What is the purchase value of a car?
When you purchase car insurance you are insured in case of car damage. With a large and expensive purchase like a car, you obviously want to be well insured. The repair or replacement costs can be considerable. But does your car insurance pay out the purchase value, the new value or the current value of the car? This is important to know, because it can make a big difference in the amount you are paid. At Alpina\.nl, we explain the difference between these 3 terms and how to calculate the purchase value of your car.
What is the difference between purchase value, new value and daily value?
In the event of car damage, the insurer looks at the value of the car. We distinguish three types of value: the purchase value, the new value and the current value. We explain the difference between these three terms.
What is purchase value of a car?
The purchase value or acquisition cost of a car is what the car cost at the time of purchase. Simply put: if you buy a car for €15,000, the purchase value of the car is €15,000. In case of damage, an insurance company can ask you to prove the purchase value. You can do this with the purchase receipt or a bank statement.
What is a newvalue of a car?
The new value of a car is what it costs to buy it again now. Although the two terms seem to mean the same thing, the new value is not the same as the purchase value. The purchase value is what the car cost when purchased. The new value is what that car costs now. Suppose you bought your car 2 years ago. At the time, you paid €7,500 for it. Now, two years later, the same car costs only €5,000. So the purchase value is €7,500 and the new value is €5,000.
What is my daily value of the car?
The current value of a car is the amount that the car is worth at the time the value is determined. The current value is therefore the current value of your car. Immediately after buying a new car, you already give up on the value of the car. For example, the car is worth € 25,000. As soon as the car is registered in your name, the car is second hand. The value may then have dropped to €22,500. The current value of a car plays an important role in case of damage. Car damage is repaired, unless the repair costs are higher than the current value of the car. In that case, you will be paid the current market value of the car. The car is then a total loss. So you benefit from a high current market value.
Total loss of car: why don't I get the purchase price back?
Car damage is of course always annoying, but in the worst case your car is a total loss. A car is declared total loss when the damage is beyond repair or when the repair is more expensive than the current value of the car. It is good to know that in case of car damage, you will never get the purchase value back. This has to do with the indemnity principle. This means that an insured person may not benefit financially from a damage.
You can always insure a car with the new value insurance, for new cars, or the purchase value insurance, for used cars. With the purchase price insurance, you will not receive the new value, but the purchase price of the car if it is totaled within the maximum validity period.
How do I break the purchase value of a car?
In case of damage, an insurance company may ask you to prove the purchase value of your car. You can do this with the purchase receipt or a bank statement. You do not have to calculate the purchase value, like with the catalogue value. Do you want to make use of the purchase value regulation? Then you will also have to demonstrate the purchase value with a bill or bank statement.
Do you have any questions about the value of your car or car insurance? Please contact us! You can also take a look at the frequently asked questions about car insurance. Maybe your question is already there.
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