This type of car insurance cover does what it says on the tin – insurers will offer a brand-new car of the same make, model and specification if yours is beyond repair or stolen.
Most comprehensive car insurance policies will offer new car replacement. We checked Defaqto, and out of 363 comprehensive policies, 94% offered new car replacement cover as standard.
It’s a common feature in third party fire and theft (TPFT) insurance too - 122 out of 193 policies offered it as standard.
Check your policy documents to see if it’s part of your existing cover, or compare policies to find insurance that includes it, if you need it.
There are some conditions to meet before your car qualifies for replacement cover.
Your car has to be damaged enough to need replacing rather than repairing.
Usually, the cost of fixing your car has to cost more than a certain percentage of the price for a new vehicle – often 60%, including taxes.
For example, if the list price of your car is £10,000, it would have to cost more than £6,000 to repair it for it to be eligible for new car replacement.
If your car is stolen, it must be declared a total loss to qualify.
The car needs to have been bought within a certain timeframe, usually 12 months - some policies have a set mileage limit too.
You must be the registered owner of the car or have permission from the lender if you’ve bought it with a loan.
If your car was pre-registered, the Financial Ombudsman Service treats the vehicle as if it was first registered when it was sold by the dealer.
19% of comprehensive car insurance policies have a mileage limit, while 87% of policies have a timeframe for new car replacement
Last checked 27 August 2019