Market Value vs. Agreed Value: What Every Vehicle Owner Should Know..

When it comes to insuring your vehicle, understanding the difference between market value and agreed value is crucial. These terms may seem similar, but they play a significant role in determining how much you’ll be compensated in the event of a claim. Let’s break it down and explore which option might be best for you.

What is Market Value?

Market value is the amount your vehicle is worth at the time of a claim. This figure is determined by its age, condition, mileage, and current market trends. Insurance companies calculate this value based on what similar vehicles are selling for in the open market.

Pros of Market Value:

• Generally cheaper premiums.

• Adjusts automatically to reflect the current worth of your vehicle.

Cons of Market Value:

• Depreciation can significantly reduce the payout over time.

• May not cover modifications or accessories.

What is Agreed Value?

Agreed value is a fixed amount that you and your insurer agree on when the policy is taken out. This value doesn’t change during the policy period, even if the vehicle depreciates.

Pros of Agreed Value:

• Offers certainty—your payout will match the agreed figure.

• Better suited for classic cars, heavily modified vehicles, or rare models.

Cons of Agreed Value:

• Higher premiums compared to market value policies.

• Requires accurate valuations and documentation upfront.

Which Option is Right for You?

Choosing between market value and agreed value depends on your vehicle and your priorities:

• Market Value: Ideal for everyday cars where depreciation isn’t a concern.

• Agreed Value: Perfect for vehicles with sentimental, collectible, or unique value where market rates might fall short.

How True Valuations Can Help

At True Valuations, we specialise in providing accurate and certified vehicle appraisals to support agreed value policies. If you’re unsure of your car’s worth or need to update your valuation, our experts can inspect your vehicle and deliver a detailed report, ensuring your policy reflects its true value.

Protect your investment and avoid surprises during a claim. Whether you choose market or agreed value, make sure you have the right support to get the payout you deserve.

Need a valuation? Contact us today!