# How to properly use the New Car Replacement Value?



## Tetsujin (Mar 17, 2016)

The dealership 's financial agent explained me very clear that if a cat scratches my new car they will replace it (since I paid an extra to them for the coverage). When I talked to a maintenance supervisor during the oil change, he was very mysterious when I asked for this and he explained that according to the accident they are gonna inspect the car, measure the current value and try to replace it..... but I have many doubts about it. I paid around $1500 for the coverage and a plan to check up the rust and replace any rusty part for free.

However, I want to know if someone has already profited from the New Car Replacement Value coverage? How was your experience? What do you need to keep in mind.

People usually hit cars everywhere mainly in parking lots. Someone hit my car and cracked my grille. The dealer quote me the new part for $350 when in the states is $99 .... but that's another thread!!!! So if people continue hitting your car and ruining the bumpers even more. Can I used the new car replacement value without any cash to pay for?

Thanks in advance.


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## Market Lost (Jul 27, 2016)

Tetsujin said:


> The dealership 's financial agent explained me very clear that if a cat scratches my new car they will replace it (since I paid an extra to them for the coverage). When I talked to a maintenance supervisor during the oil change, he was very mysterious when I asked for this and he explained that according to the accident they are gonna inspect the car, measure the current value and try to replace it..... but I have many doubts about it. I paid around $1500 for the coverage and a plan to check up the rust and replace any rusty part for free.
> 
> However, I want to know if someone has already profited from the New Car Replacement Value coverage? How was your experience? What do you need to keep in mind.
> 
> ...


I'm a bit confused - is this an extended warranty you bought from the dealership? Normally, you pay for insurance from an insurance agent, so I don't know how the dealership is involved if this is insurance. If it is a warranty, then from what I've read, I wish you good luck as they seem to be one big scam.


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## carverman (Nov 8, 2010)

Tetsujin said:


> The dealership 's financial agent explained me very clear that if a cat scratches my new car they will replace it (since I paid an extra to them for the coverage).


Cat scratching the paint or even a kid scratching it? ..I doubt very much they would replace the car for you. That kind of damage can be repaired quite easily.
To replace the car, it would have to be assessed at least 50% of the current value vs the value when new when it has been damaged, making it more suitable for replacement than to be repaired,. Besides, a car that has sustained 50% damage in a car accident is practically worthless on resale or a trade in. 
Nobody would touch it, so it makes sense to replace it.



> When I talked to a maintenance supervisor during the oil change, he was very mysterious when I asked for this and he *explained that according to the accident they are gonna inspect the car, measure the current value and try to replace it.*.... but I have many doubts about it. I paid around $1500 for the coverage and a plan to check up the rust and replace any rusty part for free.


Rust coverage may be a different matter entirely, covered by the undercoating application insurance policy. With that, they have the option of repairing the rusted section first..unless the rusted section affects the safety or integrity of the car body then more than likely they would replace it. 



> People usually hit cars everywhere mainly in parking lots. Someone hit my car and cracked my grille. The dealer quote me the new part for $350 when in the states is $99 .... but that's another thread!!!! So if people continue hitting your car and ruining the bumpers even more. Can I used the new car replacement value without any cash to pay for?


 I doubt it . If it's just a dented bumper or a broken grill..those do not constitute a serious deterioration of the worth of the car or serious safety issues with the vehicle affecting drive ability. They can be replaced fairly easily in any body shop after you pay your deductible for the comprehensive part of your policy, usually $50 to $100 deductible and the rest of the replacement is covered. 

You must have got a policy brochure with this "replacement vehicle coverage" insurance you paid for, you should
read it thoroughly to find out what is covered and under what circumstances. 

However,it appears that this "new car replacement scheme" does exist at least in BC... read below...

http://www.icbc.com/autoplan/Pages/New-Vehicle-Replacement-Plus-coverage.aspx


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## Tetsujin (Mar 17, 2016)

Market Lost said:


> I'm a bit confused - is this an extended warranty you bought from the dealership? Normally, you pay for insurance from an insurance agent, so I don't know how the dealership is involved if this is insurance. If it is a warranty, then from what I've read, I wish you good luck as they seem to be one big scam.


I am talking about this. 

http://www.icbc.com/autoplan/Pages/New-Vehicle-Replacement-Plus-coverage.aspx 
https://www.caaquebec.com/en/on-the...nsurance-vs-the-replacement-cost-endorsement/
http://www.mytdiservice.com/en/replacement_cost/faq
etc.

But this is assumed to be part of the car insurance issued by any insurance company like Belair Direct, Intact, LaCapitale, Kanetix, etc. But the dealership of Honda is offering this too. So the financial agent explained to me that this will reduce the quote from any external car insurance company.

I'm looking for a practical experience and advice. Hope not to find someone else to tell me that this is really a scam. I will go immediately to Consumer Protection Bureau!


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## Market Lost (Jul 27, 2016)

Tetsujin said:


> I am talking about this.
> 
> http://www.icbc.com/autoplan/Pages/New-Vehicle-Replacement-Plus-coverage.aspx
> https://www.caaquebec.com/en/on-the...nsurance-vs-the-replacement-cost-endorsement/
> ...


Thanks for the link, I was just confused because I live in Ontario, and I've never seen a dealership offer insurance, and when I was in BC I was able to avoid moving my insurance to ICBC. This is a new product, although it's been in the US for a few years. I don't know if there are many people who have actually made a claim, but I'm not sure how it would cover a cat scratch. It's suppose to allow you to replace your car at the actual replacement value, and not just the ridiculous amount they give you when your car is written off.


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## twa2w (Mar 5, 2016)

This kind of policy has been around for close to 30 years but in the past it was offered by insurance companies and some banks but often only was good for the first 1 or 2 years you owned the car. Essentially if your car was writren off in an accident, this rider would cover the difference between the writeoff value and what you paid got the car. The cost back then was pretty nominal.
Looks like a big profit center for dealers along with paint guard, rust proofing and other rip offs in the business office.
I think you had a salesman that oversold the policy.
This will only cover you, if I read the links correctly, if your car is a total writeoff. If a simple fender bender, your insurance will fix the car.


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## Market Lost (Jul 27, 2016)

twa2w said:


> This kind of policy has been around for close to 30 years but in the past it was offered by insurance companies and some banks but often only was good for the first 1 or 2 years you owned the car. Essentially if your car was writren off in an accident, this rider would cover the difference between the writeoff value and what you paid got the car. The cost back then was pretty nominal.
> Looks like a big profit center for dealers along with paint guard, rust proofing and other rip offs in the business office.
> I think you had a salesman that oversold the policy.
> This will only cover you, if I read the links correctly, if your car is a total writeoff. If a simple fender bender, your insurance will fix the car.


Interesting, I've been driving for 30 years, and I used to ask for it, and was told they didn't offer it . Then again, maybe it was because I used to drive only used vehicles.


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## carverman (Nov 8, 2010)

Market Lost said:


> Interesting, I've been driving for 30 years, and I used to ask for it, and was told they didn't offer it . Then again, maybe it was because I used to drive only used vehicles.


It is available from some dealers, but certainly not cheap...read more on the CAA link below.

*Option 1: Replacement insurance*
*Replacement insurance is mainly available from auto dealerships as well as used-vehicle dealers.* Insurance brokers and agents can also sell it.
How much does it cost? A fixed amount, calculated based on the value of the vehicle and the term of the coverage.
Replacement insurance for a sedan sold for $22,000 may be $699 for four years, $899 for five years, and $1,069 for a six-year policy. 

https://www.caaquebec.com/en/on-the...nsurance-vs-the-replacement-cost-endorsement/


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## twa2w (Mar 5, 2016)

It was RBC that offered it years ago for a small fee as part of their buy back car loan IIRC. It was good for the first 1 year or maybe 2 of ownership. It was slso available sutomatically through cooperators insurance if you bought a new car and had a certain type of policy but again only for a the first year of ownership.
Pretty low risk as few cars are written off in first year of ownership.
Sounds like dealerships are selling it now as a cash grab.


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## Tetsujin (Mar 17, 2016)

Very interesting opinions. Thanks! Well the financial agent at the dealership overreacted telling me that they will replace my car if a cat scratches it. I mean it was just a way to tell me that they don't care to replace it if something bad occurs unexpectedly like an accident, vandalism, etc. Partially or total replacement.

This coverage was valued in $500 but they sold me all the package together for $1500 = VIN lock, anti-rust protection, new car replacement value and 6-month non-payment loan if I lose my job. I starting to see this NEW REPLACEMENT VALUE pointless as also the anti-rust protection. However I am not very sure about this because a coworker told me that he paid $60 for an anti-rust externally (He does not work anymore with us). But I don't know if the Auto Service Company can replace original parts as the dealer offered to do that for 8 years (Well the inspection starts in 3 years for 5 years).

It is very interesting to share your knowledge here. Very appreciated. Also I can see that this coverage is something that nobody uses effectively. But it is sure to have an insurance in case of something unexpected occurs.

I hope to find out how effective is this coverage when someone relates us his/her experience.

I live in Quebec and I was planning to go to New Brunswick soon. I was wondering what will happen if I have an accident in the highway because a car or animal mainly? The dealer will analyze many things before to value my car? I couldn't find the tiny letters at the bottom of the contract.


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