How insurers work out a car's market value

Valuation guides and tools

Insurers commonly use valuation guides and tools that estimate a car's value from its year, make, model, variant and kilometres. Some also look at cars currently advertised for sale.

Adjusting for kilometres and condition

A car with fewer kilometres than average is usually worth more, and one with more is usually worth less. Condition before the loss can also be taken into account.

Why two valuations can differ

The same car can be valued quite differently. Common reasons include:

• A different variant or badge was valued
• The kilometres used weren't the odometer reading at the date of loss
• Comparable cars came from another state, where prices differ
• Accessories weren't included
• Old listings were used instead of cars for sale now

What AFCA has said about valuation guides

In AFCA case study 853601: AFCA's adjudicator disagreed with an insurer's pre-accident market value. The valuation guide the insurer relied on "did not fairly reflect the insured vehicle's pre-accident market value. It was $10,900 lower than the Redbook average retail figure and significantly lower than other car sales listings."

AFCA says each complaint is unique and its published approach is a guide only.

How DisputeX works it out

DisputeX uses cars for sale in your state that match your car's year, make, model and variant, averages their prices, adjusts for the difference in kilometres, and adds your accessories at today's value. Every step is shown on the How we calculate page.

Do insurers use advertised prices?

Many use valuation guides and tools, and some also look at cars advertised for sale. Your insurer's valuation shows what they used.

Why is my insurer's figure different from cars I can see for sale?

Common reasons are a different variant, different kilometres, comparable cars from another state, missing accessories or older listings. Checking each detail is a good first step.