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Wales Online

National

Levi Winchester & Stephen Pitts

Ten cars that could cost you up to £3,000 if written off or stolen

Insurance Mazda Ford Skoda Toyota Mercedes

Drivers of cars including Mazda, Skoda, Toyota, Mercedes or Ford have been warned that they could lose the most money if their car is written off or stolen, according to new research. The Mirror reports that ALA Insurance estimates some motorists may lose as much as £3,295 if they need to make a total loss claim on their car insurance.

It is all to do with how much used car prices have risen by since lockdown - and if prices start to fall this year. If used car prices fall significantly, it could mean those who bought their vehicle at an inflated price could face being significantly out of pocket in the event of an insurance claim.

This is because you would only receive what your insurer thinks the car is worth today - not what you originally paid for it. The price of used cars rocketed largely due to Covid restrictions and fewer new vehicles in the showrooms, thanks to a semiconductor shortage.

The current average price of a used car remains near a record level of £18,066, according to Auto Trader’s Retail Price Index data - but some experts say there are potentially signs of a slowdown in the market. The December figure was up 3.4% year-on-year, compared with 4.7% in November, 8.1% in October and 11.2% in September.

On top of this, CarDealer Magazine reports that used car sales have dropped for the second quarter in a row, down 12.2% to total 1.78 million. New data from ALA Insurance shows Mazda had the biggest rise in used car values, with average prices increasing by £3,295 between 2020 and 2022.

This means if prices return to “normal” depreciation values, Mazda owners could be left over £3,000 out of pocket. Mercedes-Benz was second on the list, with values increasing by 8.9%, up by £2,458.

Skoda, Toyota and Ford saw similarly high reverse depreciation figures, with used car prices increasing on average by £2,261, £2,214 and £2,003 respectively.

Of course, no one knows what will happen to the used car market this year. However, research conducted by ALA Insurance and YouGov last year revealed the average motorist is already as much as £6,000 out of pocket when their vehicle is written off or stolen.

Simon England, founder and managing director of ALA Insurance, said: “If you purchased a used vehicle for more than what its typical depreciative price should have been, and that vehicle is written off or stolen today or sometime in the future, then you would only receive what your comprehensive insurer thinks it’s worth at the time of the claim. Not what you originally purchased it for.

“We had a look at our policy data throughout this period and the numbers showed the top five vehicle brands with the most reverse depreciation between 2020 and 2022 were popular everyday brands; Mazda, Mercedes Benz, Skoda, Toyota and Ford.”

He added: “There is a way to protect the price you originally paid for your vehicle. ALA GAP Insurance is something you can purchase in addition to your comprehensive insurance. It means if your vehicle was written off or stolen, we would pay the difference between the comprehensive insurer’s settlement and what you originally paid for the vehicle - which for many used vehicle owners, may be more than the vehicle is worth today."

Cars that could lose you the most money

Analysis of used car prices between 2020 and 2022 show the top ten manufacturers with the highest “reverse depreciation” and indicates how much motorists could be set to lose.