Agreed Value vs Market Value: What’s the Difference?

Tysers Insurance Brokers |

When it comes to insuring a high-value vehicle, whether it’s a Ferrari 812 Superfast, a vintage Aston Martin DB5, or a track-ready Porsche GT3 RS, standard insurance policies often fall short. One of the most important decisions you’ll make when arranging cover is choosing between agreed value and market value. But what do these terms actually mean, and which is right for your prized car?

Let’s break it down.

 

What is market value?

Market value refers to the amount your car would be worth on the open market at the time of a claim. It’s based on factors like:

  • Age and mileage
  • Condition
  • Comparable sales
  • Market demand

While this is standard for most everyday vehicles, it can be problematic for high-value or rare cars. Why? Because market value can fluctuate and it may not reflect the true worth of your vehicle, especially if it’s a limited edition, custom-built, or appreciating classic.

Example:
If your 1990 Ferrari F40 is stolen, a market value policy might only pay out based on recent auction results or dealer listings, potentially undervaluing a car that’s been meticulously maintained or has unique provenance.

 

What is agreed value?

Agreed value means you and your insurer agree on the car’s value at the start of the policy. If the car is written off or stolen, that’s the amount you’ll receive, no depreciation, no market fluctuations.

This is particularly beneficial for:

  • Classic cars with appreciating value
  • Supercars with limited production runs
  • Modified or custom vehicles where standard valuations don’t apply

Example:
You and your insurer agree your McLaren P1 is worth £1.2 million. If it’s written off, that’s what you’ll be paid, regardless of what the market says at the time.

 

Why it matters for prestige car owners?

For collectors and enthusiasts, your car isn’t just a mode of transport, it’s an investment, a passion, and often irreplaceable. Choosing the right valuation method ensures:

  • Fair compensation in the event of a loss
  • Peace of mind knowing your asset is properly protected
  • Avoidance of disputes over payout amounts

 

Which option is right for you?

Feature

Market Value

Agreed Value

Based on current market trends

✅

❌

Fixed payout agreed in advance

❌

✅

Ideal for standard vehicles

✅

❌

Ideal for rare, classic, or appreciating cars

❌

✅

Risk of undervaluation

✅

❌

 

If your car is rare, collectible, or has a value that’s hard to pin down, agreed value is usually the smarter choice.

 

Final Thoughts

When insuring a high-value vehicle, don’t settle for a one-size-fits-all policy. Work with a specialist broker who understands the nuances of prestige and performance cars. At Tysers, we tailor cover to suit your car’s true value, whether that’s market-based or agreed upfront.

 

Need help deciding which is right for your car? Get in touch with our expert team today for a bespoke insurance quote.

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