Who Sets The Redbook Value?

wallet72 on 01/11/2021 - 15:13
Last edited 01/11/2021 - 15:27 by 1 other user

TL;DR: version: why does the Redbook value of a car not change when the sale price of similar cars has increased?

So I'll chalk this up to experience, but I've just been stung by the 'we only pay market value using the Redbook' response from my insurance company.
I asked them to show me a single for sale ad for a car like mine that was anywhere near that value and their response was 'that's not how this works'.

I know this, I know it's a typical story. What bugs me is they are using the value of the car to justify classing it as a write off. Which as the NRMA smash repair guy said was typical for older cars because they make a bucket of money reselling it whole or for parts. Okay it is what it is.

But it got me thinking. Who sets the Redbook value? When does it get set? My car has gone down in value according to them for the last two renewals, and yes I did ask for a better cover but they always said the maximum is market value. I was a bit dumb here, I thought if the advertised prices went up so did the value according to redbook.

So the last question I had was 'has anyone successfully challenged the valuation from an insurance company?

The reason I'm thinking of pursuing this is the Redbook value is $3K, I have some quotes I got myself that are around $1500, and my excess is $500 - so the car is being written off so they won't have to pay me $1k to fix it, but will pay $2.5k to write it off. I'm pretty sure it will be sold for a major profit, I mean the damage is to the nudge bar and one rear side panel.

Automotive Redbook

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Comments

  • oscargamer on 01/11/2021 - 15:26
    +1

    If you are not happy with the figure, you have 2 choices….

    1. argue the figure (either yourself or employ an adjuster to do it for you)
    2. stop the claim, fix the car yourself and sell it (or keep it)
  • nephilim on 01/11/2021 - 15:29

    Heard people often just challenge the insurance agency with a few qoutes of same car as insurance is meant to cover rebuying the same car in same condition.

  • Drakesy on 01/11/2021 - 15:41
    +3

    So the ownership structure is that Carsales owns Redbook.
    Carsales is owned by a mixture of funds and no single major shareholder, so it doesn't seem there'd be any outside influence.

    I'd say it's experts that track car values based on historical trends and fancy algorithms.
    Having said that we are going through a once in a generation period which may never be repeated and Redbook's algorithms haven't been set up to track this.

    You have every right to ask the insurer for the current market value as determined by the market - this includes covid tax.
    There's a couple of posts on here going into this, just collect a few sample cars of similar year/km's and let the prices do the talking.

  • Euphemistic on 01/11/2021 - 15:59

    Part of the problem with the valuation may be that when you renewed your policy the value may have been stated and by renewing you’ve agreed to that low value.

    However, as above you don’t need to continue with a claim if you are going to be worse off. $1500 in repairs on a $3k car doesn’t sound terrible. Ultimately, it’s up to you.

    Can also try to negotiate with them, but repairs to an instance ‘as new’ standard for a low value car will often write it off despite being able to get a much cheaper non-insurance quite to fix.

  • pegaxs on 01/11/2021 - 16:30
    +1

    You know all those times you bullshit about how much you paid for you car when it comes time to change ownership and pay stamp duty? Well, welcome to the consequences of our actions…

    And Redbook is really unreliable at the moment because of COVID tax on all cars and the fact that private sellers usually have their heads jammed up their own arses with their "comes with a glovebox full of cocaine" prices.

  • pharkurnell on 01/11/2021 - 16:59

    So the last question I had was 'has anyone successfully challenged the valuation from an insurance company?

    I've read that people have - Do I believe they have… not 100% convinced..

  • brendanm on 01/11/2021 - 17:26

    I'm pretty sure it will be sold for a major profit, I mean the damage is to the nudge bar and one rear side panel.

    They aren't selling a $3k car, classed as a repairable write off, at a "major product". They want to write it off because the cost of repairs, plus risk of further repairs, is higher than the value of the car.

    Also, what is this mystery vehicle?

  • Tleyx on 02/11/2021 - 08:49
    +1

    Redbook is based on what people said they paid when they register the car. Because people lie as you pay stamp duty on this figure it is inaccurate

    • [Deactivated] on 10/11/2021 - 20:45

      Not quite. It's based on that post sale survey when you mark your car as sold in carsales, it asks the price which you have no reason to lie about. Unless one believes it will be matched against gov filled doc to check any discrepancy.

      • Tleyx on 12/11/2021 - 12:02

        Carsales is inflated compared to other sales sites

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