Direct Line Car Valuation for Write Offs

Kairoo86

Here is a summary of the situation which is fully explained below: Direct Line use Glass's Guide for valuation and buy replacement cars from Arnold Clark, but Arnold Clark use Cap guide for valuation which has a higher price than Glass's. Has anyone else encountered problems with Direct Line offering low values for your written off car?

Full explanation:
My car was recently written off through no fault of my own and I am now at the stage of negotiating the amount that Direct Line will pay me for it. Their evaluator called me and gave me a price which I said sounded a bit low so he immediately increased it by £250 so I said I would go and do some of my own research and call him back.

I found similar vehicles in same condition, age etc. for £400 to £700 more on AutoTrader and a salesman at Arnold Clark kindly checked the Cap retail price for me which is £630 more than what the evaluator suggests. I presented all this information to him and am currently waiting for him to arrive at his office and call me back.

He told me that Direct Line, and supposedly the financial ombudsman, use Glass's guide which he says is what he based his valuation on. But I was told by Direct Line that if I choose to let them buy the new car for me then they will buy it from Arnold Clark, so straight away there is £630 difference between the amount Direct Line will give me and the cost of a matching replacement car from Arnold Clark.

InsideInsurance

Yes, they will have a commercial agreement with the supplier for a standard discount thus allowing them to give you a car that is advertised at more than what the cash settlement offer is but actually pay AC less than what the cash offer to you is.

http://www.financial-ombudsman.org.uk/publications/technical_notes/motor-valuation.html gives you guidance on how the FOS deal with valuations

Kairoo86

Thanks for the FOS link, it appears that the figures that are used to assess the vehicle value come from the guides and that values on AutoTrader etc. are not taken into consideration.

I had thought the same about Direct Line having and agreement with the supplier (Arnold Clark) but the explanation by the Direct Line staff was that I would negotiate one price with the evaluator which I could accept as cash or ask Direct Line to get another car of that value (or upgrade by adding my own money), but either way it is apparently up to me to negotiate the price that will be paid with the supplier. That makes their replacement service seem a bit pointless but they said themselves it just saves me waiting for a cheque!

forgotmyname

Does it matter?

They could give you £10,000 and you goto AC and buy a car for retail money.

Or they offer you £9000, but they will deliver the same car to you for no extra money.

The fact they have a deal with AC that gives them a decenbt discount doesnt mean much.

Unless you can take the payout and haggle AC down on the price or get one cheaper elsewhere. The option is yours.

£400 - £700 more on the Autotrader site. But thats only the advertised price. Most people will haggle that much off the price.

Kairoo86

They do not have any deal that gives them a discount. So Direct line value the car at approx £6000 but AC value it at approx. £7000, therefore it is impossible for me to take the £6000 offered by Direct Line to purchase a vehicle of equal age and mileage to my own because AC value it higher than DL do.

I have since managed to sort it out with the evaluator and convince him to increase his valuation but this is something for others to beware of that your insurer may try to pay out significantly less than what your vehicle is worth unless you do your own homework and argue for a higher amount.

InsideInsurance

Kairoo86 wrote: »

They do not have any deal that gives them a discount. So Direct line value the car at approx £6000 but AC value it at approx. £7000, therefore it is impossible for me to take the £6000 offered by Direct Line to purchase a vehicle of equal age and mileage to my own because AC value it higher than DL do.

They will have a deal with them, its just done in a different way to what I guessed. There will without any doubt be a kickback be that a flat percentage of each sale or an annual amount based on the total sales.

When you get a prepaid credit card/ gift card for Currys for example for £1,000 to replace electronics that were stolen. It will be charged with £1,000 but the insurer will have only paid Currys £800 or so to get it.

forgotmyname

If there is no deal with them whats the incentive to get a car from them for you?

There will be some deal. Maybe DL pay less and buy the car with no warranty and DL will cover that?

But if DL are offering you £6000 or a car on display at AC thats priced at £7000 whats the issue?

Even if DL offer you £6800 you could still be out of pocket if you but the car for £7000.