Comprehensive Insurance - Market Value, or Agreed Value?

redgymhero on 15/02/2021 - 17:11
Last edited 16/02/2021 - 09:31

Hey everyone,

I'm buying a second hand car at the end of the week. Am shopping around for insurances, and am stuck trying to decide between getting a comprehensive policy for Market Value, or Agreed Value.

The car I'm buying is a 2011 VW Polo, purchasing it for about $14,000.

Should I go Market Value and get a lower premium? Or should I go for Agreed Value and go for full $14,000 worth of cover?

I'm a bit wary about Market Value, I've heard insurances may depreciate your car value FAST.

What would you do, personally?

Thanks so much in advance :))

Update: called them up and asked to change it to $14,000 Agreed Value. Was advised that according to their systems, the maximum amount they could insure it for was $7,000…Guessing I'll shop around for another provider??

Update 2: called up another provider and was advised they won't do Agreed Value for my car. Will call Shannons in the morning!

Update 3: Going for AAMI with highest agreed value I can get: $11,700. Thanks all!

Automotive Car Insurance Insurance

Comments

  • Unorthodox on 15/02/2021 - 17:18
    +4

    It's generally better to with agreed value as there's no contention at claim time.

    Market value is difficult because even though you can use Redbook or historical sales/current average listing price, the insurance company may play hardball.
    Also worth considering your KMs, any additions to the car and whether you can find comparables now and in the future.

    • redgymhero on 15/02/2021 - 17:46

      The comparables is an excellent point. It has sub 80,000k's, which is quite rare.

      Hearing the insurance lady explain to me on the phone how they calculate market value, I was already getting some small alarm bells going off in my head.

      I think I'll call up tomorrow and ask to change to Market Value. Thanks a lot :))

  • Richardc on 15/02/2021 - 17:20
    +1

    If you think your car is at very good condition and worth more than average value on the market, eg: as new, no accident, Very low km. choose agreed value.

    • redgymhero on 15/02/2021 - 17:47
      +1

      Awesome!! Thank you. Very low km's, is in really really good shape for a 10 year old car. I'll swap over to agreed! Thank you!!

  • herecomestheoost on 15/02/2021 - 17:24
    +1

    I bought an import last week and went with Shannons for an agreed value. Just gives me peace of mind for a few extra dollars a month.

    • redgymhero on 15/02/2021 - 17:48
      +1

      Yea! Shannons was actually recommended to me by the seller. I couldn't find any indication on price though through their website - and since I'm not good at saying NO I didn't want to call up and have them lock me into a policy with them (and yes, I know I can cancel it any time haha).

      • herecomestheoost on 15/02/2021 - 18:39
        +1

        Haha yeah, they don't have the online quotes… They do it over the phone but I didn't feel pressured at all.. I've called them for a few quotes in the past (for cars I hadn't bought just inquiring about full comp prices)

        FYI though, my agreed value is 14k, excess $650, I get one free windscreen replacement per year, I have a good driving record (no fines or accidents in the past 10 years) but I don't have a proper insurance history and I'm $102 a month.. But keep in mind mines an import and a much greater risk of being stolen or sped around in.

        • redgymhero on 15/02/2021 - 18:43

          That's really great you didn't feel pressured! I mayyy have to call them up and get a quote :O

          I too would get an agreed value of 14k! My excess on my current quote is $900 though. I have a good driving record and insurance history. I reckon I might be able to get it for less than $102 per month with them, then :O Thanks so much for the tip!

          • herecomestheoost on 15/02/2021 - 18:50
            +1

            @redgymhero: I think you'd do a little better than me for sure. No worries and good luck.

            • redgymhero on 16/02/2021 - 09:31
              +1

              @herecomestheoost: Just got off the phone. They quoted me $2460 annual ($205 monthly), with $650 excess. The guy on the phone said it was that high probably due to my neighbourhood. Sad :((

              • herecomestheoost on 16/02/2021 - 15:15

                @redgymhero: Ouuuuuccchhh wtf! I forgot to put in my original comment to you that I'm (now) in a great neighbourhood and the car is stored in a lock up garage overnight… Flipping hell.

                I saw further down that you were having trouble getting an agreed value over 7k, my dad had the same issue, but he did find someone for insurance of 11k (nissan maxima), I'll speak to him shortly anyway but if I remember I'll ask who he went through.

                Also, I noticed people bagging out your choice of car…. Don't listen to them, you buy what you like.

                • brendanm on 16/02/2021 - 18:45

                  @herecomestheoost:

                  Also, I noticed people bagging out your choice of car….

                  He has chosen an extremely unreliable variant, with various well known issues.

  • jv on 15/02/2021 - 17:29

    Market Value, or Agreed Value?

    It depends on the cost of the insurance, the actuaries have built it into their premium…

    • redgymhero on 15/02/2021 - 17:48

      Sorry, not too sure what you mean by this :,)

      • jv on 15/02/2021 - 17:49

        they are different products, therefore different costs…

        the risk premium is built into the price.

        • redgymhero on 15/02/2021 - 17:50

          Ah, I understand. My question is not about price, though :) It's about which one would be better, in my situation!

          • jv on 15/02/2021 - 21:42

            @redgymhero: It depends how you value risk and insurance.

            Everyone is different.

  • bloom on 15/02/2021 - 17:37
    +7

    10yo VW polo $14k
    Brand new VW polo $20k

    I know what I’d pick…

    • redgymhero on 15/02/2021 - 17:45
      +2

      Me too, only having $14k available :)

      • bloom on 15/02/2021 - 17:48
        +3

        FYI my wife made me buy her a 10yo golf for 10k a few years back, cost me bomb with every service to fix stuff gone wrong. Finally the gear box went and got $3k trade in… safe to say I won’t buy another Euro out of warranty

        • redgymhero on 15/02/2021 - 17:49
          +1

          Ah, I'm really sorry to hear that :(( Yea, they're definitely not cheap to fix, that's true. Do you mind me asking which model she had?

          • bloom on 15/02/2021 - 17:54
            +2

            @redgymhero: 2006 VW Golf trend line, knew there were dodgy gearboxes but mechanic said it was fine upon purchase, within 18 months was worth cost to nothing.

            Now we got Kia/Hyundai’s with zero issues

            • redgymhero on 15/02/2021 - 17:55

              @bloom: Damnn :( that sucks. Yea, Kia's warranty and all that is crazy good, too!

    • whitelie on 15/02/2021 - 21:55
      +2

      Got to compare apples with apples. 10yo @ 14k, I'd expect it to be a GTI with 100k on the clock? New GTI is near on 40k, not 20.

  • AndyC1 on 15/02/2021 - 18:03

    Either you pay more for agreed value or if there is a writeoff for market value you can then bring up the quality / status of the car to the assessor before you agree to a payout figure. Either way you pay before or after as the insurance company's number one objective is to make money.

    The bigger issue is which insurance company is the cheapest and not a PITA to deal with!!!!

  • WreckTangle on 15/02/2021 - 18:06

    Do you actually get a choice?

    • redgymhero on 15/02/2021 - 18:20

      Yes they asked me which I preferred :)

      • Muzeeb on 15/02/2021 - 18:24
        -1

        I felt abused not accused. Now I have to clear my cache and history after clicking the risky click of the day.

  • pharkurnell on 15/02/2021 - 19:01
    +1

    I've heard of nasty stories on market value …. People having to prove their vehicle was in pristine condition, low klm, service history, you name it….

    Specially with how flakey the market is currently anything is possible.

    • redgymhero on 15/02/2021 - 19:02

      The more answers I get, the more I want to go for agreed value!! Thank you for your reply :)

      • pharkurnell on 15/02/2021 - 19:02
        +1

        I'd never consider market value… whose market theirs or yours?

        But everyones situation is different.

        YMMV

        • redgymhero on 15/02/2021 - 19:06

          I appreciate your answer! Calling them up right now, haha!

  • redgymhero on 15/02/2021 - 19:12
    +2

    Update: called them up and asked to change it to $14,000 Agreed Value. Was advised that according to their systems, the maximum amount they could insure it for was $7,000…Guessing I'll shop around for another provider??

    • Presence on 15/02/2021 - 19:46
      +2

      This is really just telling you that you are massively overpaying for this car. It's a ten year old European economy car - $14k is a lot!

      • redgymhero on 15/02/2021 - 19:47

        It's in really great shape. And has 80,000kms. All the other listings I've found for this specific model have MORE Kms, are in worse shape, and are all $18,000+ :)

        AAMI will cover up to $11,700.

  • Euphemistic on 15/02/2021 - 20:21
    +1

    Don’t forget that even agreed value will be depreciated for each next year. It won’t hold at $14k forever, it’s just a higher (normally) number to start depreciating from.

    • redgymhero on 15/02/2021 - 20:23

      Great tip!! Thanks a lot :)

  • brendanm on 15/02/2021 - 21:13

    Why are you paying $14k for a 10 year old polo? That's the real question. It's not a gti is it?

    • redgymhero on 15/02/2021 - 21:24

      Sure is.

      • brendanm on 15/02/2021 - 21:34

        Have you researched that choice? I'm a VW fan, and wouldn't buy a 2011 polo GTI.

        • redgymhero on 15/02/2021 - 21:36

          Why wouldn't you buy it?

          • brendanm on 15/02/2021 - 21:57
            +6

            @redgymhero: The engine is terrible, and the gearbox is terrible. Numerous problems with both. If you want a polo GTI, get a later one with the 1.8 and a manual.

      • PinzVidz on 16/02/2021 - 01:06

        Oh dear…

  • jtc13 on 15/02/2021 - 22:10
    +8

    Massive red flags if paying 14000 for that car and they will only offer 7k. If you can get out of the purchase I would. Better off finding a few extra thousand and getting a brand new Kia with a 7 year warranty for sure.

  • Stevek1960 on 16/02/2021 - 09:15
    +1

    Agreed value is the way to go for sure, also there are other options rather than insurance companies that insurance is their prime money maker.

    ING's prime business is banking but does great value insurance using the same underwriter as some major insurance companies but heaps cheaper.

    I wanted to insure a vehicle for agreed at 27k and they said they had it booked at 32k so went with that with glass, loan car etc etc costs me$54 a month

    • redgymhero on 16/02/2021 - 09:25

      Oh that's awesome!! I'll look at that thank you :)

  • MontyMacaw on 16/02/2021 - 09:53
    +2

    To those that have their car written off by their insurance company NEVER take their first offer. Your car was fine for you until the accident therefore it is worth more than market value to YOU because you did not plan on writing off the goodwill in the value of your vehicle until you decided on your own to buy another car. You would only accept market value if you chose to sell it.

    • redgymhero on 16/02/2021 - 09:55
      +1

      Awesome point! Going to write that down to remember it

      • MontyMacaw on 16/02/2021 - 10:05
        +1

        My daughter got an extra $1500 on her $10k car following this advice.

  • BigBirdy on 16/02/2021 - 10:40
    +2

    That your first insurance company would only go up to $7,000 agreed value is a guide as to what sort of market value they would pay out for a write-off, ie probably less than $7,000.
    When getting online quotes, my tip is to play around with the agreed value and excess values … with some companies the premium only changes when the agreed value goes over a threshold step, so keep upping the agreed value until the premium increases then drop it back under the last increase. And play with the excess to get the best ‘value’ combination of premium and excess (your personal circumstances and risk assessment will determine what’s best for you).
    Insurers will typically lower the agreed value each year, which is reasonable given the vehicle is depreciating. My insurer actually increased my agreed cover in last month’s renewal, probably due to Covid pushing car prices up

  • OzHunterNSW on 16/02/2021 - 16:53
    -5

    14k is not worth full comprehensive cover.
    You are much better insuring for third party fire and theft…. you still actually get covered if your vehicle is damaged by another vehicle, and or you cause an accident (albeit only a few k).

    The gamble is either you cause an accident, to the other party does. Third Party covers you.

    • Euphemistic on 16/02/2021 - 18:38
      +2

      14k might not be enough for you to come insure, but the less you can afford to replace a vehicle at short notice the more you need full comprehensive. Not many of us can afford to throw away $14k

      It’s jot just about causing an accident, to a large extent you can control that. Comprehensive makes life a whole lot simpler if you are hit by an uninsured driver - the main reason I have comprehensive.

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