Lowcost car insurance offered in trial

AUCKLAND: An insurer has paired up with a charity to trial offering lowincome earners car insurance for a flat $8 per week premium.

People who borrow via Good Shepherd's no or lowinterest loan scheme to buy a car will now also gain access to lowcost car insurance via Vero.

Good Shepherd and Vero have been working on the trial since 2018 when they found common ground at a financial inclusion industry forum hosted by the Government to get the industry talking about how to get products to New Zealanders who were missing out.

Fleur Howard, chief executive of Good Shepherd, said it had become concerned about how many of its clients were borrowing to buy cars but were not insuring them.

Ms Howard said for those who could not afford to pay car insurance or the excess on a claim, the financial fallout could be enormous.

A car accident could be a double blow as clients could also lose the ability to get to work.

Those who apply for a loan through Good Shepherd have to earn under a certain amount to be eligible. For singles, that is under $42,106, and for a couple with no children it is $43,784. A family with two children can earn up to $53,480.

The charity offers interestfree loans of up to $1500 and charges interest of 6.99% per annum on loans up to $10,000 for those who qualify.

The trial will run for 12 months. — The New Zealand Herald