How important is the value of your car for insurance purposes

For sure your vehicle's value affects your insurance, but how? Find out here how the value of your vehicle impacts the price of your car insurance.

Let’s not beat around the bush, your car’s value will play a factor when an insurance provider determines the cost of your insurance. Find out what we mean by car value and how much of an impact this has on your insurance premium.

Why does vehicle value matter?

You’ve probably applied for car insurance cover that many times now that when filling out the questions it just comes as second nature to you and you don’t bat an eyelid. What you’ll find though is that when doing this, you will be asked to estimate the value of your car.

Your estimated value is important but it’s not the be-all and end-all with your insurance quote. Your estimated value isn’t necessarily what you would get back from your insurer if your car was ever written off or stolen. This is because our cars lose value over time so your insurer is likely to cover the cost of your vehicle at the time of your incident etc.

Your car’s estimated value is important for helping insurance providers determine the level of risk. For example, the more expensive your car, the more it’s likely to cost in repairs and replacing bits and pieces, which will more than likely affect your premium price.

How to work out my vehicle’s value?

If you’re not sure how much your car is worth you can always have a look at finding out an estimate on third-party websites such as Autotrader, these will be able to find an approximate value for you.

Even if you don’t agree with the value, it’s only a rough estimate. As long as it’s not way off what you think it’s worth, you should be fine.

Vehicle value and insurance

Insurance providers like to take into account various different factors when they are looking at calculating the cost of your insurance. For example, your address, occupation, and driving history are just a few of the things they consider.

They also consider the value of your vehicle too, as this has an impact on your insurance group. Your insurance group number helps providers to calculate your premium. You’ll find that your car is put into a group on a scale of 1 to 50 and generally, the more your car is worth, the more it will cost to insure.

Higher value cars: for higher value cars, insurers like to know your car has some cracking security measures in place (more than the standard ones already expected).

Lower value cars: generally owning a lower value car doesn’t necessarily mean cheaper insurance. Sometimes it can be difficult to source parts for old cars and they can be at a high risk of failure sometimes, which can sometimes lead to an accident.

car insurance value

Do I have to enter a valuation?

When you’re looking at pricing up your insurance, in the majority of cases you will be asked to estimate the value of your car. Generally speaking, the value that you enter will more than likely be the price that you paid for it.

You might be tempted to underestimate the value of your vehicle, but this probably isn’t a great idea if your vehicle was to ever be written off. Although this might work for you in helping to get the cost of your premium down, if your car was written off, you won’t get back its true value. Or, even worse, your insurance provider could find out that you dishonestly purchased your insurance and could even go as far as cancelling your policy.

Other factors to consider?

It’s not just all about your vehicle value when it comes to insurance. There are other things to consider too that can affect your insurance price.

For example, if you’re a young driver who’s not long passed their driving test, you might expect your insurance price to be through the roof given the level of risk associated with your age and driving experiences. In this instance, it probably won’t matter too much whether your first car cost you £200 or £2000. The cost of your insurance is more than likely to be affected by your lack of driving and how much of a risk you pose on the road.

It’s a good idea to mention too that your car’s value may limit the level of cover that you have available to you. The reason for this is that some insurers actually don’t like to cover a high-value car unless you take out the highest level of cover, fully comprehensive. This is a good trick to remember when you’re exploring your coverage options.

If you need to find out how much your car with worth, we’re here to help you. We’re able to give you a free, instant car valuation. We won’t even ask you for your personal details, you can keep your name, phone number and email address to yourself! Get a free quote on us and enter your reg below.

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