Best Cost Car Insurance

When adding a new car to an auto insurance policy, you need to state the purchase price, how is this used?

If I got a good deal on a car and it is actually valued at much higher, should I write the market value or the actual price I paid. The difference is considerable, since I bought it from a friend. Thank you.

Public Comments

1. I've never seen a carrier ask that... they usually just use the VIN to determine the value. But just using the VIN can be inaccuate as it does not account for any options on the vehicle. Perhaps this is why they are asking. In any case, I can only see this information used to determine what to charge for comprehensive and collision coverage (damage to your vehicle). So giving that low, low number should work to your advantage. They _won't_ use this amount if they ever have to pay out on your vehicle is it's a total loss... the policy states they pay the "Actual Cash Value". Again, they _will not_ use what you paid as one vehicle does not make up a market value. To go back to why they want the info... I still am not sure why they would want this info. I mentioned above to better understand its value but what someone paid for a vehicle is not a good indicator (which goes back to why every carrier I know of just uses the VIN). People pay way to much for some vehicles (bad credit adjusts the price, etc) and other people way too little (bought from an uncle for $1, etc). You may want to ask your agent how they use this info and/or why they ask.
2. I work for an Insurance Agency in Oregon and we never ask about the purchase price of the vehicle. All we ask is the year, make, model, odometer reading, vin number and the purchase date and of course if you have a loan on the vehicle. That is all we ask. If your insurance is asking that I would ask them why they need to know. But that is just what I would do. Hope this helps.
3. give them the price it is valued at. i usually have to know this for older autos to determine the symbol of the car. some companies do ask for the value of the car new, although it does not ususally affect the premium.