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A guide to new car replacement cover

Get a brand new car if yours is damaged in an accident

Two new cars next to one another and there is two people talking by the side of them

There's nothing quite like driving off in your brand new car for the first time. But before you get behind the wheel, check your insurance provides new car replacement cover.

Over 2.6 million new cars were registered in the UK last year. That's a lot of shiny motors and happy drivers.

Sadly, 10% of accidents between March 2015 and February 2016 involved new cars. And a third of those happened within two months of leaving the showroom.

Maybe it's not so surprising when you think that it can take time to get familiar with all the technology in a new car. Plus when we upgrade, we often buy a larger or more powerful model that can be trickier to manoeuvre.

So if you have an accident not long after collecting your new car, what cover can you expect from your car insurance?

What is new car replacement cover?

If you're involved in an accident and your new car is considered to be a total loss (a write-off) and you have new car replacement cover, your insurer will replace your vehicle with one of the same make and model.

New car replacement cover is often a feature of comprehensive car insurance, but not usually an option with third party fire and theft policies.

How does new car replacement cover work?

It's a bit like new-for-old cover on your home insurance, where if your TV is stolen or damaged, your insurance company will replace it with a new version of the same TV.

With new car replacement cover the insurance company will provide a replacement car of the same make, model and specification if the cost of repairing the damage following an accident is more than 50%-60% of the value of the car.

This percentage can vary from one insurance company to another. With LV= we offer a replacement car if the cost of repairs is more than 50% of the value of your new car.

It also applies if you have your car stolen and it isn't recovered.

In both cases, the car must be less than 12 months old and you or your partner must be the first and only registered keeper.

How do you value my new car when deciding whether to replace it?

At LV= we use the manufacturer's list price (including taxes and accessories) at the date the accident or theft happened.

If a replacement car is not available in the UK, we'll pay you the price you paid for the car or the manufacturer's list price (including taxes), whichever is lower.

This is important to note, as the depreciation on new cars can be huge in the first year of ownership.

Whatcar? estimate that most cars lose between 50% and 60% of their value in the first three years. So by using the manufacturer's list price to value the car rather than the resale price, LV= provide a fairer cover amount if a replacement car cannot be found.

What happens if I have an accident after 12 months?

New car replacement cover typically only lasts for 12 months from the date you buy a new car, or the date the car is registered.

After that time, you can still make a claim on your insurance if you have an accident or your car is stolen, but your car will no longer be considered 'new'.

This means that if your car is a considered to be a total loss, the car's value will be estimated at its current market value, which could be considerably less than you paid for it.

Buying LV= car insurance is quick and easy