The relationship between the price of insurance and the value of your car
The price of your car insurance is directly related to the value of that vehicle.
In fact, the value of your car is one of the factors that most affect the price of insurance, along with the coverage, the insured amounts and the deductibles that you select for your insurance quote. car.
Many people do not know how the price of a car is calculated and the amounts they would receive for their vehicle from the insurer in the event of an accident.
That is why we want to explain how the value of your vehicle is calculated and how the annual devaluation of the value of your vehicle affects the price of your insurance.
The data come from an analysis carried out by the group of experts in the purchase of pre-owned cars Carmatch.mx , who value hundreds of cars daily and from their database reached the following conclusions:
- A brand new car is worth 24% less approximately only when arriving from the agency to the buyer's house.
- Cars are devalued an average of 24. 4 percent each year.
- The value of a car changes according to the good or bad treatment that has been given in its use, lowering an approximate of 2 percent to its value.
The reasons behind this vary greatly in nature and will be explained below.
Loss of value of a new car
New cars are not worth what you initially paid for them in an agency, but various amounts are deducted, including taxes, devaluations and the profit margin of the agency where you bought it.
Among the most important taxes is VAT, known to all, with a value of 16 percent, and Car Tax New (ISAN) that varies depending on the price of your car but goes from 2 to 15 percent.
For the latter, the more expensive the car, the higher the percentage that you will have to pay corresponding to this tax.
To this is added that a car that no longer has zero kilometers is devalued just because it has gone back to pre-owned.
To give an example, according to the special report by Carmatch.mx on the depreciation of cars in Mexico , a vehicle that is worth 200 thousand pesos, when leaving the agency it would be worth 146 thousand 349 pesos because he lost 16 percent corresponding to VAT, two percent due to ISAN, five percent for leaving zero kilometers behind , and finally, a 10 extra for the agency's profit margin.
Devaluation of cars
Cars, like any other good that has technology and components that wear out with use, lose value over time.
According to direct data from Mexican automotive market, the average percentage is 24. 4 percent, with higher or lower values depending on each brand and model.
For example, the Lincoln Navigator ranked the most undervalued in the top of the 20 cars that lose more value, according to Carmatch.mx, at a loss of 27. 7 percent of its value passing back into 2017 to used in 2018.
With this we can get an idea of how much our own car loses in value.
Change in the value of a car according to the deal
A car can lose, between aesthetic details and mechanical failures, around 16 thousand 500 weights in minor fixes generated by lack of service .
Although this value does not directly affect how your car is valued in terms of insurance, it is important that you keep this figure in mind so that you can calculate the real value of your car.
What is the relationship between the price of my car and my insurance?
As mentioned at the beginning, there is a close relationship between the real value of your car and the amounts that a company will pay for it when the need exists.
The commercial value is the amount on which the deductible and amounts to be calculated are calculated.
The commercial value of a car can be, as we saw previously, a 27 percent lower than the price at which we initially acquired it, and not for that , is profit of the insurer in question.
Simply, insurance agencies, car sales agencies, and other companies related to the automotive industry, are aware of these factors that detract from the value of a car.
Therefore, it is important to know them as well, to have a better idea of how much is the amount for which you are covered in the event of an accident.