Retail, Market Or Trade Value? The Differences When It Comes To Car Insurance & Which One Is Best
If you’re a little unsure as to what the difference is between these, then this article will help you to get a good understanding of these terms (hint - it’s easier than you think).
Vehicle insurance isn’t something that should be complicated. But the thing is, there are so many insurers out there who seem to make it more complicated than it is.
We get that life is complicated, which is why we make sure our insurance isn’t.
And in the spirit of telling the honest and simple truth about insurance, we have written this pretty awesome blog post on how to tell the difference between these 3 different terms when it comes to car insurance…
What is the retail value of my car?
The retail value is basically the price that your car retails for when you buy it from a dealer. This amount will also include the markup that the dealer will earn on the sale.
This means that the retail price is the FULL price you would pay for a car on a showroom floor.
The retail price is the closest you can get to the replacement value of your car. This is the closest amount you would need to replace your car if it was stolen or written off.
Simply put, retail value insurance is the best payout for your car.
What is the trade/book value of my car?
This value is what a car dealership would pay you for your car.
So, if you wanted to sell your car to a dealer, then this book value or trade value is the amount the dealer would give you. The dealer will then take your car and add a mark up before selling it onto a buyer. Meaning, the dealer then adds more to the price he paid you to sell the car at retail price.
This means that the trade value is less than the retail value. If you insure your cat at its trade value, then your premium will be lower but you will have less cover.
What is the market value of my vehicle?
Market value is often the most difficult to understand.
Basically, market value of the average of the retail and trade values.
Market value is also based on various factors such as the age of your vehicle, the mileage, the condition and the supply and demand of your car in the marketplace.
When you sell a car privately, the price would be based on market value. This is because a private sale is based on different variables and it can be tricky to calculate the exact value of your vehicle.
So, what's the best choice?
We hope that after reading this information, you have a good understanding of the terms and know which one you want to go for.
As experts in the field of insurance, we find that insuring your car for its retail value is the best solution.
In the event of a total loss, meaning your car is stolen or written off, and depending on your chosen amount of cover and excess etc., the retail value will provide you with the best payout. As we said, this is the closest amount you would need to replace your car if it was stolen or written off.
Of course, the decision is yours to make.
Do some digging and conduct a car insurance comparison and find an insurer and a plan that suits your needs and your budget.
What does Oneplan insure my car for?
If you haven’t already heard, at Oneplan we let you decide how much cover you want and at the price you can afford.
How we do this is using a sliding scale. Basically, you select the percentage of insurance you can afford, selecting cover from 30% to 95% and we work out what your monthly premium will be based on this percentage. It’s flexi car insurance.
For example - If you have chosen 50% cover for your car, then we cover you for 50% of the retail value of your car in the event of a write-off. Or we cover 50% of damages in the event of an accident resulting in repairs.
The best part is that our cover is ALWAYS fully comprehensive car insurance no matter what percentage you choose and we let you turn your cover on and off when you like!
The amount your car is insured for is based on the retail value of your car and the percentage cover you have decided on.
We believe that retail really is the best form of car insurance you can get, which is why we only insure your car for its retail value.
Yours in uncomplicated car insurance,