Increasing Vehicle Price May Empty Your Wallet, But Not Your Motor Insurance!
Increasing Vehicle Price May Empty Your Wallet, But Not Your Motor Insurance!
Published on March 29, 2021. EST READ TIME: 4 minutes
Automobile manufacturers in India have announced this year’s second price hike. The prices of your dream car or bike models will rise on April 1 2021. This includes major Indian car manufacturers like Maruti Suzuki and international brands like Renault, Nissan, and others. Two-wheeler manufacturers Kawasaki India and Hero MotoCorp have also stated that prices will increase. Once again, the escalating input costs and other impacts of the COVID-19 pandemic were attributed to this decision. Let us look at the main reasons for this increase and the need to purchase insurance for vehicles in order to offset the increase in expenditures.
Rise in Car and Bike Prices: Why is it happening?
1. Increase in cost of inputs: Car manufacturers have been grappling with the rising cost of inputs and raw materials such as polymers, metal and plastic. This is due to the global shortage of supplies and the rising fuel prices that affect freight costs.
2. Switch to new emission norms: Migrating to the BS6 emission norms is another factor influencing the prices. The stricter norm involves automakers to work on the engines of their models to bring down the NOx and PM levels drastically in both cars and bikes. The resultant upgrade is expected to raise the prices of cars by almost a lakh.
As a result, you will see a 1-6 per cent hike in all Maruti Suzuki car models, starting from INR 5000 to as much as INR 34,000. While the exact scale of the price hike is unclear as of now, but brands such as Nissan, Renault, Datsun, and Mahindra and Mahindra are set to make the price revision announcement soon. Similarly, among bike manufactures, Hero MotoCorp bike models are set to become expensive as well. Kawasaki India and Royal Enfield are also set to revise their prices from April 1 for most of their bike models.
How motor insurance can help offset the extra expenses?
Now that you know that your favourite car and bike will get costlier from April, you would need to find ways to offset this extra cost. The best measure for this is to buy motor insurance and that too comprehensive car insurance policy or comprehensive bike insurance policy. Here is why:
1. Save money by avoiding legal fines: Third-party motor insurance is mandatory, and if caught driving without this document, it can get you fined. Do you want to pay a fine of INR 2000 and add to your expenses? Make sure to renew your bike or car insurance or bike insurance at least three weeks before expiry.
2. Save money during third-party liabilities: If you cause an accident that results in damage to a third-party or their property, then you will have to pay for their repairs. The compulsory third-party motor insurance protects your finances in such circumstances.
3. Save money in case of own damage: When your car or bike price increases, it will also result in an increase in the cost of spare parts and hence, maintenance and repair cost. So, getting your vehicle repaired without insurance can be very costly. While third-party insurance is mandatory, its disadvantage lies in the fact that it does not cover own damage.
To activate the own damage component, you need to choose a comprehensive car insurance policy or comprehensive bike insurance policy. This aspect shields you and your vehicle if it suffers damage from accidents, natural calamities, or is stolen. The comprehensive cover will also include personal accident cover and third-party liability. You also get the option to choose appropriate add-ons covers that will further safeguard your finances when you raise a claim.
4. Save money on motor insurance premium: When you purchase motor insurance, you get access to the No Claim Bonus (NCB). If you do not make a claim, you are rewarded with up to 50 per cent discount on your premium. However, if you fail to renew your insurance within 90 days of expiry, you will lose this NCB.
You can also offset the expenses by purchasing or renewing your car or bike insurance online. HDFC ERGO insurance offers great discounts that allow you to save up to 70 per cent on the premium when you buy or renew your policy online. The application process is swift, too, so no time or money is wasted hunting for good options.
Conclusion
Therefore, you should not shirk buying or renewing insurance for vehicles. Motor insurance helps protect you from financial losses when your already expensive car or bike is damaged due to a man-made act or natural calamity. So, while now you cannot avoid paying extra for that Maruti Suzuki Swift, but by purchasing a Maruti car insurance, you can save on future maintenance-related expenses.
Disclaimer: The above information is for illustrative purposes only. For more details, please refer to policy wordings and prospectus before concluding the sales.
This blog has been written by:
S. Gopalakrishnan | Motor Insurance Expert | 40+ years of experience in insurance industry
A veteran in insurance industry, S. Gopalakrishnan is a name to reckon with in the field of reinsurance; he has headed the Reinsurance department and has rich experience in other fields of motor insurance. He loves to share his opinion on the latest topics in the insurance industry and how he can help people in safeguarding their assets using insurance products.
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