Knowing what your car is valued at is important because it is one of the ways in which car insurance companies calculate your auto insurance quote. If you are wondering how these companies measure the value of your car you aren’t alone. The truth is that there are many different factors that weigh in when insurance companies determine a car’s value, though they usually refer to the following methods:
• Market Research
• The Point Value System
• The Kelley Bluebook
The most commonly used method that insurance companies employ is hiring an appraiser. Appraisers are experts at assessing a car’s damage, and how damage relates to a car’s overall value. After an accident, if a claim is filed, an appraiser will examine a car and calculate the cost of the damages that have occurred. Insurance companies will often want to know your car’s value before covering you. If you then get into an accident, they will already know how much your vehicle is worth. Some companies will use outside appraisers that they trust, or will utilize appraisers hired within their own company. Whatever the case, you are always free to hire your own appraiser if you want, in order to get a second opinion.
Companies also do extensive market research when it comes to determining a car’s value. Often these insurance companies will rely on statistics from similar cars that are in your location in order to get an accurate number. They may also look at how much your car is sold for, and note any problems that are commonly reported for your vehicle.
The point value system is another method car insurance companies may use to determine a car’s value system. With this method, insurance companies make a list of different important features of a car, and assign each particular part of the car a different rating. Parts like tires, transmission and engine are all assigned a point value, and when the points are added together they make up the sum total of the car’s value. Put simply, the more points your car has, the greater its worth.
Perhaps the easiest and most frequently used method of determining a car’s worth is by consulting the popular handbook, the Kelley Bluebook. This well known method is popular because it is free and usually quite accurate.
You can expect either expensive or cheap car insurance quotes based on your car’s value, and if you are involved in an accident, it is important to know the value of your car in order to calculate your loss in damages.