Warning for anyone who owns a car in South Africa

Naked co-founder Ernst North has warned South Africans about five habits that can wreck their car’s value in the country.

Launched in 2018 by North, Alex Thomson and Sumarié Greybe, Naked sells insurance products via a fully digital platform that uses AI and automation.

Its app allows customers to obtain final insurance quotes in under 90 seconds, buy cover online, submit claims or pause accident coverage without phone calls.

It has grown rapidly because it sells 100% of its car, home and single-item insurance policies without human intervention.

It recently raised $38 million (about R700 million) in its latest Series B2 funding round, which it will use in its expansion plans.

The funding round included funds from impact investor Global Impact Investor BlueOrchard and existing funders Hollard, Yellowwoods, the IFC, and Germany’s development finance institution.

North has, however, warned South African motorists about several habits that can hurt their car’s resale value.

When selling a car, South Africans want to get the best price possible. However, many people make mistakes that devalue their cars.

This means that many get less money in their pockets when they sell or trade their car in.

Skipping services and maintenance 

Servicing your car each year or taking it in for repairs when warning lights come on may seem expensive. However, small issues can quickly turn into big, expensive problems.

Buyers will pay more for a vehicle that has been well-maintained and has a full-service history.

Using authorised dealers and RMI-approved workshops for services and repairs will also boost a buyer’s confidence in a car.

Missing services may also invalidate a warranty, meaning that you won’t be covered for any large repairs.

It could also hurt your insurance claims. If accidents are linked to neglect, such as brake failure, an insurer might refuse to pay your claim because the accident could have been via reasonable care.

Not fixing small dents and scratches

Although a small scratch on a door or a dent on a bumper might not seem like a big deal, leaving these imperfections unattended could reduce one’s car’s resale value down the line.

A minor scratch can lead to rust or corrosion, decreasing a car’s value and leading to additional repair costs.

“It can also create the impression you’re not looking after your car. Even if it’s inconvenient and costly, try to get dents and scratches repaired as soon as they happen,” said North.

Another tip for those with car insurance is to consider whether the repair cost is higher than your excess and if the cost justifies risking your no-claims bonus.

If another insured driver caused the damage to your car, your insurer should be able to help you claim against them.

Losing the Paperwork

Documentation, including service records, repair invoices, and the vehicle’s handbook, is also key and increases a buyer’s confidence in one’s car.

The buyer will believe that the car has been taken good care of and that the seller is transparent about its history.

Adding aftermarket modifications

Several modifications will turn off potential buyers and decrease a car’s resale value. This is particularly true of aftermarket parts that can change one’s car’s style or performance.

Those who modify their car should keep the original parts so they can return it to its factory state when it’s time to sell.

Moreover, those with customisations should let their insurer know. If they don’t, these changes to your car could lead to the insurer denying your claim if there’s an accident.

These modifications could also lead to higher insurance premiums or even a complete denial of coverage.

Neglecting TLC

People should also take care of their cars by keeping them clean on the inside and outside to preserve their appearance and value.

Leaving it exposed to the elements is a bad idea, as sun damage, rust, faded or cracked interior finishings, and half-dents can all hurt its value.

Those who don’t park it under cover for any reason should invest in a quality car cover for added protection.

“Maximising your car’s resale value doesn’t require magic; it’s about care, maintenance, and a bit of savvy,” said North.

“By breaking these habits, you’ll not only enjoy a more reliable ride while you own it, but also ensure you’ll get the best possible price for your car when it’s time to sell.”