few thousand kilometres on the clock, and pay 20% less for it.
What car insurance? Fully-comprehensive cover, which offers the best guarantee. In Luxembourg it’s known as Casco.
Why? Because you wish to benefit of a full coverage and a 0 risk strategy as your car is practically new. Moreover, at AXA, a vehicle is considered as new until 12 months after it is put into service and this entitles you to all advantages of a new car (e.g. New Car coverage).
The reasonable buyer and a used car over 3 years old
Profile: For you, a car must be the right fit for your budget. For you, a car must above all be reliable and be able to accommodate the whole family. You choose vehicles between 3 and 5 years old. Your preferred models are the estate, MPV, saloon or SUV.
What car insurance? A fully-comprehensive insurance contract with deductible on material damages.
Why? To lower the price of your insurance, by paying for some small damages out of your own pocket, while being protected in case of a higher outlay. This deductible only covers material damage (when you damage your vehicle without third party involvement). Let's take the example of an excess of €750: if the repairs are below €750, they are at your expense. If they exceed the deductible, then the difference is covered by the insurance.
The cautious buyer and a used vehicle over 5 years old
Profile: You are under 30 years old and have a limited budget for the purchase of your car. You pick your preferred model - a Golf, a Polo, an Audi A1 - but to reduce the cost you choose one that is more than 5 years old.
What car insurance? A ‘Mini Casco’ restricted comprehensive cover insurance with total loss option .
Why? Your car has lost value over the years, it may not be cost-effective to take out fully-comprehensive cover. But if it is completely written off, it would be difficult for you to buy another one overnight.
With this approach, glass breakage is covered, as are material damage in the event of fire, natural risks (such as storms), or a collision with an animal.
Any other material damage caused by an at-fault accident is at your expense, unless your car cannot be repaired. In this case, the insurer compensates you to enable you to buy another vehicle.
This solution lets you considerably reduce your premium but still get back on your feet when disaster strikes.
The occasional driver of a car over 20 years old
Profile: Do you own a second car you use to head for the woods to walk your dog? Or are you a young driver and your grandmother has given you her old car?
Which insurance? The statutory basic insurance.
Why? Your car has no real value and paying for insurance strikes you as pointless. The statutory basic insurance is the compulsory minimum insurance. Its purpose is to cover damage you might cause to others (in the event of hospitalisation following an accident, for example).
Also read through these 7 essential tips before insuring your car in Luxembourg.
