What do you consider when buying a car? Is it the maintenance, model or price?
One of the first things people look at is a car’s value or worth – if they can afford the new set of wheels or not. The next step would be getting insurance, and again the value of your car will come into question. This underlines the importance of understanding this aspect – not only when you’re buying or selling, but also when insuring your car. The replacement value should be agreed upon to establish the monthly premium.
The business of insurance can be tricky if you are not familiar with the jargon. Not understanding your policy schedule could make you accept terms and conditions that will confuse or penalise you at a later stage – possibly putting you in unfortunate situations. It is therefore imperative to understand your insurance policy, as well as the different value levels your car can be insured for. This will make it easy for you to know how much you are covered for in the event of an accident.
Levels of value:
Trade value – This is the average price a dealer would pay you for your car when trading it in. This is the lowest value at which your car can be insured for.
Market value – This is the average between the retail and trade value of your car and is therefore lower than retail value.
Retail value – This is the highest value at which you can insure your car at. It represents the average price a car dealer would sell the vehicle for, taking its age, condition and mileage into account.
It is important to consider these values in order to know what you would get in the event of a total loss. When an incident causes extensive or costly damage to your vehicle, it’s possible that it could be declared a total loss or write-off.
When taking up car insurance with MiWay, you will be given the option to either insure your vehicle for its retail, market or trade value – or in certain situations, a special agreed value which is noted on your policy coversheet. This is the value you will be paid out when you claim, less the excess payment.
There is nothing worse than selling your car for a price that’s below its value. So, to avoid this, contact us and make sure your vehicle is insured sufficiently!