When renewing or applying for car insurance, one of the things the insurer will ask about is the value of your car.
In this post we’ll discuss how you can find out your car’s value for insurance purposes. We’ll also outline how your car’s value might affect how much you pay for your cover.
Why Do Car Insurance Companies Need To Know Your Car’s Value?
Your car’s value is one of a number of factors your insurer will use to calculate your insurance premiums. Generally speaking, the higher your car’s market value, the more it will cost to insure. This is because:
- Repairs and replacements will cost a lot more for high value cars
- Thieves may be more likely to target high value cars than cheaper models
Every car in the UK belongs to one of 99 insurance groups. A car’s market value is one factor that determines which insurance group it belongs to. The higher the insurance group, the more your cover will cost. You can read our full guide to insurance groups.
Do I Tell Insurers My Car’s Original Value, Or Its Current Value?
Some insurers will ask you to specify how much you originally paid for your car.
Others will ask you to enter your car’s current market value, as a car’s value will depreciate over time.
It’s important to be as accurate as possible when providing insurers with a car valuation. You might be tempted to enter a lower value in order to get a cheaper premium. But this could backfire in a number of ways:
- Inadequate payouts for repairs or replacements
If you’re involved in an accident, and your car gets written off, you may not be covered for the car’s true value. You may end up out of pocket, and you struggle to afford adequate repairs or replacements. - Policy cancellation
If your insurer finds out that you intentionally undervalued your car, they may cancel your policy. This will leave you without any cover at all, and you may then struggle to find another insurer willing to cover you.
How To Find Out Your Car’s Value
There are a few things you can try to get a car valuation:
Online Valuation
Many online sites offer free car valuations, including:
Note: Often, you will need to supply your mileage along with your car’s registration.
Online Car Listings
Search for your car’s make and model on listing sites like:
- eBay
- Autotrader
This will give you an idea of how much cars similar to yours have been selling for.
Dealership Quote
Contact a dealership and ask them for a quote. Any second hand dealership will be able to give you a quote, but you might look for a dealership that specialises in your car’s manufacturer.
Insured Value vs. Market Value
The amount for which your car is insured may differ from your car’s market value. This is because all car’s depreciate in value over time. Your car’s value can be affected by factors like:
- mileage
- modifications
- your MOT history.
To account for this depreciation, if you’re involved in an accident and your car’s written off, insurers may pay your car’s current market value, rather than the value you declared when you took out your policy.
If you’re worried about making a loss, you could get added GAP insurance for your car. This can cover you for the difference between the amount you paid for the car, and its current market value.
Get Comprehensive Car Insurance From Go Girl
At Go Girl, we specialise in driving down the cost of car insurance.
If you’re a new driver or a young driver, we can get you the comprehensive cover you need at a price you can afford.
