A Ferrari 250 GTO. (Photo: Wikipedia) 
A car is a depreciating asset that starts losing value the minute you drive it off the showroom floor, which is why many financial advisers recommend that you keep your car for as long as possible.
The trick is making sure you maintain that car. My father-in-law loved cars, so much so that he could never bear to part with them. This meant he ended up with a motley collection, and the task of selling the cars has now passed to his family. I was surprised to learn that his vintage 1975 Mercedes (with low mileage and in pristine condition) is actually worth a fair amount.
There are some issues to be aware of if you need to insure a classic car. First is the valuation. With a more recent model, dealers would simply refer to the book value and adjust it depending on the condition of your car. However, the book value might not be so readily available for a car older than, say, 20 years.
Your best bet is to take the car to a professional valuator or a recognised car club that can examine it and give you a professional valuation on their letterhead.
Your second option is to approach a specialist vintage car dealer. Reputable institutions such as Crossley & Webb will assess your vehicle and provide a letter for your insurer.
As Chris Pretorius, chief underwriting and claims officer at Genric Insurance, points out, driving your car longer is only a brilliant financial move if you play it smart.
Smart moves
Pretorius recommends this route:
Mechanical warranty insurance: Think of this as your financial life jacket. Once that factory warranty expires, you’re flying solo – unless you get smart about mechanical warranty insurance. For as little as R160 to R600 per month you can get coverage for when major components quit.
Service and maintenance plans: These let you spread those inevitable service costs over monthly payments instead of getting walloped with surprise bills.
Tyre and rim insurance: If you’ve driven on South African roads you know the pothole struggle is real. A single tyre blowout and rim damage can cost you serious money. For between R80 and R245 per month you can get coverage of between R4,000 and R16,000 per incident for up to two wheels at a time.
Comprehensive insurance: Pretorius warns that this is where many people trip up. Always insure your car for its retail value (what a dealer would sell it for) and not the lower market value. Keep your insurer updated on any additional features or safety devices you’ve added, because the last thing you want is claim-time surprises.
/file/dailymaverick/wp-content/uploads/2024/07/ED_511668.jpg "Classic and modern vehicles cars on display during the Motor Show at Fourways Mall in Johannesburg on 5 July 2024. (Photo: Gallo Images / Luba Lesolle)")
What you had to say
“Just recently, my specialised insurer told me that it was refusing to comprehensively insure the older cars, supposedly because of a lack of parts availability,” said Money Cents reader Steven Darge.
“I was astounded; the youngest car on my policy the insurer says this rule applies to is from just 2004 and it’s a Toyota, meaning parts are definitely available. At best, my insurer was only willing to offer third-party, fire and theft coverage, which would leave me high and dry if someone else were to smash into one of my beloved rides.
“I could not believe that this was a universal policy, so I rang and asked how it deals with other, far more well-off clients who own vintage and valuable Ferraris, Lamborghinis, etc, for which parts obviously aren’t available and whose owners clearly wouldn’t settle for anything other than comprehensive cover.
“The insurer said it needed a valuation from either a car club or a professional valuator to confirm that the car is a ‘classic’ or sought-after, and to insure it comprehensively at the confirmed value.
“The alternative, it said, is to find an even more niche insurer who would insure the cars comprehensively.
“My advice: don’t just accept your insurer telling you that it won’t cover the car as you need it to. Challenge the insurer and shop around,” said Darge. DM
This story first appeared in our weekly Daily Maverick 168 newspaper, which is available countrywide for R35.
