Insurance, vehicle value and expensive repairs

mbrijun

Hi,

I got an old "first car" for my daughter which needs some pricey repairs, such as a cambelt and a clutch change. Each of those repairs is about 30-50% of what I paid for the car. I don't mind making an investment, as I intend to use the car for another 3-4 years. However, I am worried about what the insurance would pay out in case of an accident. That being an old card I imagine the likelyhood of a write-off is quite high.

I would be grateful for some insights into this matter. Thank you.

daveyjp

You never nake an jnvestment with an old car, they eat money.

If an old car is in an accident causing structural  damage chances are it will be written off as insurance claims are expensive, but remember for minor non structural damage getting cars fixed yourself is significantly cheaper than going through insurance.

mbrijun

@daveyjp - thank you for responding. I used the word "investing" in a broad sense - I put in the money, my daughter gets to drive it, no repairs - no driving. If the car was to be written off, how would the insurance determine the "market value"? There are plenty of similar age cars with worn clutches and cambelts in need of replacement. Could I insist that a reference car would have to have all these things done?

GrumpyDil

Those aren't repairs though, they are ongoing maintenance costs. Hopefully what you paid for the car reflected at least the timing belt element if it was nearly due.

That said the valuation in the event of an accident write off would be based on your car, it's age and having an MOT.

Don't know if it helps but I am currently running a 19 year old Matiz. It's worth nothing but I did the timing belt last year, need to replace the rear exhaust now and replaced the front windscreen earlier this year. Total spend around 450 which I wouldn't get back if it was written off but it's a good runner with no major issues (aside from difficulty in getting spares if anything breaks). 

born_again

mbrijun said:

Hi,

I got an old "first car" for my daughter which needs some pricey repairs, such as a cambelt and a clutch change. Each of those repairs is about 30-50% of what I paid for the car. I don't mind making an investment, as I intend to use the car for another 3-4 years. However, I am worried about what the insurance would pay out in case of an accident. That being an old card I imagine the likelyhood of a write-off is quite high.

I would be grateful for some insights into this matter. Thank you.

Perhaps that is where you went wrong.

Insurance does not cover things like this, they just value the car on the going rate at best.

tacpot12

The likelihood of it being written off, if she has an accident, is very high. But you can provide receipts for parts you have replaced recently to the insurer and hope that they recognise that the market value of the car is higher than average. 

Having her drive an older car is a good idea. As a new driver she is more likely to have an accident, and while a more expensive car might not be written off, she will be without a car while it is repaired. Running a cheap car, and saving for its maintenance and/or replacement would allow her to just buy a new older car while she waits for the insurance payout.

I would make the investment in it. (I run a 17 yo Ford Mondeo which has just been to Denmark). 

mbrijun

GrumpyDil said:

Those aren't repairs though, they are ongoing maintenance costs. Hopefully what you paid for the car reflected at least the timing belt element if it was nearly due.

I don't buy cars that often, so cambelt was an oversigh, if I am honest. The problems with the clutch was apparent when viewing the car, so I got a discount there. In hindsight, it could have been a bigger discount.

born_again said:

Perhaps that is where you went wrong. Insurance does not cover things like this, they just value the car on the going rate at best.

What could I do better, going forward?

tacpot12 said:

The likelihood of it being written off, if she has an accident, is very high. But you can provide receipts for parts you have replaced recently to the insurer and hope that they recognise that the market value of the car is higher than average.

That's my hope, but I recently read that insurers are routinely underpaying drivers, and many of them have to go to the Ombudsman as a result.

tacpot12 said:

Having her drive an older car is a good idea. As a new driver she is more likely to have an accident.

My thoughts exactly. I guess this is the case where some financial hit is just inevitable, one way or another.

400ixl

Insurance will make the assumption the maintenance is up to date and the car is in good working order unless something tells them otherwise. Same as they take little notice of added options etc.

It's is the down to specifics model, year, condition and mileage to determine the price.

So whether it has a brand new cambelt because it was due or a 60k one because it was still in its service window makes no difference to the price they pay out.

Aretnap

In the event of a write off you will get little of any credit for work you've done maintaining a car I'm afraid. 

Any old car that's still running will (almost by definition) have had a fair amount spent on maintaining it over the years, and will have some new or nearly new parts. And by the same token it will almost certainly have some other parts which are coming towards the end of their lives and which will present you with a significant bill in the next year or two. These things are already assumed in the valuation. It makes little difference whether you're at the stage of just having had some work done, or just waiting for the next thing to go wrong.

The car would be valued in terms of what it would cost to buy a car of the same age and in the same mechanical condition - not in terms of what it would cost to buy a car of the same age and then replace a load of parts. So the question of valuation is basically what's the difference in selling price between "twelve year old car" and "twelve year old car with new clutch and cambelt". Not a lot I would suggest - and certainly less than the actual price of replacing a clutch and cambelt.

In fact that overstates it. As all old cars have some new parts, the real question is what's the difference in selling price between "twelve year old car with new clutch and cambelt" versus something like "twelve year old car with lots of miles on the clutch and cambelt, but a new exhaust and brake pads"? I'd suggest that the answer to that question is probably as near to zero as makes no odds.

The good news is that most cars, even those driven by young people, don't get written off. So in deciding whether it's worth having the work done I'd be thinking about the age of the car and how it affects the remaining lifespan well before I worried about the insurance aspects.

bluelad1927

The market value assumes a maintained car. Unless you got the car dirt cheap because of what it required you'll never see the money in a claim. This is just the life of a motorist.

I wouldn't over think it. A freshly serviced new car  with new brake pads and a couple of tyres could easily be over £1000 and get written off the following day with none of the above being taken into account

lincroft1710

mbrijun said:

.

That's my hope, but I recently read that insurers are routinely underpaying drivers, and many of them have to go to the Ombudsman as a result.

Nothing new!


Over 40 yrs ago the then Mrs Lincroft had her car written off. The insurer's offer was far too low and i had to do some hard negotiating to get an acceptable (but not generous) payout.