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Your complete guide to car valuation

Your complete guide to car valuation

When you want to insure, sell or trade-in your car, you will want to know how much it’s worth. A car valuation helps you estimate the value of your vehicle. You could start by getting an approximate estimate from a free online tool, but this is an automated calculation without an in-person inspection. For a more accurate valuation, you’ll need to go to a qualified independent valuer or dealership. That way, you can get a car valuation certificate based on specific details about the model and condition of your vehicle. 

A car valuation is helpful when taking out a comprehensive car insurance policy. If you put your car on the market, the valuation helps you set the price you expect for it, and shows buyers that this price is accurate. If you’re looking to buy a second-hand car, then you should try to get a valuation before you finalise the deal. And if you want to trade-in your current vehicle for a new one, then a car valuation certificate helps you compare offers from different dealers.

What are the factors affecting your car’s valuation?


Make and model

The model of your vehicle and the company that manufactures it affects its valuation. Some car brands are perceived to be more reliable, so their cars tend to be valued higher than other makes. Popular models are also more highly valued as there is more demand for them in the resale market.



A car’s value reduces as it gets older. Older cars are likely to fetch lower prices on the second-hand market than newer ones as buyers have to plan for maintenance costs and insurance premiums.  



The total number of kilometers that your car has covered affects the price that buyers are prepared to pay for it. A car with lower mileage is valued higher as it’s likely to have less wear and tear than another with higher mileage.



You are likely to get a higher valuation if you have maintained your car well over the years. The condition of mechanical parts, body, paint, and interiors will affect its price. Excessive rust may bring down the valuation of the vehicle. If you have been ensuring the car is serviced regularly and have the service history document, you may get a better valuation, as this gives buyers the confidence that recommended maintenance has been completed. 

How to value a car for insurance

Most car insurance policies are based on market value. If your car is in an accident or totalled,  the insurance company will need to pay you the price your car could get if it was sold while in good condition. So your insurer will conduct a car valuation, taking into account the depreciation on the original cost of the car. Such a car valuation may not consider the condition of your car before the accident and be based only on its make, model, and age. The insurance company may give a valuation that’s lower than the amount the trade-in value of your car would have been. 

The other type of car insurance you could choose is called agreed value car insurance. In this case, you can specify the amount you want to receive but may need to pay a higher premium. 

Question you may have

Can I get a refund on car insurance?

Have you decided to cancel your car insurance policy? Maybe you’ve sold your car, or you found a better rate elsewhere.  Perhaps you’re just not driving it anymore. So what happens to the unused amount of your car insurance? Can you get a refund on unused car insurance in such a scenario?

It often depends on who cancelled the policy: you or your insurance provider. If you initiated the process of cancellation, then you may be able to get most, if not all, of your unused amount. There might be some cancellation fees involved.

However, if the policy has been cancelled by your provider, because you defaulted on a payment, then you will not receive any refunds. Keep in mind, sale of your vehicle, or traffic violations such as receiving too many speeding tickets, or being charged with reckless driving, are not reasons to withhold refunds.

If you pay your insurance monthly, your future payments will simply stop. However, many insurance policies are paid upfront for the year, as some companies offer discounts. If this is the case, get in touch with your insurer about getting a refund for the unused amount.

Can you claim insurance for car dents?

Car insurance has been designed to protect you from some of the costs of repairing damage to your car. However, is it worth claiming car insurance for a dent?

The main factor to take into account is the excess that you will need to pay at the time of making the insurance claim for the car door dent, and comparing it with the repair cost of the dent.

For instance, if someone collided into your car with a shopping cart and the cost of repairing the dent is lesser than your excess, you would be better off not making the claim. However, if your car’s panels are dented by intense hail, in all likelihood the cost of getting the dents taken care of will be much higher than your excess. Here making a car dent insurance claim would make sense.

Please note that if you’re making a car dent insurance claim for damages that have accumulated over a long time, you will be required to pay an excess for each separate incident that dented your car.


Does car insurance cover driving while intoxicated?

Will car insurance pay if drunk driving causes an accident? Driving under the influence of drugs or alcohol is illegal, however, some insurers may cover the liabilities.

Your driving history and experience are important factors that affect the car insurance premium. If you have had violations for drinking under the influence, insurers may perceive you as high-risk. They will then be more likely to charge you a higher car insurance premium.

But does car insurance cover drunk driving accident liabilities? Many factors are involved in answering this, here’s what you should know.

Amount of cover

Although driving while intoxicated is illegal, if you’re involved in an accident, your insurance may cover damages within the limits of the policy. While expenses should be covered under your car insurance for drunk driving accidents, you may face other penalties, like cancellation or non-renewal of your policy.


Additionally, the premium on car insurance for drunk drivers may increase by as much as 79% if you’re convicted. Some insurers, however, won’t cover damages if you’re driving whilst intoxicated and you don’t comply with the conditions laid out in the Product Disclosure Statement (PDS).

Check "does car insurance cover you if you are drunk" in the terms and conditions of your policy if you have a history of such violations.

How to choose car insurance?

With so many types of car insurance out there, it can be a challenge to choose the right one for you. Factors to consider when choosing car insurance include the cost, the inclusions, and the benefits of each, which may vary from provider to provider. When choosing a car insurance company, spend some time comparing what is, and what isn’t, covered by the policies.

Compulsory third party (CTP) insurance is part of your car registration cost. However, CTP does not protect you against damage to your car if it’s written off after an accident or if it gets stolen. Moreover, you might have to pay for damages to someone else's property in case of an accident.

Other covers you may wish to consider are third party property insurance, third party property, fire and theft insurance, and comprehensive insurance. While you might want to get additional insurance, not everyone requires the highest cover, and it depends entirely on several factors, such as the make and age of the car or the area where you live.

You can compare car insurance providers to get a policy that suits your needs.

Are stolen car keys covered by insurance?

Having your car key stolen is not just frustrating, but it can also turn out to be quite a costly affair. Modern electronic keys can be much more expensive to replace than traditional ones, and losing one can make a sizeable dent in your pocket. But does insurance cover stolen car keys?

A few comprehensive car insurance and third party fire and theft policies do cover lost car keys as a standard, while others offer it to their customers as an extra. However, there are some that don’t entertain stolen car keys insurance claims, so you must check with your insurance policy provider and read the Product Disclosure Statement carefully before purchasing the policy.

It is important to note that you will need to prove to your car insurance provider that the keys have actually been stolen and not merely misplaced, as most policies will refuse to provide cover in the case of lost keys. Car insurance policies that cover stolen keys typically cover the cost of replacing the keys, recoding your car locks and locksmith charges.



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This article was reviewed by Personal Finance Editor Georgia Brown before it was published as part of RateCity's Fact Check process.



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