Used car owners need to be wary of a potential insurance problem

At Auto Car Brokers we understand why so many people love used cars. We also know that it offers some fantastic opportunities for people to earn good money as a car broker. If you want to do this, we have the resources to help you. Plus, we can provide ongoing support and advice.

While there is a lot of love for used cars, especially in the UK, there is a big concern at the moment. New research suggests that some owners could be facing a big loss if their car is stolen or written off by an insurer. We want to take a closer look at the situation and what it could mean for you.

Why could it happen?

Car brokerThe big issue here is that the values of second hand cars have gone up massively in the last few years. The average price is near the record level of £18,066. Some models have seen their values increase by thousands of pounds between 2020 and 2022. As a result, they have exceeded the typical depreciation price.

While an increase in values would usually be a good thing, it can cause trouble if you need to claim on the insurance. What happens here is the insurer will value vehicles at the “normal” depreciation value. That is what they are worth today rather than when bought. As a result, it will ignore the recent rises in values. So, it could leave owners to find that their payout is thousands of pounds less than what they paid for the vehicle.

Brands with the highest risk

According to data from research by ALA Insurance and YouGov, there are a number of notable car brands with a high risk of this kind of loss.

At the top of the list is Mazda. The figures show that values of these vehicles grew by 20.1% or £3,295 from 2020 to 2022. If a vehicle was stolen or written off, the owner could lose out on this.

The second brand on the list is Mercedes-Benz. The rise in values here in the same period was £2,458 (8.9%). Again that would be a big loss if an insurer was to pay out only on the “normal” depreciation value.

Other brands in the top ten here are Skoda (£2,458 value increase), Toyota (£2,214), Ford (£2,003), Honda (£1,632), Porsche (£1,569), Nissan (£1,396), Alfa Romeo (£1,389), and Peugeot (£1,201).

The saddest thing here is a lot of these brands are popular everyday vehicles. It could mean millions of people that bought vehicles in the last few years are risking a big loss.

Want to try your hand as a car broker?

While the insurance issue and potential loss is a big negative for owners, it likely won’t stop many people from buying second hand cars. Demand could continue to be strong, especially if shortages of new vehicles continue. That means there will still be a lot of work for brokers in the UK.

If you have an interest and want to look at how to become a car broker, we have the details for you. We offer a business in a box package that has lots of fantastic resources. With it you can learn more about broking and get a great start in the industry. You can also contact us if you need any help.