Buying a new car is exciting, and insurance might not be the first thing on your mind. But the right coverage helps protect your investment from the unexpected. Considering your options early ensures you drive off with both confidence and peace of mind.
In our latest article, our experts propose some key points to consider when it comes to insuring your vehicle, and how our policy can help.
Key considerations when insuring a new car
1. Agree the value of your car
Many specialist cars tend not to depreciate in the same way as higher volume models. Some may even appreciate, particularly if they are produced in very low numbers, or celebrate a car’s anniversary.
If you are keeping your car for the long term, we can arrange for it to be insured on an agreed value basis. Instead of relying on market value, agreed value locks in the value of your car from day one. That means you can be certain of how much you’ll receive in the event of the claim. Depending on the age and value of your vehicle, you may be entitled to additional covers.
You won’t need to provide a valuation if your car is worth less than £300,000. If it is worth more, then we’ll simply need is a copy of the purchase invoice within 30 days of cover starting.
Fine out more about agreed value here (opens a new window).
2. Protect against depreciation
Using car finance to buy your new car? If so, your lender will charge you interest on the cost of the purchase. This means that if your car depreciates, its value will be less than the amount you’ve borrowed plus interest, even as the amount you owe reduces over time.
In the event of a claim, most motor insurance policies pay up to the car’s market value. Therefore, if your car is later written off, or stolen and not recovered, the sum you receive from your insurer may not be sufficient to clear the outstanding finance.
To cover this ‘gap’, you may choose to take out a Guaranteed Asset Protection (GAP) insurance policy. GAP insurance is designed to ensure you receive the difference between the total loss settlement and any unpaid amount owed on a lease or financial agreement relating to your car.
Our policy includes GAP cover as standard. Find out more here (opens a new window).
3. Think ahead when it comes to replacements
If your new car is stolen and not recovered, or written off following a collision, you may find yourself in need of a replacement. Many insurers offer to replace your car with another similar specification model, provided it’s within 12 months since the date it was first registered. But if an incident occurs after that date, your vehicle won’t be covered.
Our policy goes a step further and extends this period to 2 years following its first registration.
4. Install a tracking system
Tracking systems are an essential tool designed to prevent theft and aid the recovery of your vehicle. But many insurers also require Thatcham-Approved tracking systems to be installed to provide theft cover.
Insurers may agree to a period of grace to complete the installation. However, it is usually more convenient to ensure that your supplying dealer is aware and can have the necessary system installed before your car is delivered.
Most importantly, any tracking system mandated by your insurer must have its subscription activated and maintained. This is not always done automatically. Ask your dealer for guidance around activation.
Read more about keeping your car safe (opens a new window).
If you'd like to know more, reach out to a member of our team.
Visit our Performance (opens a new window)page for further insights.
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