New research by GAP Insurance provider, ALA Insurance has revealed that the average car owner is offered £286 below market value on claims where their car has been written off.
Prompted by the news that Direct Line have been instructed to review unfair settlements from the past five years, ALA analysed over 3,748 claims to show which car makes, specifically receive the lowest payout based on estimated market value. Collectively some £1,071,108 below market value was paid out on all claims analysed.
Car values can vary of course and one Ford Fiesta 1.0 can be worth a great deal less than a similar model with the same mileage and service history. Things like spec, extras, paint colour and tyre condition can easily wipe £286 off the estimated value.
The data, which was provided by ALA’s underwriting partner AMS on claims from 2016 to present, showed that Land Rover owners are the most likely to get the lowest payout when claiming. In fact, Land Rover owners could have collectively lost out on £102,438.65 since 2016 as average payouts are around £505 less than market value.
Close behind Land Rover, Mercedes-Benz drivers can expect to receive a payout less than £456.71 of the car’s market value with BMW models also losing out as they are valued at £395.18 less by insurers.
In contrast, the data showed that Skoda owners were the only drivers to get a positive financial offer at around £22 over market value. Handy if you are short of the price of two meals plus drinks at Wetherspoons. Honda, Volkswagen and Renault models were also seen to be some of the best investments with initial offers at less than £100 less than their market value.
Speaking on the results of the findings, Founder and Managing Director of ALA Insurance, Simon England, comments:
“We felt it was pertinent to investigate the difference between insurance offers versus the market value of our vehicles following the FCA’s order calling major insurers to review their claims history. Our data shows the harsh financial reality of payments which are lower than fair market value for drivers who invest in some of the most reliable and highly sought after vehicles on the roads.”
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