What car value to put down for insurance?

psychopomp1

Hi,

Ordered a brand new Audi A4 Avant from my local Audi dealer last month, taking advantage of the £6k diesel scrappage scheme for my 13 year old diesel banger (also an A4). The list price is just over £39k but with the negotiated discount (£5k) and £6k scrappage discount, I will be paying £28k. The car won't be delivered until June.

Question is what value do I declare on my car insurance?

1) List price - £39k
2) Price I will pay - £28k
3) Price excluding diesel scrappage discount - £34k

I am thinking 3) as that is what it would cost to get the car replaced if I was to write it off almost immediately after driving off (god forbid ). I did ask my insurance company, Aviva, but I might as well have been talking to them in Swahili as they had no idea.

Cheers

DPinBucks

Put the £39k.  It makes no difference to the premium, but a lower price might put an upper limit to what the company would pay out.  I'm not sure where the missing £5k comes from.  Is it a discount, or the trade-in of your old car, or a combination?  You cannot be sure that you'd be able to get a replacement for £34k.

TBH, I've no idea why companies ask that question.  They know as well as anybody how much a car is worth.

There is also the possibility that, if the car is undervalued, the company would only pay a proportion of any repair costs.  I'm not sure if it ever applies to cars, but it does apply to house contents insurance, for example.
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psychopomp1

Thanks, I will see what happens to the premium if I declare the car at full list price. Like you say, hopefully it doesn't change.

Sorry I wasn't clear wrt pricing. I am getting a discount of £5k off list price and then another £6k for my old A4. So if I didn't have my old car to trade in, I would be paying £34k - its a cash purchase.

LV426

I would have thought that the value of a brand new car has to be RRP.  Things like cash discounts are not guaranteed - may depend on the dealer, incentives, etc.) so you have to assume (IMO) that you might have to pay RRP.

PSM1

I was always under the impression that an insurance company will pay the market value of your car at its current age/condition despite what you put the value at. Now I believe some policies will replace a car less than a year old (or something similar) with a brand new car but after that they will look at the current market place for an equivalent car and offer something around that. So you could put £39k but if they find similar cars for £30k then they will give you that. If you want to guarantee £39k then you need to take out GAP insurance.

Bubblin

You put the the price you paid, remember in the first year you normally get new for old after that the depreciated amount.

In your case this will be the car rrp minus the discount you negotiated (excluding scrapped scheme as the goes on your trade in) so 34k roughly.

But in reality the cost of vehicle will only affect payout after year 1.

Remember if you only paid 34k its not worth 39k.

un1eash

Play it safe, answer is 1.

Say you drive of the forecourt and write the car off after declaring the cars value as £28k. You ask for a new car from insurance and Audi say the discounts are no longer available so that'll be £39k. What do you think the insurance will say.

Bubblin

They’ll say, you paid 34k here’s your cheque for 34k

DPinBucks

Look, the OP has already implied that he can tinker with the value to see how it affects the premium.  He should put in the highest price between £34k and £39k which doesn't affect the premium.  Where's the downside to that?

IronGiant

He needs to put down the value that it would cost to replace the car as new, that is £39K, He wouldn't get the scrappage deal again, and it's not guaranteed the dealer contribution would still be there.   I'm sure the insurance company would check that before handing over the cheque and give him less if it's still in place.