Nov 13 2019
How Should You Value Your Novated Lease?
Every car on the road needs insurance.
With so many coverage options out there for your novated lease, it’s incredibly important for you to read the fine print and fully understand the what you’re being covered for.
Factors to look out for include:
- the excess payable when you make a claim;
- no claim bonus;
- car hire; and
- after-accident care.
It’s also crucial to consider the valuation of your car as this is what determines the premium you pay for your insurance and the amount you are covered for in the case of a write-off.
You generally will have the choice between an agreed value or market value, but which one is right for you?
This is a fixed sum that has been discussed between the insurer and individual taking out the policy. As it is a key term within the policy, this discussion will take place when the contract is first signed. This type of car valuation is best suited for those who have the car financed through a Novated Lease or any other finance arrangement, the car has modifications, enhancements, or is unique in way.
The agreed value should reflect the higher value of the car.
This valuation doesn’t involve a negotiation or discussion, but instead is decided by the insurer based on the then market price for the same car in its current condition at the time of a claim.
The market value is generally more affordable than an agreed value policy.
This type of policy is NOT recommended when the car is financed.
Always consider the condition of your car when you take out insurance.
It’s important to ask yourself how long you plan on keeping your car, what your budget is for your insurance premium and if you believe the insurers valuation is fair and reasonable.