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 market value. Collectively £1,071,108 below market value on all claims analysed.
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.
Car Makes With Lowest Offer Versus Market Value
In contrast, the data showed that Skoda owners were the only drivers to get a positive financial offer at around £22 over market value.
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.
Car Makes With Highest Offer Versus Market Value
Shockingly only 9% of motorists take out GAP Insurance with and with 33.2 million cars on the road, experts at ALA predict that UK car owners without GAP could lose up to £8.6 billion combined as a result.
Speaking on the results of the findings, Founder and Managing Director of ALA Insurance, Simon England, comments said, “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.
“The stark contrast in the comprehensive insurance company offer versus market value also highlights the importance of GAP Insurance.
“From our research we know that where customers had an ALA GAP policy in place, claims achieved an average of 101% of the market value. So, while it might not be your first priority when purchasing a new,used, financed or owned outright car or van, it’s certainly worth looking into to protect your investments in the event your car is written off.”