Second-hand Car Prices and How This Effects Your Insurance
Updated: Sep 12, 2022
Retail value top-up cover is an extension on your insurance that allows the payout of a claim to reflect the current market value of your vehicle in the case of loss or theft. Clients are given three options (reflected as percentages e.g. 15%) to increase the retail value of their vehicles. This extension is only applied in the event that the prevailing value of the vehicle is higher in market value than retail value.
Recently, trends in the motor industry have been out of the norm. Due to recent catastrophic events, the motor industry has been experiencing supply chain disruptions as well as a shortage of spare parts and computer chips. As a result, second-hand vehicles are increasing in price rather than decreasing (as is usually the case). This means that the average value of vehicles are now higher than those expressed in industry guides. The table below depicts the estimated retail value variance:
But what does this mean for insurance? Because the value of vehicles are currently worth more in market value than stated in industry guides, retail value top-up cover is beneficial. You may find yourself underinsured as retail values from industry guides are no longer accurate. If you would like to discuss this with your broker, feel free to give us a call. Alternatively, you can make use of our WhatsApp bot at 066 166 0261. Send the word “Hi” to get the chat started!