Brand new car - value to insure it for?

pinkteapot

rs65 wrote: »

Who have you found that doesn't offer replacement car? I thought only admiral didn't, and maybe some based outside UK.

You're right - when I looked more closely, Direct Line, Aviva and LV all offer new car replacement in the first year. So it might just be Admiral who are tight-fisted.

For the low cost though, we're going to get a 3-year gap policy anyway as it's nice to have the extra cover of going back to a new car for the first three years.

mattk_180

What level of cover did you go for? Or do they insure for any difference between the insurers pay out and invoice price?


Only reason I ask is if you only went for £5k/£10k, the cover might not be any good for you after the first or second year as the insurer pay out would significantly reduce and the GAP cover might not be enough to make up the whole difference?

pinkteapot

They do two levels of cover:

1. Invoice gap insurance - will pay out the difference between what our insurer pays out and what we paid for the car (after any discounts we got)

2. Replacement car insurance - will pay out the difference between what our insurer pays out and the prevailing full list price of a new replacement at the time.

#2 costs more, but we're going for that because (1) it's about £30 extra on a three-year policy so only £10/year, (2) I'm expecting new car list prices to go up because of the weak pound and (3) we haggled a really good deal for the car so our invoice price is low and I'm not convinced we'd pull it off again. :money:

I quoted for £17.5k cover, which assumes our insurers will pay out up to £10.5k in the first three years. I then looked at used prices of three year old models and there was a chance that £17.5k wouldn't quite be enough by the end of the policy, so I re-quoted at £20k cover, and it only added £3 to the quote!

So, three year replacement car policy with £20k cover is what we're looking at. That's ended up at slightly more than I mentioned above - around £170. Still only £56 per year and a lot cheaper than gap quotes I've had from car dealers before.

I re-quote our car insurance every year and Admiral have been cheapest (of the big names) for us for a few years now - they must like our age group or something. Assuming that continues, the saving from using Admiral will partially offset the cost of the gap insurance (if the alternative is another insurer who costs a bit more but offers one year's replacement car cover).

I wouldn't be bothering if we were buying an i10 for £8k or something, but the car we're getting is a major purchase for us and if we happened to write it off in the first few years we wouldn't have the money to hand to top up the insurance payout to get a new replacement. Once it's a few years old we're less fussed about getting a like-for-like second hand replacement.

I am of course hoping that like probably 99% of gap insurance customers, we waste this money because we never claim.