Possibly stupid car insurance question

rwa_2

Hi Guys,

First time poster here, I thought you folk might be the best to answer this potentially ridiculous question.......

I bought a car 5 years ago for £3000 and insured it at that value. For each renewal since I've never even thought about depreciation in the value of my car and therefore my insurance is based on a £3000 value.

If, for instance, my car is now worth £500 should I amend my insurance accordingly? If the car got written off would I get £3000 worth of car as a replacement or would I get a £500 car as a replacement?

I'd hazard a guess that it'd be the latter so I should probably get some new quotes done.

As I said, this is probably a very ridiculous question and I've been stupid for not amending my policy for so long?

For reference, my policy is with elephant.

lisyloo

If, for instance, my car is now worth £500 should I amend my insurance accordingly?

Yes you should.
For one thing it will be cheaper.

Also you should consider changing from fully comp to 3rd party fire and theft or 3rd party only.
At £500 your car will be written off in the smallest of accidents and you'll get back the deemed value (which is usually lower than you expect) minus excess, so it will be next to nothing. Plus as there is no garage repairing you car, you won't get a courtesy car.

My car is worth about £500 and I am 3rd party only as I see no value in being full comp to get a few pennies back and no courtesy car.

If the car got written off would I get £3000 worth of car as a replacement or would I get a £500 car as a replacement?

You would get a cheque to the value of your old car.
V_Tricky recently posted and article about how this is calculated but in general people are dissapointed, so in general you'll get less that you think your car is worth (as a cheque).

lisyloo

Here is the post

http://forums.moneysavingexpert.com/showthread.html?t=709265

It say you are entitled to "market value" but insurers do try to "swing the lead" a bit and often you have to fight for a decent value.

rwa_2

SECOND STUPID QUESTION ALERT!

where would one find out the depreciated value of a car? £500 was a guess.

BTW thanks lisyloo for the quick response.

mattymoo

Parkers price guide. www.parkers.co.uk iirc

lisyloo

This isn't free if your car is older than 1997.

Another way to find it is to look in autotrader for similar models/age/mileage.

darich

mattymoo wrote: »

Parkers price guide. www.parkers.co.uk iirc

Parkers is notoriously unreliable in my experience.
Part exchange value for my car is, according to Parkers, £8055.
But when i talk to dealers, i've been offered, £7400, £7000 and £6500 twice.
If parkers is the average price then that means that other owners of cars like mine have been offered values close to £9500. But that's no where near the part exchange price - it sells privately for around £7800.

Best way is to check autotrader and www.compucars.com and compare your car with others of the same age and mileage.

mattymoo

Probably why the trade call it Hans Christian Anderson then
I posted it though because at this age, the variation in price is usually less. Didn't realise it wasn't free though.