Car Insurance and Depreciation

MerseySwede

Dear all; I'll come straight to the point.

If you buy a new car it is given an insurance group bracket and the cost of insurance is based on this bracket ergo the higher the insurance group for the car the higher the insurance premium we pay. There are other factors such as age of driver, no claims bonus etc but for now I want to discuss the insurance group.

As a car ages it depreciates in value but the insurance group stays static so we are still paying a high premium despite the depreciation of the car and, in the event of write off, a lower payout.

For example, my car is a 12 year old Volvo 850 which, when purchased new costed circa 23k and is insurance group 12. When I bought it a year and a half ago I paid £800 yet is costs me nearly £500 a year to insure despite 7 years protected no claims bonus, no points, a license holder for 23 years and married with a mortgage AND use of company vehicles (which are unmarked Police cars!)

Can anyone explain to me why my car, indeed any car, retains its original insurance group category and does not depreciate over time as the car value depreciates over time?

Also, if you cannot give a reasonable answer do you think this is a cause worth championing because I certainly do.

I look forward to reading your comments.

Sincerely yours

Sandoval

1. You're posting this in the site Questions & Suggestions forum, it should be in the Motoring forum for a better response.

2. I would imagine cars remain in one insurance group because insurance is not simply calculated by a vehicle's value, but also by engine size, performance etc which does not change.

3. No, it isn't a cause worth championing. Even if it was, you're not going to bring about a complete overhaul of the way car insurance is calculated in this country.

kermitfrog

http://forums.moneysavingexpert.com/forumdisplay.php?s=&daysprune=&f=70

Premier_2

The insurance grouping is not the only think that sets the price. Amongst others are the age & value of the car so your concerns are already addressed.

But if you want to champion a lost cause, go ahead. Facebook is here:
http://www.facebook.com

:rotfl:

forgotmyname

Amusing...

Insurance category is mainly based on cost to repair after an accident, Theft is it likely to get stolen?

The cars value only affects the premium a tiny amount, I have insured expensive cars for far less than some
cheap bangers i have bought in the past.

dunstonh

If you hit a £60,000 car and write it off, it doesnt really matter if you are in a £500 car or a £20,000 car. Just as injuring someone, the cost is in the injury and not the car which is tiny by comparison.

Older cars also suffer from more expensive parts as bits go out of manufacture (or at least to a reduced level or require importing specifically) and older cars are more prone to breaking down and causing an accident.