New for old car insurance

Congratulations, you’re the proud owner of a new car.
But while you spend your days breathing in that new car smell and buffing the bonnet, it’s worth taking some time to protect it just as carefully.

New for old car insurance could replace your lost or damaged vehicle with a brand-new car, so you wouldn’t have to worry if something happens to your shiny new motor.

Congratulations, you’re the proud owner of a new car.
But while you spend your days breathing in that new car smell and buffing the bonnet, it’s worth taking some time to protect it just as carefully.

New for old car insurance could replace your lost or damaged vehicle with a brand-new car, so you wouldn’t have to worry if something happens to your shiny new motor.

Kate Hughes
Insurance expert
4
minute read
Do you know someone who could benefit from this article?
Last Updated 5 SEPTEMBER 2022

What is new for old car insurance?

New for old car insurance is cover that could offer you a like-for-like replacement, if your new car has been written off or stolen. New for old car policies usually apply to cars less than a year old, where the cost of repair is more than the car’s retail value.

With new for old car cover, your insurance provider will replace it with a vehicle of the same age, mileage, make and model as the original car you bought. Or, if a matching car is unavailable, they may offer you the equivalent ‘replacement cost’ to buy an alternative yourself.

Some insurance providers offer new for old car insurance as standard. Check your policy to see if it’s included in your cover. Otherwise, you may be able to buy it as an add-on.

How does new for old car insurance work?

Your car will need to meet certain criteria to qualify for a replacement through your insurance. These may include:

  • Age – your car will usually need to be less than a year old to qualify for a like-for-like replacement.
  • Damage – there’s usually a minimum cost of repairs that your car will need to exceed, to warrant a replacement.
  • Mileage – some insurance providers may set a mileage limit on new for old policies.
  • You’re the registered owner – you must be able to provide proof of ownership.

There may be other exclusions depending on your insurance provider. Check your policy paperwork for a full list of terms and conditions.

What happens if I don’t have new for old cover and my car is written off?

If you don’t have a new for old policy for your car, your insurance provider should offer you the current market value of your car.

The problem with this is depreciation – the value your car loses after you’ve bought it. For example, say you bought a new car for £12,000. Over the first year its value depreciates through general use and wear and tear. By the time the damage occurs, the car is only worth £7,000. This is what your insurance provider will pay out. So if you want to buy a car of the exact value as a replacement, you’ll have to find the other £5,000 yourself.

Is new for old car insurance worth it?

If you’re worried about your new car being written off or stolen in the first year, new for old car insurance could be worth it for the peace of mind.

Some cars depreciate faster than others. If you’ve bought one of these models and it’s stolen, or damaged to the point where it will cost more to fix than to replace, new for old car insurance could be your motoring lifeline.

Top tip:

Working out if new for old car insurance is worth it is tricky, especially as most of us would struggle to work out the chances of our vehicles being stolen or written off in any given year. 

While accurate numbers on the chances of your car being written off are tough to come by, DVLA figures show 74,769 vehicles were stolen in 2020 – the equivalent of 205 a day. But that’s out of a total of over 40 million cars and vans on the road. 

What is agreed value car insurance?

If yours is a particularly special car, it could be worth looking at agreed value car insurance. This type of cover is an alternative to a new for old policy if your car is a complete write-off. It tends to be for cars that have a higher value than other models of a similar age. You and the insurance provider agree the cost of buying a replacement car when you first buy the insurance policy.

Payment is based on the price agreed for your car if it’s written off or stolen.

What is guaranteed asset protection?

Another option is guaranteed asset protection, aka gap insurance, is another way of financially safeguarding yourself when you buy a new car. Rather than offering you a replacement car, it can cover any difference between what your car insurance policy pays out and the original purchase price of your car, if it’s written off. You could then pay off any outstanding car loan.

Currently, we don’t offer a comparison for gap insurance products.

Looking for a quote?

Compare quotes with us today and see if you can start saving. 

Get a quote
Compare car insurance Get a quote