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How Can Your Car’s Value Affect Car Insurance

2020/04/28

Before applying the cover, all insurers and comparison sites estimate the value of your car. This value is not necessarily similar to the value you get from the insurer in case of theft or written off. That’s because every car loses value the moment it leaves the showroom and the insurer is supposed to cover the market value of your car. It will estimate the worth using an industry-related valuation service. The estimated value covers the level of risks.

An expensive car has expensive repairs, replacement, and parts which can significantly affect the price of your premium. In simple terms, the value of a vehicle value determines the overall cost of premiums. You may likely to get guaranteed-value policies when you withdraw the cover; however, it is only applicable for some unusual vehicles. You can either directly visit the insurer or contact the third-party sites to find out the valuation. Below, we have mentioned the factors that can be responsible for your car’s affected insurance value.

Driving Record:

It is one of the most important factors considered by insurance companies. Your driving style tells a lot about you and also gives an insight into the history over a specified period of time. Companies will decide whether you are a good driver or a reckless driver. Younger drivers will likely pay more. The better you drive, the lower rates you will pay.

Credit-Based Score:

You may wonder how credit score affects the risks of involving in an accident. According to insurance companies, people with poor credit scores make poor judgments. The company translates that a high-risk individual makes more claims. It may look into the debt you have, your payment history, length of credit history, EMIs you are paying for a loan, credit card or something. So, if you have a good credit score, you are away from being a high-risk customer and if not, it's a red alert for you.

Location and Crime Rate:

It can hurt you that your location can determine the insurance. If you belong to a busy city with high crime rates, you are at higher risks of being theft and the same ideology is applied at the risks of accidents as well. This could have an impact on your insurance rates. However, not every company considers this element. Ask your insurer and get confirmed before purchasing the insurance.

Your Demographics:

Weird but true that gender roles have a significant role in the calculation of insurance rates. According to various statistics, men are likely to be involved in fatal accidents than women. Also, they are likely to get DUIs. Marital status plays a crucial role. Married couples pay less for a car insurance than those who are single.

This is how you get insurance cover based on your vehicle’s model and its worth. At Vehicular, we educate our customers with essential information that helps them to make an informed decision regarding their vehicle. Customers can consider our services to sell, purchase, or trade-in vehicles hassle-freely. Vehicular is the best destination to find used cars for sale in South Africa. For more information, feel free to contact us.




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