Buying a car has been an option people frequently go for rather than purchasing two-wheelers. The cars bought can be either brand new or used. Individual preferences play a great role while deciding either to buy a new car or a used one.
A car valuation is done to find out the estimated value of the vehicle and is beneficial for both buyer and seller. In addition, it helps both parties to negotiate the price if they feel that the deal being offered is not up to their expectations. The global car insurance market is $739.30 billion in 2019, and is projected to $1.06 trillion by 2027.
Further, car valuation plays a significant role if the car meets an accident or gets stolen. If the individuals are aware of car valuation in these scenarios, they can easily negotiate with the insurer to get a fair amount for the vehicle. Overall, the market size for used cars is $160.4bn in 2021.
How is insurance determined based on car valuation?
- The cost of the car determines the policy’s price: More expensive vehicle requires a more costly insurance policy so that in case of any damage, the amount is covered under it. Parts of such cars are high priced, and they have a high chance of getting stolen and vandalised.
The type of insurance is further influenced by the car’s worth, even if it is a pre-owned one. In addition, certain policies do not cover all the costs. Therefore, to choose the appropriate policy, car valuation is necessary.
Certain online tools are available to check used car prices. OBV is a reliable tool for doing the same and is trusted by numerous users. The website makes it easy to go through used car valuation, only general details.
- The price of the car also influences the insurance group: While insuring the car, insurers place it in the specified insurance group according to its price value. A higher car price requires a more expensive insurance policy.
Altering or changing certain parts of the vehicle, like the engine, can further lead the car to escalate to the higher insurance group making the policy more expensive than before.
The insurance group of a particular car is determined by the repair costs, whether the parts of that particular model are available and whether the safety features are present or not. Therefore, car valuation makes it an easy task to find out the vehicle’s cost and hence get an idea of the insurance group and the respective price.
- Switching the car to an expensive one hikes your insurance policy price: The individuals can easily switch to different insurance as they change their cars, but it further has high chances to increase the policy cost. It happens when it becomes difficult for the insurers to cover the car due to “high risk” and the policy cost hikes.
While switching the policy for the new car, one has to contact the insurer and get some idea about the policy’s price. Factors determining the worth of a car are the size of the engine, mileage (in case of buying a used car), type of engine, and colour of the car.
OBV App a used vehicle valuation app gives the person price that car holds according to its condition and considers other factors. Switching the car with a used one can also hike the policy price due to the aforementioned factors.
- The amount may get written off by the insurers: If the car’s repair cost is not worth paying, the insurance companies write off the cars. It generally happens in the case of old models and used cars. The amount offered is according to the vehicle’s market value at the period it got damaged. The value for which the car was bought is not considered.
Certain insurance companies rely on independent firms to set the value of cars and apply their estimates while writing off the vehicle.
Individuals may challenge the insurers if they find the deal inappropriate or against their expectations. They must have enough evidence to prove their claims. Try getting abundant notes from different sources and making notes of any changes made.
Different policies are available that enable the people to cover almost all the price of their car. But remember, these policies cost much compared to the standard ones. Moreover, some may be applicable only if the vehicle has some unique function or some extraordinary modification.
Other determinants of the car’s policy are the person’s age, vehicle model, job title of the person, claims history, annual mileage of the car, postcode of the person, and modifications made in the car.
Generally, insurances are more expensive for young people as they tend to have more accidents and hence file more claims. Insurance in the cities is more expensive due to high traffic and more theft.
Ensure all the factors are correct and remember to get in touch with the insurer to get an idea about all the policies and then select the appropriate one for the car.