South Australia recently reported an alarming increase in the number of motorists driving an unregistered car. Around 2,000 motorists per month are now being detected in South Australia driving an unregistered vehicle. We can only imagine similar statistics exist in all states.
What does this have to do with Financial Planning I hear you say?
The answer lies with the fact that motorists driving an unregistered vehicle run the risk of losing everything, including their house.
One of the components of motor registration is the premium of compulsory Motor Injury Insurance. This is the insurance coverage that pays compensation to people injured in a motor vehicle accident.
Those who do not register their vehicle, do not have this insurance cover. This could mean that in the event of a motor vehicle accident, where another person was injured, the owner of the unregistered motor vehicle could become liable for the compensation amount that would normally be paid by the Motor Injury Insurance provider.
To put some perspective on this subject we highlight the accident in 1986 involving high profile Australian actor John Blake. He was ultimately awarded $7.7 million in compensation as a result of a car accident.
If this compensation could not be paid by the Motor Injury Insurance because the offending vehicle was not registered, the liability would most likely fall to the vehicle owner which would more than likely result in bankruptcy for most.
Risk management is a key plank of any good financial strategy. Failure to register a motor vehicle puts at risk an individual’s assets.
As part of your overall financial health, we recommend that you double check to ensure that your vehicles are registered.
Note: Advice contained in this article is general in nature and does not consider your personal situation or needs. Please do not act on this advice until its appropriateness has been determined by a qualified adviser. While the taxation implications of this strategy have been considered, we are not, nor do we purport to be registered tax agents. We strongly recommend you seek detailed tax advice from an appropriately qualified tax agent before proceeding. The information provided is current as at August 2011.