Should you choose market value or agreed value for car insurance in Australia, generally agreed value better for certainty and newer cars under 5 years, market value cheaper 10% to 20% less premium for older cars over 5 years, with agreed value $20K fixed payout versus market value $18K based on RedBook at time of loss. For car insurance comprehensive $800 to $1,500 per year, agreed value means insurer pays agreed amount $20K fixed if total loss, regardless of depreciation, giving certainty and covering loan $18K, costing $900 per year for $20K car versus market value $800 per year saving $100, but payout $20K versus market $16K to $18K. For newer car under 5 years bought $30K, market value $25K after 1 year, agreed value $30K better as you get $5K more to replace and cover loan, worth extra $100 premium. For older car over 7 years $10K, market value $8K, agreed value $10K, difference $2K, premium difference $50, market value okay as car depreciates slowly and cheaper premium. So choose agreed value for newer cars under 5 years, financed cars, and if you want certainty $20K payout to cover loan and replacement, costing 10% more premium $100 extra per year, but worth $2K to $5K extra payout. Choose market value for older cars over 5 to 7 years, low value $10K, if you want cheaper premium $50 to $100 saving and accept lower payout $8K versus $10K, as depreciation lower.
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