Car written off in NSW: how market value works

What market value means

Market value is generally what it would have cost to buy a car of the same make, model, variant, age, kilometres and condition just before the loss. It isn't what you paid, and it isn't the amount you might have got trading it in.

The Australian Financial Complaints Authority (AFCA) describes market value as "The average value of vehicles of a similar make and model, taking into account the age and condition of the vehicle". Your policy may define it too.

Many insurers start with a valuation from an industry provider. That's a starting point. Your insurer may also look at cars currently for sale.

Agreed value policies work differently: they pay the amount set out in the policy. Check your certificate of insurance to see which type you have.

Why listings in New South Wales matter

Car prices differ between states and territories. Comparing your car with listings for sale in New South Wales is the closest comparison.

The comparable cars should be the same year, make, model and variant as yours. The variant (or badge) is the most common reason valuations are disputed, so check it against your rego papers or the build plate.

The three prices are averaged, and the average is adjusted for the difference between the comparables' average kilometres and your car's kilometres.

If you weren't insured

If another driver caused the accident, you can usually claim from their insurer. When that insurer assesses your car as a total loss, its offer is generally based on the car's market value just before the accident, so the same evidence helps: comparable cars for sale, your kilometres and your accessories.

Ask the insurer how it worked out the figure, and keep copies of everything you send. If you're not sure where you stand, a free community legal centre can help.

Accessories

Accessories that add value, like a bull bar, tow bar or canopy, are added at what they're worth today. Keep the invoices. If one is lost, a listing for the same item for sale now can be used instead.

Features that come standard on your variant are already in the comparable cars' prices.

The excess and unexpired registration

Some settlement offers already have your excess taken off, and some add a refund of unexpired registration. When you compare the offer with the market, compare like with like.

Service NSW can tell you how registration works for a written-off car in New South Wales, including any refund.

Written-off vehicles and the register

Cars assessed as a total loss are generally recorded on a written-off vehicle register as either a statutory write-off or a repairable write-off. Service NSW can explain what that means for re-registering a vehicle in New South Wales.

This also matters when you look at listings: a car with write-off history isn't a fair comparison with your car before the loss, unless your car had the same history.

If you disagree with the offer

You can ask your insurer how it worked out the offer and send them evidence, such as comparable listings and invoices. Insurers have an internal complaints process and must tell you how to use it. They generally have 30 calendar days to respond to a complaint.

The Australian Financial Complaints Authority (AFCA) is a free, independent service if a complaint isn't resolved. AFCA decides each complaint on its own facts.

DisputeX gives general information and a calculation based on the listings and invoices you provide. It isn't legal advice or an opinion on your claim. For advice about your situation, speak to a lawyer or a free community legal centre.