If you’ve ever had to insure a car, you’ve probably been asked if you’d like to cover it for its retail, market or trade-in value.
The difference between these insured values might not seem like a big deal when you’re taking out car insurance, but it could make a huge difference to your payout if your car is stolen or written off.
Read on to find out what these values mean so you can make an informed decision when taking out car insurance.
If you were to buy your car from a dealership, you’d pay the retail value. If you claim for theft or a write-off, you’d likely be able to replace it with the same make and model if your car was insured for its retail value.
This is usually lower than the retail value. It considers a number of factors, like the mileage, service history, accident history, and the general condition of the car. If you tried to sell your car privately, you’d probably get a price that’s close to its market value.
This is how much a dealership would pay you if you traded your car in. Dealerships need to make money on vehicle sales, so this amount will be lower than the retail value. If you get confused, think of it like this: A dealership will buy your car at the trade-in value and sell it at the retail value.
The Best Insured Value for Your Car
So which is best for your car? That depends on your needs. When deciding, factor in how much you still owe on the car, if you’d like to get the same make and model if yours is stolen or written off, and the cost of the monthly car insurance premiums; the higher the insured value, the higher your car insurance premiums will be.
Prices quoted are correct at the time of publishing this article. The information in this article is provided for informational purposes only and should not be construed as financial, legal, or medical advice.