Fuel prices bite, but here’s how to save on car insurance

Petrol and diesel prices have climbed to eye-watering levels, but South African drivers can reduce another major motoring expense: car insurance.

From pay-as-you-drive policies to telematics programmes that reward careful driving, some local insurers have turned to technology to offer discounts and rewards to motorists who pose less risk on the road. If you drive less or drive more carefully, you could end up paying less for car insurance.

Financial adviser Andrew St Leger of St Leger Trodd & Associates tells Currency that more clients are seeking practical ways to reduce their monthly costs. With fuel prices remaining elevated, South Africans are increasingly drawn towards pay-as-you-drive and mileage-based insurance products.

“We’re already seeing it firsthand with our clients. With fuel and living costs under pressure, more South Africans are looking for premiums that reflect how they drive,” St Leger says. “We expect this trend to continue, particularly among work-from-home professionals and cost-conscious households. Younger drivers, who tend to be more digitally engaged and motivated to drive responsibly, are showing strong interest in these products.”

St Leger notes that usage-based and telematics insurance products offer substantive savings depending on driving profile. “The savings are most meaningful for lower mileage and disciplined drivers – which, given how many of us are working from home, is increasingly a lot of people.”

He cautions drivers to understand how their insurer collects, stores and uses driving data, and whether this information could affect claim disputes or future premiums. Drivers should also carefully review insurance excess structures, and app and device requirements.

What’s on offer 

One of the biggest players in South Africa that uses driving behaviour to determine rewards is Discovery Insure, with its Vitality Drive programme. The programme claims to offer up to R1,500 cash back every month for customers who drive well.

Once you’re enrolled, Discovery installs a tracking device behind the rear-view mirror, linked to your mobile phone. The device monitors driving behaviour: adherence to speed limits, acceleration, braking and whether the driver sends texts or makes calls while driving.

Drivers earn Vitality Drive points monthly based on how well they drive. Discovery Insure also offers clients access to reward and service partners, including up to 20% off servicing and maintenance costs at Bosch, up to 20% off tyre purchases at Tiger Wheel & Tyre, discounts on car seats at Babies R Us and Born Fabulous, and fuel cashback for driving well.

Momentum Insure rewards careful driving via telematics and offers up to 30% cashback through its Safety Returns programme. Rewards are based on engaging with safety features in the Momentum app, including the safety score questionnaire and the activation of Safety Alert (a panic-button feature).

Outsurance’s SmartDrive programme gathers driving-habit data through its app, including driving style, distance travelled, time of day, phone usage and speed-limit compliance. Drivers receive a guaranteed 10% discount on their monthly car insurance premium once they complete at least 200km and five separate trips.

For drivers who travel fewer kilometres, Santam’s SmartPark programme offers a straightforward distance-based benefit. Motorists who drive less than 15,000km annually can save up to 20% on premiums. The discount is based on odometer readings submitted at policy renewal, and drivers can adjust their kilometre band if their circumstances change.

The incentive to switch 

Dotsure, backed by Hollard, offers mileage-based car insurance with personal-use limited-mileage options. These products restrict a vehicle to travelling no more than 6,000km or 12,000km over a 12-month period. Above 12,000km, motorists are moved into the unlimited-kilometre category.

Naked Insurance offers CoverPause, which allows drivers to downgrade their comprehensive cover to stationary cover on days when they are not driving. Customers can save up to 50% on their premium while still being covered for theft, fire, weather damage and other risks to a parked car. Coverage resumes with a single tap when needed.

Privacy concerns about telematics tracking remain a major issue for some motorists, while others dislike insurers’ monitoring of cellphone usage and driving patterns. Drivers must also keep the tracking app active and functioning properly.

Yet for those who spend less time on the road or who drive carefully, these products are becoming increasingly attractive. As fuel costs climb and more South Africans work from home, the incentive to switch to a plan that reflects their actual risk profile has never been stronger.

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_{Top image collage: Rawpixel; Currency.}