Friday 24 May 2019

'It makes more sense for me to rent a car than pay sky-high Irish insurance premiums'

Insurance case study

Sue Whyte who finds its cheaper to rent a car
Sue Whyte who finds its cheaper to rent a car
Sue Whyte
Eddie Cunningham

Eddie Cunningham

Insurance premiums are so high that it can be cheaper to rent a car on a regular basis. That is certainly what education expert Sue Whyte discovered after she was quoted a huge figure following an accident.

Even though she has a good job, she baulked at the cost. Now she rents a car most of the time and uses it for extensive travel around the country.

It is, she has calculated, far cheaper to rent than to run a vehicle with insurance at such prohibitive levels.

Apart from underlining the impact of soaring insurance costs and dismissing widely-held perceptions about renting a car, her experience also reflects a growing trend of people 'using' rather than owning their mode of transport.

Sue Whyte
Sue Whyte

But it was the cost of insurance that prompted Ms Whyte's ultimate radical decision. Sue (34) had been driving for years and, with that one exception, had a clean safety record.

"I had a good job but I still couldn't afford the premium they were quoting me."

So she sat down after her accident two years ago (for which she accepted liability) and, on the advice of a friend, 'did the maths'.

She could scarcely believe the figures. With a little bit of planning and shrewd use of comparison websites, she now finds herself better off renting after tax, depreciation, repairs etc are taken into account.

"I don't have to worry about a thing. I have a new car all the time, when and where I want it."

It all began with the accident in March 2015. Her car, a Kia Rio diesel, was out of commission as the damage was €5,000 and it was technically 'written off'. So when it came time to renew insurance the following month she had no car.

As a result she was classified as 'New Business'. Her premium soared from a previous, never-had-an-accident €700 (it used to be €200 but like everyone else she was victim of huge increases) to as much as €2,700.

Other companies wouldn't quote her because she had a liability outstanding. She finally got a letter of 'refusal to quote' from another company and that put her back in play with her original outlet, who in turn quoted her a sizzling price. At the time she was commuting 15km each way from Mullingar to Multyfarnham, Co Westmeath - and had to use a bicycle.

A friend told her he had worked out the figs; hiring a car would cost much the same as her insurance would be for her own. And that was before other items, such as being insured, servicing etc were taken into account.

She discovered she could hire a small car, such as a Volkswagen Polo for as little as €7-a-day or €49/week all in.

Sue, a secondary school teacher is based in Dublin now and cycles or uses public transport a lot. But her work for education and trading organisation Amazing Brains takes her all over the country for study skills workshops in primary and secondary schools. It involves big mileage; she reckons 50,000km a year.

She now hires a larger car, a Hyundai i30, from Enterprise Rent-a-Car Ireland for both the big mileage and to bring materials with her.

And it costs? "It costs €3,000 a year all in. That's everything covered. Everything. Insurance, tax and I don't have to worry about anything going wrong, or punctures. Sometimes I hold onto a car for months. Sometimes I change more frequently. I have to leave it back for a check over after every rental period. That means it's cleaned as well. Then I can choose a newer model if I want to. Typically I hire a car for a month at a time but in reality I have one nearly all the time." She deals with the Long Mile Road office of Enterprise.

But is there not a lot of other paper work and checking? "Not at all. I have often booked a car at 3pm and picked it up at 4pm. If I give better notice they will pick me up and bring me to the car. And drop me home after I leave it back."

One of the few stipulations is that the car is left back with a full tank of petrol. She emphasises that she keeps right up to date with the best deals by using comparison websites.

Apart from insurance, the big saving is deprecation. A car covering 50,000km a year would easily fall in value by €2,500/€3,000 a year initially. And there is no NCT to worry about, no road tax - the list goes on.

Which explains why, for the equivalent of €60-a-week (plus fuel costs, of course) she doesn't see why she should bother going through the process of trying to get insurance quotes for a car of her own.

The irony is she made all these discoveries due to difficulties getting a realistic insurance quote in the first place. "I never thought of rental. You think of it as something you do on holidays. If you're cute and live in Dublin you can do this, though I did it when I was coming up from Mullingar for a while too.

"I have use for a car five-to-seven days a week. I tend to keep it over the weekend for convenience and for driving down to see my parents."

Her experience with the insurance industry has yielded many lessons and criticisms, especially how dealings with it can be a protracted, expensive business.

"It's manic when you're paying more for your insurance than you are for your car. I don't see any reason to stop hiring. It's just bizarre how convenient it is."

George O'Connor, MD of Enterprise Rent-A-Car Ireland, says: "Sue's story shows how out of synch our car insurance market is when a single lady who works full-time cannot afford her car insurance due to failures within the system. This matter is serious and is something our company has actively engaged on with government groups."

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