Market value of a car

izzy eckerslike

izzy eckerslike

izzy eckerslike

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Joined
16 Oct 2007
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Worcestershire
Just bought a car and the salesman tried in vain to sell me insurance to ensure that should I write off the car then I would be able to buy another same spec/year car at the current retail price.
When I questioned this he said insurance only pays out the trade price so if you have just paid £10,000 and write it off next day you would only get around £8,500 or even less .

Looking at my insurance it says I would be paid 'the full market value' so I'm not sure exactly how they interpret that. Anyone had experience of claiming ?
 
You get market retail price with an typical insurance policy, after a bit of leg work. They should not offer you trade as it's unreasonable to expect you to buy at trade values.
 
What he was trying to sell is a GAP policy. Not normal insurance.

This sort of policy will pay out the difference between your normal insurances payout and either the outstanding finance amount if higher or the price you paid for the car. Can be useful in a fluctuating market.

When I bought my Mondeo ST I bought the gap policy for £400. This covered me up to the retail price paid for 3 years.

eg. Paid £14500. Written off in year 2 and market value has plummeted to £7700. Gap policy pays out difference between the 2 allowing me to buy an equivalent car at todays rates. There are terms like it must be non-fault etc.

I have a gap policy on my current Audi which covers me to the outstanding finance value.

eg. Buy car for £8k. After 6 months I owe £7500 (Joys of interest) but the car is only worth 6k in good condition due to a sinking market. If the car is written off, the gap policy will clear the difference between normal insurance payout and the amount owed ensuring that I am not lumbered with still owing money on a car that has gone. Total cost for this was £200 over the 4 year term and is paid for as an extra payment at the end of the finance deal and is not added to the loan so does not accrue interest.

Like all insurances, read the small print to see what it covers but I personally I have had it a couple of times as do some friends of mine. (1 of them wrote off a Focus ST-3 and claimed back nearly £4k from his gap policy!)
 
ShadowMan said:
When I bought my Mondeo ST I bought the gap policy for £400. This covered me up to the retail price paid for 3 years.
Click to expand...

And you got ripped off.

Never, ever, ever buy GAP from a dealer. It's a massive money spinner for them with a huge markup. You can buy it online yourself for literally a third of the price.
 
gap insurance only seems worthwhile if you are buying a brand new car or get lots of finance (with interest).

Although i suppose it always depends laregly on the value of the car.
 
[TW]Fox;18165496 said:
And you got ripped off.

Never, ever, ever buy GAP from a dealer. It's a massive money spinner for them with a huge markup. You can buy it online yourself for literally a third of the price.
Click to expand...

Interesting... a Return To Value policy paying up to £5000 for up to three years on a £13000 car will only cost £129 with Click4Gap. Certainly pays to shop around! :)
 
Yes, it was a gap policy for £375, I never looked into this before but maybe some car insurances have this option at additional cost in the way that house contents insurance can have new for old cover ?
 
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