Motor insurance: why declare vehicle value if insurer won't use it but will reassess 'market value'?

[Deleted User]

Ebe_Scrooge said:

SouthLondonUser said:

but there is some genuine wiggle room when assessing the value of a used vehicle, especially one that is not so common

This is where the Agreed Value policy comes into play, as stated by caprikid.  It's very commonly used on classic cars, or rare cars, where it would be genuinely difficult to assess the current market value.  The policy costs more than a "standard" policy, and there's quite a few hoops to jump through to arrive at/prove a realistic value that's agreeable by both parties.

Must admit, every time I get an insurance quote, I stick in the reg number and it gives me a value, which I just accept.  Admittedly my cars are always very ordinary, standard, run-of-the mill cars and always quite a few years old when I buy them.  Where you do hear of problems is for instance with a brand-new car - if you buy it for £20,000, it loses a couple of grand the moment you drive it off the dealer's forecourt as it's no longer brand new.  Hence the popularity of Gap Insurance.

Depends on the insurer, I have been with a couple who agreed a new replacement in the first year (as car was bought in a December and insurance renewed in February), so I got a deferred GAP policy for that year then had GAP for 4 extra. Now it just seems to default to market value whatever that is, hopefully never need to claim on it

Sandtree

Deleted_User said:

Ebe_Scrooge said:

SouthLondonUser said:

but there is some genuine wiggle room when assessing the value of a used vehicle, especially one that is not so common

This is where the Agreed Value policy comes into play, as stated by caprikid.  It's very commonly used on classic cars, or rare cars, where it would be genuinely difficult to assess the current market value.  The policy costs more than a "standard" policy, and there's quite a few hoops to jump through to arrive at/prove a realistic value that's agreeable by both parties.

Must admit, every time I get an insurance quote, I stick in the reg number and it gives me a value, which I just accept.  Admittedly my cars are always very ordinary, standard, run-of-the mill cars and always quite a few years old when I buy them.  Where you do hear of problems is for instance with a brand-new car - if you buy it for £20,000, it loses a couple of grand the moment you drive it off the dealer's forecourt as it's no longer brand new.  Hence the popularity of Gap Insurance.

Depends on the insurer, I have been with a couple who agreed a new replacement in the first year (as car was bought in a December and insurance renewed in February), so I got a deferred GAP policy for that year then had GAP for 4 extra. Now it just seems to default to market value whatever that is, hopefully never need to claim on it

Its by far the majority but there are some extra T&Cs about being the first registered keeper etc which causes problems with pre-registered cars that most would consider "brand new" but don't qualify under the terms.

Shakin_Steve

Ebe_Scrooge said:

SouthLondonUser said:

but there is some genuine wiggle room when assessing the value of a used vehicle, especially one that is not so common

This is where the Agreed Value policy comes into play, as stated by caprikid.  It's very commonly used on classic cars, or rare cars, where it would be genuinely difficult to assess the current market value.  The policy costs more than a "standard" policy, and there's quite a few hoops to jump through to arrive at/prove a realistic value that's agreeable by both parties.

Must admit, every time I get an insurance quote, I stick in the reg number and it gives me a value, which I just accept.  Admittedly my cars are always very ordinary, standard, run-of-the mill cars and always quite a few years old when I buy them.  Where you do hear of problems is for instance with a brand-new car - if you buy it for £20,000, it loses a couple of grand the moment you drive it off the dealer's forecourt as it's no longer brand new.  Hence the popularity of Gap Insurance.

It loses more than a couple of grand. If you pay £18K for a new car, that's £15K+VAT. The minute the car is registered and driven off the forecourt, as you say, it probably loses another couple of grand, so we're down to £13K now, a loss of £5K.

SouthLondonUser

BTW, on the topic of algorithms gone crazy, there are now algorithms buying used cars for more than they're worth new. Yes, chip shortage supply delays yadda yadda ya, yet we're talking about a Honda Fit (as the Jazz is known in the US), not a uniquely customised Porsche! (The example is in the US)

https://www.theverge.com/22923871/carvana-pandemic-used-car-prices-sold-online-chip-shortage

[Deleted User]

Shakin_Steve said:

Ebe_Scrooge said:

SouthLondonUser said:

but there is some genuine wiggle room when assessing the value of a used vehicle, especially one that is not so common

This is where the Agreed Value policy comes into play, as stated by caprikid.  It's very commonly used on classic cars, or rare cars, where it would be genuinely difficult to assess the current market value.  The policy costs more than a "standard" policy, and there's quite a few hoops to jump through to arrive at/prove a realistic value that's agreeable by both parties.

Must admit, every time I get an insurance quote, I stick in the reg number and it gives me a value, which I just accept.  Admittedly my cars are always very ordinary, standard, run-of-the mill cars and always quite a few years old when I buy them.  Where you do hear of problems is for instance with a brand-new car - if you buy it for £20,000, it loses a couple of grand the moment you drive it off the dealer's forecourt as it's no longer brand new.  Hence the popularity of Gap Insurance.

It loses more than a couple of grand. If you pay £18K for a new car, that's £15K+VAT. The minute the car is registered and driven off the forecourt, as you say, it probably loses another couple of grand, so we're down to £13K now, a loss of £5K.

A loss only in if you view a used car as an asset which you hope to sell in the future. If I buy a bottle of wine and drink some of it, it's not going to be worth what I paid for it in the supermarket. If you buy a car to run until it becomes BER then whatever "loss" is a fiction for people who care about such things