The market value of the car It is a term that you have probably heard or read in your insurance policy on some occasion. It is a concept that not everyone knows and that is of great importance when it comes to insuring the car.
If you want to know more about the market value of a car or want us to help you choose the best Insurance for your vehicle, keep reading or contact us en Euroteide Insurance (Insurance Brokers and Consultants) We will advise you on everything you need, both in terms of car insurance or any other type of insurance.
What is the market value of the car
But what is the market value in vehicles?
The market value of a vehicle is the amount that could be sold for once it has been used. After leaving the dealership, cars lose value over time and that is why new models are more expensive than old ones.
Although that is the general concept, in the field of Insurance, the market value of the car is the one it had just before an accident or theft occurred, the one you would have for sale. This value It will depend on the make, the model, the characteristics of the vehicle and its age. In addition, other elements are taken into account for its valuation, such as extra elements included. On the other hand, other aspects such as mileage or maintenance are not taken into account.
When you buy a new car, it has a specific market value and is decreasing every year I have the car. This value is used to calculate compensation for theft or total loss.
There are other concepts which may appear similar to the venal value, but have multiple differences:
- Improved Venal Value. This concept refers to a value higher than the market value initially established so that the insured will obtain more benefits.
- Value again. This value is what a vehicle has with its first registration when it leaves the dealership. It can be kept for one or two years.
- Affection value. In this case the value is a percentage applied to the market value. This percentage depends on the use the vehicle has had.
- Replacement or market value. It refers to the price at which we find a car with similar characteristics and age on the market at the time the accident occurs.
Now that you know what the market value of a car is, let's see why it is important in your Insurance policy.
How the market value of your vehicle affects the Insurance
Venal courage it is an important piece of information for all vehicle owners as most of insurance companies use this value in the event of a claim or theft to calculate compensation that they will pay the borrower insurance. There are times when the company can take as a reference value the new value or the improved market value, but they are not the majority.
The amount can be extended if there are provably installed extras.
This valuation, taking the market value as a reference, is very different from the valuations that are made in other types of Insurance, such as health or the Life in which a fixed value is established in the policy when we contract the Insurance.
Thus, if we suffer an accident with our vehicle or it is stolen from us and in our policy the market value is reflected as the value to be taken into account for compensation, It will be the value taken as a reference and on which they will pay us the amount correspondent. Therefore, knowing what the market value is and how to calculate the market value of your car is very important.
How to calculate the market value of your car
Now that we know the importance of the market value of a vehicle, the following question will arise, what is the market value of a vehicle?
The market value of a vehicle is officially established by the Government and a list with the values ordered by brands and models is published periodically. This price varies depending on the characteristics of each car and is the value used for appraisals and compensation.
The insurance company uses the published official value and reduces it by applying a percentage based on age of the vehicle according to its date of first registration, in a very similar way to the car appraisal carried out by the Tax Agency.
Thus, applicable percentages to cars according to the time since their first registration are:
- Up to one year of use: 100%
- Between one and two years of use: 84%
- Between two and three years of use: 67%
- Between three and four years of use: 56%
- Between four and five years of use: 47%
- Between five and six years of use: 39%
- Between six and seven years of use: 34%
- Between seven and eight years of use: 28%
- Between eight and nine years of use: 24%
- Between nine and ten years of use: 19%
- Between ten and eleven years of use: 17%
- Between eleven and twelve years of use: 13%
- Over 12 years: 10%
As can be seen, the older a car, the lower its market value. For this reason, insurance companies sometimes classify a vehicle that can still circulate as a total loss, since the repair exceeds the market value.
If you still have doubts about the market value of a car and why you should calculate it, Do not doubt ask us and we will help you in everything you need.
As we have seen, the market value of a car is the value it has for sale, just before an accident or theft occurs and that will depend on the make and characteristics of the vehicle. If a claim occurs, the market value is the one taken into account by the insurers to calculate the compensation to be received and to calculate it, the official published tables are used to which a percentage will be applied based on the age of the vehicle.