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Northern Ireland Car Depreciation Insurance
You’ll have heard the slightly bleak fact that your car’s value goes down the moment you drive it out of the dealership. Unfortunately, this is true and it also applies to your car’s individual parts. Car depreciation cover is designed to cover the lost value of a car part that you need to replace in the event of an accident.
Here’s how it works. If you have an accident and need to make a claim on your car insurance, it’s likely you’ll need a part (unless the car is considered a total loss). Each part covered under your car insurance has its own depreciation rate. So when your insurance pays out, it will only cover the part you need at its current market value at the time of your claim.
This is where car depreciation cover comes in. Without this, you will only be covered for your part’s cost after its depreciation, so you will have to pay out any extra cost needed to replace or repair it yourself. But with car depreciation cover, the gap between your part’s current market value and what it will cost to repair or replace with a new one is completely covered by your insurer, not you.
A real life example would be:
- You have bought a new car.
- After one year you have an accident and need to claim for a replacement bumper under your car insurance.
- The cost of a new bumper is £200.
- Your bumper’s value has depreciated 30% in the past year, so your insurer will only cover £140.
- Without car depreciation cover – you will have to pay the remaining £60 for a new bumper.
- With car depreciation cover – the burden of covering the value depreciation of your bumper is transferred to your insurer, so they will cover the full £200 for a new bumper.
Cheap NI Car Depreciation Cover
This cover is usually bought as an add on to your main car insurance policy, so of course it will come at an extra expense. But like with other insurance, the best way to find cheap NI car depreciation cover is to compare prices across a range of policies.
Our experts say:
“When it comes to your insurance you should never accept your existing insurance company’s renewal quote until you shop around first. Car insurance doesn’t come cheap, so it’s even more important to get the best price. You could be surprised at how much you save by shopping around for a better deal.” – Ian Wilson, Managing Director of CompareNI.com.
At CompareNI.com we do not have any investments in insurance brokers and are not owned by any insurance companies. We only work for you, so you know you are getting unbiased comparisons of Northern Ireland car depreciation cover.
How much does car depreciation cover cost in Northern Ireland?
There is no clear cut answer to this, but generally speaking car depreciation insurance will cost you 10-20% more than comprehensive car insurance alone. This varies across different insurers and depends on your car and your circumstances.
If you are insuring a new car for the first time or renewing your car insurance policy you’ll want to find the car depreciation cover that works for you.
How can I get cheaper car depreciation cover NI?
Insurers consider a lot of factors when setting your car insurance premiums. If you’re not sure what these are, just think of the details you enter when comparing car insurance. Your occupation, annual mileage, driving history and no claims discount all contribute to what you pay.
But here are a few that are especially important if you are looking for cheaper car depreciation cover:
- Your car’s make and model – Depreciation rates vary across car makes and models. If your car parts have a low depreciation rate this could mean lower add on premiums.
- Your car’s age – Age plays a big role in depreciation. Car values depreciate most in the first three years after they are bought new, then level out. If your car is over three years old there will probably be less value depreciation gaps for insurers to cover and this could get you lower premiums.
- Your location – If you live in an area with higher car crime and road accident rates, insurers see you as more likely to claim so premiums can be higher.
- Your age – Drivers of certain ages are statistically more likely to have accidents. So if you are above 25 you have a better chance of getting cheaper cover.
- Your driving experience – Experienced drivers are considered less likely to be in accidents, so again insurers could reward this with lower premiums.
- Where you park your car – Cars parked on public roads at night could be at higher risk from passing traffic or vandalism, so insurers could charge lower premiums if you park on a private drive or garage.
- Your voluntary excess – Increasing your voluntary excesses can get you cheaper insurance, but it needs to be a cost you are willing and able to pay in the event of a claim.
- Any modifications covered under your insurance – If any modifications are covered under your main insurance policy, you could have higher premiums. This is because specialised or modified parts are typically more expensive to replace and could devalue at a higher rate.
Is NI car depreciation cover worth it?
Buying a new car is a huge investment, so it is natural to not want any additional expenses to crop up when it is still new. But the truth is that if you buy a new car, UK averages suggest that its value can drop up to 60% in the first three years, and this will be reflected in your parts. So if you want top protection for your new car, car depreciation insurance could be worth it for you.
Car depreciation cover could be particularly worth it for you if:
- You own a luxury or specialist vehicle – these often depreciate at higher rates so there will be a higher value gap that falls to you if you need new parts.
- You bought your vehicle new: Vehicle value depreciates most in the first three years after it is bought new, so it could be cost effective to cover your part’s value during this time.
- You are more accident prone – This is subjective, but to insurers this could be things like being a new driver or parking your vehicle on the street.
- You live in an area with high accident rates – If you live in built up, busy areas with more hazards you could be more likely to have an accident that you need cover for.
- You want peace of mind – After forking out for a new car you might simply want to know you won’t have to spend on it again for a few years.
- You want to keep your car in pristine condition – This cover makes sure you can afford to repair your car with new parts that you might otherwise be priced out of if you had to cover the cost yourself.
What is included in car depreciation cover?
Northern Irish car depreciation cover will cover the value depreciation of car parts that are insured under your main car insurance. This means that if a part needs to be replaced following an accident, the insurer is responsible for paying you the current market value of the part and the additional cost needed to replace it with a brand new one.
There is usually a limited number of times you can claim on your car depreciation add on during the insurance term. This varies from insurer to insurer but some will allow two claims within the policy term, meaning you can claim on it twice a year.
It might seem like this insurance is redundant if you are covered under GAP insurance. But GAP cover is only designed to cover your car in the event that it is written off by your main car insurance. So this is still going to give you added coverage for your car in less severe accidents.
What is not included in car depreciation cover?
This is subject to the specifics of your policy but common exclusions under car depreciation cover are:
- Any car over a certain age (roughly five years old depending on the policy).
- The car’s battery and tyres.
- Accidents or incidents that are covered under a different insurance policy.
- Total loss depreciation cover.
- Accidents that are not covered under your car insurance. For example when the person driving doesnt have a licence, is not insured on the car, or is driving under the influence.
- Regular wear and tear of your car.
- Mechanical or engine breakdown.
Can I get NI car depreciation cover for a used car?
This type of insurance is usually associated with new cars as their parts suffer the highest value depreciation gaps. Although some insurers will still offer a car depreciation cover add on for used cars, some have age or mileage limits that exclude some cars. For example, some insurers will not offer this cover for cars over five years old.
Cost wise this type of cover could be less worth it if you own an older used car. You will need to balance the cost of the car depreciation add on premium and the potential value depreciation of your car’s parts as well as your likelihood of making a claim.